Did you know that your car can be a major reason why your insurance premium amount may have increased over the years? Right from its increasing age to reckless claim applications from the insured owner, there are a few critical reasons why your insurance premium may be rising steadily over the years.
The good news is that small steps can be taken to eliminate these reasons and thus save money on your car insurance. Let’s take a look at these reasons for an increase in high insurance cost and how you can tackle them to avoid heavy premium:
Repeatedly asking for a claim whether it’s a minor or a major claim, is big NO. It immediately raises a red flag over your driving behavior. The insurer sees you as a threat to their business interest, so if the accident or damage to the car is a very minor, it’s preferable to pay from your pocket and not ask for a claim. There is a term called “loading” which insurer may add to your premium, in case whenever you have applied for multiple claims.
Age of the vehicle
If your car is 4 to 5-year-old, then it will carry a large 50% depreciation burden and lead to a corresponding decrease in the IDV of the vehicle. Compare this to a 6 month-old car where the depreciation will be just 5% for calculating IDV. Since IDV directly influences the insurance premium costs, this means that the older your vehicle gets, the more will be the insurance premium for the same.
The safety features in the car
Whenever you install a safety feature in your car, not only does it protect from thieves and robbers, it also reduces your premium amount. Insurers love multiple safety features in a car as it reduces the risk profile of a customer. The presence of security features provides them with an added assurance for their client. A gear lock or a steering lock in your car can reduce your premium by as much as 5%. Installing the new anti-theft devices approved by the Automobile Association of India can also reduce the premium further.
Taking unnecessary add-on covers
Add-on covers are a big burden on the premium of a car. While all add-ons are not pointless, you need to choose wisely before going for an add-on. Some of the add-ons available in the market are road side assistance, return to invoice (RTI), depreciation Insurance and No claim bonus protector. It depends from person to person on what add-on is suitable for him and accordingly he can go for it.
A poorly maintained car will be an automatic choice for a premium increase. Make sure you take good care of your car and keep it in top shape with regular servicing. This way the car insurance renewals won’t be heavy on your pockets.
Like in all businesses, insurance too is a factor of demand and supply. If the insurance company thinks you are a risky customer, then your car premium will increase. Hence look at these reasons and see how you can bring down the insurance cost.