Tips to Reduce Your Car Insurance Premium
Do you remember the gleam in your eyes when you see a red banner with the word ‘Sale!’ written on it?
All of us look for ways to save money and are always on the hunt for bargains, discounts, and special offers whether it’s for clothes, electronics, furniture, vehicles, etc.
Talking about saving money on vehicles, did you know you could do the same for your car insurance?
If you own a car, car insurance is a purchase that you cannot avoid.
Car insurance is a contract between you and the insurer to provide coverage for your car in exchange for regular premium payments. These premiums depend on various factors like your age, car model and make, cover amount, etc. So, for instance, if you choose larger coverage, your premium might be high too.
In this article, we’ll talk about a few ways by which you can reduce your car insurance premiums.
How Can You Reduce Your Car Insurance Premiums?
If you want to get the most out of your car insurance without breaking the bank, here's how you can do it -
1️⃣Choosing the Proper Cover, Based on Your Needs
When it comes to car insurance, there are two types of policies available -
➔ Comprehensive car insurance
➔ Third-party liability policy
|Comprehensive car insurance||Third-party liability policy|
|It offers broader coverage, including protection for damages to your own vehicle and includes third-party liability coverage. In addition, it covers damage from theft, fire, etc. Therefore, it is more expensive as compared to third-party insurance.||Third-party liability insurance covers any damages you might cause to other people and/or their property, while driving your car. It does not cover you and your vehicle, making it less expensive than comprehensive car insurance.|
|Choose comprehensive insurance if your car is new or you are a frequent traveler.||Choose third-party insurance if your car is old, rarely driven, or is going to be sold soon.|
2️⃣Driving With Caution
Your driving record and claims history can have a big impact on how much you pay for insurance. You will be labelled as "high risk" and consequently required to pay a significantly higher premium if you have a history of accidents and several claims.
The UAE's black point system evaluates and issues points to driver's licences for traffic violations. Your licence may be suspended or cancelled if you accrue too many points. This may result in an increase in the cost of your insurance. To keep your insurance premium low, it's essential to abide by traffic regulations and drive safely.
3️⃣Choosing Higher Deductible or Excess Amounts
Deductibles are the amount that you will have to pay from your pockets when you make a claim before the insurance company pays the rest. And, if you choose a deductible, your premiums will be lower since you agree to partake in the risk coverage. The higher your deductible, the lower the premium.
But, keep in mind that you will also be responsible for a greater share of any claims you make. When choosing the deductibles for your policy, it's crucial to take into account your own financial condition and risk tolerance.
Consider that your car insurance coverage has an excess of AED 2500 which significantly lowers your premiums. In this case, if an accident results in a bill for AED 7000, you would need to pay AED 2500 by yourself and the insurance company would cover the remaining AED 4500 for you.
4️⃣Selecting Add-Ons Wisely
Add-ons are basically extended features that you can customise your base policy with to enhance its coverage. While some insurance companies may include them in the base coverage, others may charge extra. And so, add-ons will increase your premiums. Assess whether you really need the add-on to save up on premiums.
If you frequently visit Oman, an Oman Extension Add-on would be beneficial to you as it will cover your vehicle when you travel there. But if you don’t, there is no point in adding this cover to your policy.
When you start your search for car insurance, it is vital to take enough time to compare various insurance quotes. Different insurance companies may provide different coverages at varying costs. To ensure that you receive the best policy that fits your needs and budget, analyse each quote carefully. Compare the deductibles, coverages, exclusions, as well as reputation of your insurer.
6️⃣Installing Anti-Theft Equipment
When you install an anti-theft device in your car, you qualify for discounts from your insurance provider.
These devices lessen the probability of your car being stolen, which in turn, reduces the risk of covering you.
For instance, when you have a theft alarm installed in your car, the alarm goes off when an intruder tries to access your car. This will lessen the chances of your car being stolen more than a car with no installation. And so, such a car will be eligible for premium discounts.
7️⃣Installing Telematic Devices
You can also get some discounts and lower your car insurance premiums by installing telematic devices in your car. These devices accumulate your car’s performance data and help the insurer to track your driving habits and behaviour.
Car insurance is a mandatory requirement if you’re a car owner. Now that we have come to the end of this article, we hope you have better clarity on how to reduce your car insurance premiums!