We’ve all heard the advice- purchasing comprehensive car insurance in India can be better.
It has 3 insurance components-
- Third-party cover
- Own-damage cover
- Personal accident cover
While it does come with much better coverage and hence the term- comprehensive, it can also be costlier, which might discourage some from opting for this.
Moreover, the price of third-party and personal accident cover is regulated by the IRDAI (Insurance Regulatory Development Authority of India), but the own-damage premium can vary depending on a lot of factors.
But this also means that there is scope to reduce the premiums if you play your cards right.
The following options can help you reduce your own damage insurance premium while getting broader coverage.
- Choose the Right Insured Declared Value (IDV)
The maximum value you can get from a car insurance company in case of a total loss of your car is called the insured declared value or IDV. Higher the IDV, the higher the premium.
While you may think that keeping the IDV high might fetch you more coverage, that’s not the case. As per IRDAI, the IDV of the car is calculated as the ex-showroom price of the vehicle minus depreciation.
Here is the mandatory depreciation to be charged on the car.
| Age of the Car | Mandatory Depreciation |
| Less than 6 Months | 0 |
| 6 months – 1 Year | 5% |
| 1-2 Years | 10% |
| 2-3 Years | 15% |
| 3-4 Years | 25% |
| 4-5 Years | 35% |
| 5-10 Years | 40% |
| More than 10 years | 50% |
- Build Up No Claim Bonus (NCB)
NCB is the discount policyholders get on the own-damage premium if they don’t file a claim in the previous year. The good part about NCB is it keeps on building up and can go up to 50% of the premium amount after 5 claim-free years. On the flip side, claiming your insurance policy in any of these years can bring down the NCB to 0.
Needless to say, try to build up your NCB to reduce the insurance premium in the long run. You can even transfer your NCB from one insurance provider to another during the policy renewal.
- Opt for Voluntary Deductibles
A voluntary deductible is the portion of the claim amount you agree to pay from your pocket while settling any claim. In return, you can get a discount on the own-damage premium amount. Therefore, you can raise your voluntary deductibles to reduce your premium amount if you are confident in your safe-driving skills or don’t drive very much.
- Install ARAI Approved Anti-theft Device
Installing anti-theft devices in your car reduces car-theft chances, lowering the probability of filing theft-related claims. This leads to discounts on car insurance premiums. However, you can claim such discounts only if the anti-theft device is authorised by the Automotive Research Association of India (ARAI). Also, you need to notify your insurance provider after installing such a device to claim the discount.
- Membership Discount
Many insurance providers offer additional discounts to individuals who are active members of a recognised Automobile Association of India. So, if you are an active member of any such association, then you can use your membership to get an additional discount on your comprehensive insurance premium.
Getting comprehensive car insurance in India at a lower premium is possible, provided that people are aware of the discounts mentioned above. So, why settle for just third-party coverage when you can enjoy wider coverage at a reasonable rate?