Insurance I Opener

 “Save 20% on your Car Insurance." You may have noticed this or similar claims screaming for your attention from the wayside hoardings on your drive to office or various TV commercials. Instinctively, you ask yourself: Really? Is it possible? Typically, you would have forgotten all about it by the time you reached office. But, if you had fallen for the claim, would you have really managed to reduce your motor insurance premium by 20%? 

Industry experts don’t agree to that completely. If you are buying a new car, it is definitely easy to get a "very cheap" cover. However, if you are shopping for a cover for your old car, don't look only for hefty savings, they warn. You can instead try your luck online for a small saving and extra features, they say. "Some insurers offer the best insurance rates to customers going online through the website. Generally, the savings quoted in advertisements are in comparison to the premium offered by other insurers for the same vehicle," says Amitabh Jain, VP - customer service (motor), ICICI Lombard. 

As for those fabulous offers that come with the new car, it is a different ballgame. Car manufacturers, dealers and insurers bundle offers, offering free insurance or subsidised 'one-rupee' insurance covers as a part of the package deal. "With car sales dipping by the day, car manufacturers are aggressively marketing these bundled offers to incentivise prospective car buyers," says Vijay Kumar, head of motor insurance at Bajaj Allianz General Insurance. 

However, the story is totally different when it comes to renewing your car insurance cover. This is because a number of factors, such as the loss experience, make and model of the car, RTO location, fuel type and so on play essential role in determining the premium amount. 

Your claim history also has a say in the premium amount. If you haven't made any claim in the previous years, then you get a benefit from the insurance company in form of a no-claim bonus (NCB). If you are a good driver with no or less claims history, you stand a good chance for lower premium. However, no harm in trying your luck online to get multiple quotes for car insurance to see whether you can save some money without compromising on the key features like IDV. 

CHECK FOR TIE-UPS WITH NEIGHBORHOOD GARAGE OR YOUR REGULAR GARAGE 

Every one needs a garage/ service station for keeping your vehicle up in shape. If you frequent the garage/service station in your neighbourhood for regular servicing, you can check out the premium quotes offered by those garages in tie-up with insurers. Otherwise you can also check for Insurers having tie-up with your regular garages.

"Often big dealers have tie-ups with specific insurance companies and become a part of their cashless network. In such cases, the garage owners/employees themselves take care of issues related to claim settlement because of the nature of their professional relationship. Dealers also combine Insurance cover with add-on Servicing offers as a package to attract customers." says Niraj Jain, CEO of InsuranceMall.in, an insurance broker. 

 "The flip side, however, can be that they may overcharge you in the final bill which will add some loading to your renewal premium." In such cases, you can seek an independent online premium quote from the insurer who has tied up with the service station. You may benefit from lower rates and still enjoy the benefits of the tie-up arrangement between the service station and the insurance company. 

Insurers say online insurance covers are cheaper by at least 5%. The logic is simple. The online medium lowers transaction costs for the insurance company and the company passes on this benefit to the customer in the form of lower premium rates. 

"For renewals, one can look for quotes from multiple insurance companies. Some of the companies offer the best quote when customers go online," says Amitabh Jain, VP - customer service (motor), ICICI Lombard. 

Insurance aggregators have made the task easier for car owners to get multiple quotes from different insurance companies at one place. These portals, such as Insurance Mall, Click2insure, Policy Bazaar etc give premium quotations based on the make and model of a car making the purchase more easier and transparent.Many times, the initial premium quotes given by the aggregator may appear higher as they are based purely on the make and model of the car. The final quote may vary based on finer details of the car. Once you identify the insurer offering the cheapest insurance deal, cross-check the final price offered by the aggregator/broker and the Insurer’s website before purchasing the policy. 

COMPARE PRICE AND FEATURES 

Don't just settle for the cheapest cover available. Many insurance policies look similar, but there are a few important factors you should pay attention to. For example, you should not opt for lower insured declared value (IDV) in a bid to opt for lower premium. IDV is the compensation you get in case of theft or total loss of vehicle due to accidental damage. 

"Ideally, the IDV should not be less than 15% in the second year and 20% in the 3rd year," says Jain of InsuranceMall.in. Secondly, you should look at the claims history of the company. "Car insurance being claim intensive, car owners have to look for the insurer's experience and the claim settlement history. In fact, rating agencies have rated insurance companies based on their claim-settlement history," says Kumar. 

Paying some penny extra for a good Motor Insurance is wiser than crying after a big loss.  

Source: Economic Times