With the IRDA raising third party motor insurance premiums, motor insurance costs have risen. In times of high inflation, this is an added burden on vehicle owners. However, there are various steps you can take which would help cut down on your premium outlay. Here are a few:
Opt for a basic policy
A motor insurance policy mainly covers two elements; third party premium which provides for damage to a third party or vehicle  and own damage premium which takes care of damage to the policyholder`s vehicle. Over and above the main policy, there are  a slew of add-ons available. Riders are available for a number of eventualities – depreciation cover, accident cover, emergency  hospital cash, roadside assistance, cover for electrical accessories or loss of personal belongings etc. Although these covers can  be very useful, they entail higher premium. Thus one must judiciously select add-on features as per their need rather than  blindly purchasing those pushed by an agent. So, if you have an expensive audio system installed, it might make sense for you  to get cover for electronic accessories. Roadside assistance, on the other hand, would be of utility to the elderly and women  drivers. Selecting wisely will ensure that you do not end up shelling out high premium for options which you might never use.
Increase your voluntary deductible
Voluntary deductible or excess is the initial amount which you, the policyholder, agree to pay when a claim is made. The insurer only pays for the balance amount. If you go for a higher deductible amount, it means you would have to shell out a higher amount at the time of a claim. But this would bring down your premium as well.
Share personal information
Sharing personal details like age, marital status, occupation etc can help to obtain discounts on premium of up-to 25% as these factors determine the risk profile of the driver. For instance, the premium for a 35 year old married house-wife could be lower than that for a 17 year old college student. Certain insurers offer discounts for sharing such information.
Avail No-claim bonus
If you do not make any claim in a particular year, this entitles you to discount on the premium in the next year. If you have a number of claim free years and accumulate such bonus this could bring you discount of upto 50% on your premium. Thus, one should avoid making small claims if the repair amount is insignificant. Compare the repair cost with the saving on account of no-claim bonus and decide accordingly.
Minimize modifications to the vehicle
Any change to the vehicle, beyond the standard vehicle specification, can attract increase in premium. For instance, fitting alloy wheels or spoilers could increase your premium as could any upgradation to the engine. If you do make some changes, it is important to intimate the insurer as failure to do so could render the policy invalid.
Enhance the security of your vehicle
Adding security devices like an immobilizer or an alarm approved by the Automobile Research Association of India (ARAI) can help bring down the premium, the amount varying as per the insurer.
Buy online
Finally, one of the simplest ways to reduce premiums is to buy the policy online. There are various websites which offer motor insurance policies at substantially lower rates. This is owing to various factors, the chief being reduced distribution cost of the insurer. Purchasing the policy online could make your total premium cost 10-15% lower. Moreover, there are a number of aggregator websites which help you carry out a quick and convenient comparison of the available policies and make a judicious selection.
(The author is Arun Balakrishnan, CEO, BerkshireInsurance.com)
http://www.myiris.com/newsCentre/storyShow.php?fileR=20120910142334043&dir=2012/09/10
