Car Insurance is basically a necessity from the moment you step in your car, unless and until one is not concerned about the vehicle. It was initially introduced as a part of General Insurance in the United Kingdom in accordance with the Road Traffic Act 1930. It goes with the saying ‘Prevention is better than cure’.
Why Car Insurance?
- Legal Obligations: It has been made a compulsion in 48 states to have car insurance under the law. To comply with state laws, it is preferred to have your car insured.
- To provide a safety to your finances: Almost everybody is concerned with the allocation of their finances and hence, no one would like to engage in activities, for instance, accidents, which puts a leakage in their finances. Car Insurance helps you provide a safety to your money in case you came across any accidents or so.
- To protect your vehicle and yourself: The primary purpose for taking insurance is to protect your vehicles from any accidents, robbery or any other unforeseen incident. Almost with every car accident, comes a threat to your own health. But there isn’t much to worry when there’s an insurance backing you up.
Tips to cut costs on Car Insurance
- Obtain various insurance: Basically, you might be liable for a discount or concession if you choose to insure multiple vehicles at a time. You could collectively buy insurance along with your friends, relatives, etc. in order to get some discount rather than collaborating with any random person.
- Drive safe: This should probably go without saying, but today’s generation as well as roads everywhere cannot be trusted. Also, let’s not forgo the term ‘no claim bonus’ which is a kind of reward provided by the insurer if you haven’t made even a single claim. It is a reduction in your premium and also accumulative in nature, for instance, if you buy a new car and you haven’t made any claim in your previous car insurance, then no claim bonus will pass on to your new insurance.
- Go for a Defensive Driving Course: There’s a chance that insurance companies might offer some discount to the ones completing a Defensive Driving Course. But do make sure to ask your agent if there’s this kind of facility available with the insurance company.
- Big Cars; Big Premiums: Driving a 25 kmpl SUV might sound very fancy unless and until you come across with its insurance costs. This clearly means the cost goes up with the size of the vehicle. Some insurers might give a concession if you opt for caring for mother earth and buy hybrid.
- Raise your Deductibles: When going for car insurance, you can opt for deductible, i.e., amount of money you need to pay to the insurer at the time of any claim you make. For example, you are involved in an accident causing Rs 10000 damage to your vehicle and your deductible is Rs 2500, then the remaining expense will be borne by the insurer. Deductibles and Premiums are inversely related, hence, it is always advisable to go for higher deductibles. This is because lower deductibles means less risk for you and your insurer bears more responsibility when you make a claim. Therefore, the company charges more premium. On the other hand, higher deductibles would relax the insurer and therefore, would mean lesser premiums. Higher deductibles can be achieved by not filing regular claims. For instance, in case you have a Rs 5000 deductible and your car needs repairing worth Rs 4000, you can choose not to go to your insurer and bear this expense yourself.
- Enhance your Credit Rating: A record of a driver can play a huge part in determining vehicle insurance costs. Credit Rating, in general, determines the creditworthiness of the policyholder. So, it’s advisable to keep your credit rating high by regular payments and avoiding any delays, driving safely and maintaining good records.
Hence, you can drive without any worries if you ensure safety to your vehicle and also provide yourself with a financial support system with the perfect car insurance.