"Buying a motor insurance policy is easy. But don't be in a rush to buy one if you want a discount on the premium," says Vijay Kumar, head, motor insurance, Bajaj Allianz General Insurance.

Motor insurance policies are of two types - a liability-only policy where the cover is provided for third-party liability (TPL) for bodily injury and/or death and property damage. In addition, there is a personal accident cover for the driver. This cover is mandatory under the Motor Vehicles Act.

Second, there is a comprehensive policy that covers loss or damage to the vehicle insured and TPL. It entitles you to claim compensation, in case your vehicle is stolen or damaged. Also, there is a cover for additional liabilities.

Motor insurance premiums, in case of the comprehensive policy, consist of two parts - own damage premium and third-party damage premium. The former is 80 per cent of the total premium.

If one is seeking discounts, one can get it on the own damage part.

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No-claim bonus

Last year, instead of renewing his motor insurance policy with the insurance company, Rakesh Mishra spent time researching into the other available options.

The hard work paid off. He learnt how he could use exiting 'no-claim bonus' to his advantage, to get a discount on his first-year premium on his new car.

No-claim bonus is a discount granted during policy renewal to customers, who have not claimed insurance in the previous year.

The discounts start at 20 per cent in the second year, and go as high as 50 per cent in the sixth year. It means a saving of minimum Rs 1,600 (at 20 per cent) on a premium of Rs 8,000 for a car insurance policy.

Since it is transferable to a new vehicle, if the old vehicle is sold, Rakesh sold his old car and used his 50 per cent no claim bonus to get a discount on his new car.

He paid only Rs 6,000, instead of the Rs 12,000 premium, on the new car.

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Online discounts

Insurers, too, are looking to incentivise insurance customers by giving discounts to those buying or renewing policies online.

It helps the company save on processing and intermediate costs, besides sourcing valuable customer data.

"Those who log on to our website are asked to give information about themselves, and depending on how much they are ready to share, they could get an additional two-five per cent discount on their premium," says Kumar.

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Differently-abled persons

Not many are aware that differently-abled people opting for a customised car are offered a good 50 per cent discount on their premiums by insurance companies.

Negotiating discounts

Although this cannot always be counted on, most car insurance agents are willing to share a part of their own commissions with a new client.

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Some of the other optional discounts are already mentioned in the proposal form:

Voluntary excess

Insurers offer customers an option of voluntary excess. It results in the customer bearing certain amount of loss each time he files a claim.

This amount would be considered as the voluntary deductible amount and the customer is eligible for a discount.

"If a customer perceives oneself to be a safe driver and if the usage of the vehicle is limited, he can use this option. The deductible ranges from Rs 1,500-15,000 and discounts for opting these deductibles are between 15-35 per cent," says Ajay Bhimbhet , managing director, Royal Sundaram Alliance Insurance Company.

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Anti-theft device

Installing an anti-theft device, such as a central locking system or an alarm, can help you get a discount of 2.5 per cent of the premium.

The device, however, has to be approved from the Automobile Research Association of India.

"Insurance companies believe the more you care for your car's safety, the lesser claims you are likely to make," says Amitabh Jain, vice-president, customer service-motor, ICICI Lombard.

Memberships

Members of a recognised automobile associations, such as the Automobile Association of India and Western India Automobile Association, are eligible another five per cent on the premium.