Auto Insurance: 8 smart tips to save money while renewing car insurance

Auto Insurance: 8 smart tips to save money while renewing car insurance
24 Jan 2019

The government has time and again enforced the need of having a valid insurance policy. On the implementation of these tips, you can save a good amount on your overall renewal premium.

Your good driving skills resulting in a claim-free year makes you eligible for a No Claim Bonus from the insurer.

We Indians love to save and do not mind going the extra mile even if it means saving just a few bucks. But somehow, when it comes to auto insurance, we believe that we already have the best and continue with what we have. Here are a few useful tips to save money while renewing your own damage or comprehensive auto insurance policy:

  1. Compare and Renew Online: Have you bought anything without comparing other options available in the market? Obviously not! Then why not do the same while renewing your comprehensive auto insurance policy? With the internet becoming a part of our day to day life, we can get information about almost anything instantly.

Today all insurers have an online presence. Thanks to technology, we can now compare various plans offered by top insurers. You can then select the plan that best suits your vehicle’s requirements completely. Weigh the premium against the benefits offered and renew instantly online.


Online renewal offers cheaper premium rates against the renewals done through agents. The insurers save a considerable amount on online renewals in the form of commissions payable to the agents and administrative expenses. This saving gets passed on to you in the form of lower premiums. Thus, a few minutes of your valuable time spent on an online broker’s portal can help you save on your renewal costs.

  1. Check the IDV: The Insured Declared Value (IDV) is the maximum amount that is paid by the insurer to you in case of a Total Loss or Theft of the Vehicle. In other words, it is the sum assured of the vehicle insured. It is arrived at by taking into consideration the market value of the vehicle and applying the depreciation factor to it. The IDV offered to you will vary from one insurer to another.

It is also important to remember that a higher IDV means higher premiums and vice versa. This makes it extremely vital that you select the correct IDV. The correct IDV will help you avoid paying higher renewal premiums and at the same time, protect you from financial loss in case of theft of the vehicle or a complete total loss.

  1. Use No-Claim Bonus: Your good driving skills resulting in a claim-free year makes you eligible for a No Claim Bonus from the insurer. This no-claim bonus accumulates year-on-year, until it reaches the ceiling limit of 50%. You can utilize this accumulated no-claim bonus to reduce the premium by up to 50% of the payable amount. The best way to accumulate the no claim bonus is to avoid making small claims. Pay for small expenses like scratches, dents and bumps from your own pocket. This accumulated no-claim bonus will provide a far higher benefit than what you would have spent on small repairs.

You should also remember that this discount is offered to you and not your vehicle. So, in case you decide to change your vehicle, you can get the previous accumulated no claim bonus transferred to your new vehicle. Even when you decide to change your insurer, you should get your accumulated no claim bonus transferred from the old insurer to the new insurer.

  1. Opt for Voluntary Deductibles: Every insurer provides you with an option of pitching in towards the claim payable and sharing a part of it from your own pocket. In other words, if you agree to pay a particular percentage of every claim, then in return, the insurer will reduce the premium payable by you. By agreeing to deductibles from the slabs like Rs 2,500, Rs 5,000, Rs 7,500 and Rs 15,000, you can get a discount on premium ranging from 20% to 35% or even more. This arrangement is beneficial to people who live in an area which has a less vehicular population, leading to comparatively fewer accidents. People who have a vehicle which is older than five years or who use their vehicle sparingly must definitely go for this arrangement and earn discounts on the premiums payable.
  2. Review and Assess Add-on Covers: Before renewing your comprehensive insurance plan, take a look at the additional covers that you have attached with your base comprehensive plan. There could have been a reason due to which you could have attached add-ons like NCB Protector, Engine Protector, Accessories Cover, Return to Invoice, Consumables Cover, Road Side Assistance, Zero Depreciation, Key replacement and so on. But now, you might not need many or a few of these add-ons. Review your requirements thoroughly and only keep those additional covers which provide value for money or enhance your coverage level. Drop the add-ons which are not useful to you anymore. Removing unnecessary add-ons also helps you in bringing down the renewal premium, thereby resulting in savings.
  3. Install Anti-theft Devices: Installation of anti-theft devices increases the security level of your vehicle. Insurers see this as a positive sign from your end towards the safety of your vehicle and reward you for it by providing a discount on the premium payable. Installation of anti-theft devices certified by the Automotive Research Association of India (ARAI) brings down the vehicle renewal premium by 2.5% or a maximum of Rs 500.
  4. Take up Membership of Automobile Association: Being a member of a recognised and accredited association like Automobile Association of Upper India, Western India Automobile Association, Automobile Association of Eastern India, Automobile Association of Southern India also makes you eligible for a discount on your renewal premium. On providing membership details to the insurer, you can get a 5% discount or a maximum of Rs 200 discount on your comprehensive motor insurance premium.
  5. Timely Renewal: Finishing the renewal task beforehand also plays an active part in bringing down your renewal premium. Your comprehensive auto insurance policy can be renewed 45 days before the actual expiry date. When you renew the policy before time, you are locking the premium rates for yourself for the entire year before any price rise can influence them. Also, the renewed policies coverage will begin only after the expiration of the existing policy. This way, there is no gap in your insurance coverage and all benefits remain intact.

The government has time and again enforced the need of having a valid insurance policy. On implementation of the above tips, you can save a good amount on your overall renewal premium. A win-win situation of staying insured and saving at the same time, along with the convenience of renewing it online from the comforts of your home, is surely the preferred choice of the millennials.

(Disclaimer: These are the author’s views. Readers are advised to consult their financial advisor before buying any plan)