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Safety tips to lower your auto insurance premium

By Naval Goel
May 04, 2016 13:30 IST
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There are many ways to lower your auto insurance premium rate but the best way is to add safety features to your car.

Undoubtedly, auto insurance offers protection for your car. It saves you from making hefty expenditure in case your car crashes into another or vice-versa. However the convenience is not available free of cost. You have to pay car insurance premium for it but there is something else too you need to have to make your insurance company pay for the losses in case something untoward happens to your car. That is, your caring attitude towards your car.

An insurance company provides protection of any kind only if you have insurable interest in the object you want to insure. No doubt, your car is one of your most valued possessions but simply insuring it does not makes sense to your insurance company.

If insurance companies share the responsibility, they, in turn, want you to be equally responsible for your car. They expect you to take care of it in a smarter manner which goes beyond just acquiring insurance.

So what is it?It is usage of safety features of your car that guarantee the safety in some way or the other.

How does safety features bring down the premium rate?

When you approach an insurance company to get car insurance, it considers various factors like your gender, age and the locality where the car is to be driven, your car’s make and model etc. But it also takes into account the safety level you maintain for your car. It counts the features that make your car safe while driving. It examines how each feature you have added to your car saves it from collision. The insurance company while factoring in other aspects of your driving gives rating to each safety feature and determines the premium rate in your specific case.

Insurance companies do so because they want to bring down the possibilities of accidents as much as possible so that they do not need to entertain claims often. The number and kind of safety features installed on your car determine the level of safety for you along with your car as well as the risk perception in the view of your insurance company. The better the safety features the more are the chances of no-claims or reduced number of claims. And lower possibility of claims means lower premium rate or higher discounts for you.

In India, either the manufacturers refrain from installing high-end safety features like airbags or buyers refrain from buying cars with such features because of high-cost involved in it. Since it is not mandated to have safety features in your vehicle, people do not really opt for them. Are you willing to derive benefits from such features? If yes, then let us explore some of them and see what you can acquire to make your car safer.

Airbags: These are meant to save your head from colliding into the dashboard or frontal objects in your car. They drop down from the roof, steering wheel and door linings in case of a major crash.

Anti-lock brakes: These are useful when you suddenly want to apply brakes. Anti-lock brakes help prevent skidding of tires by maintaining traction between them.

Anti-theft device: Anti-theft device like security alarm protects your car when somebody is trying to steal or burgle into your car.

Electronic stability control: Similar to anti-lock brakes, this feature helps to prevent the car from spinning and sliding out of control.

Safety alerts like reversing sensors and cameras: This feature comes handy when an object is too close to your vehicle and can cause a crash.

Automatic headlights: They turn on automatically while driving through low light conditions. They are helpful especially when the car is crossing the area that has dim or no lights.

Just like the above-mentioned ones, there can be other features as well like engine cut-off systems, head restraints and injury protection etc that can be offered to you. You have to gauge how each one of them can be helpful to increase safety and lower the premium for your car insurance.

However, you also need to keep check on features like alloy wheels and other high-end features and avoid them if you do not need them. These features can bring unnecessary attention of insurer to your driving style and can cause you to pay high premium.

Over modification of your vehicle may also cause you to lose some insurance features.

How much can you save?

In India, discount of 2 to 5 per cent can be availed on your annual car insurance premium if you have installed the safety feature like anti-theft device.

For instance, if your car insurance premium is Rs 5000 per annum and you have anti-theft device attached to your car, you are eligible to get discount of Rs 100 to 250. If you have some more similar features you can avail additional discount. Nevertheless, there is a limit. The maximum amount of discount can go up to Rs 500 only. In case you have substantial safety features installed, your annual premium can come down to Rs 4500.

It has been noticed that people are looking for cheap auto insurance policies. Or if not this, they look for discounts on their auto insurance rates. There are many ways to lower your auto insurance premium rate but the best way is to add safety features to your car. It not just brings your premium amount down but it also ensures your safety while using your car, it ensures safety of the expenditure made by you on your car. And that is what you want eventually. Isn’t it?

Note: Do not just add safety features to your car but also remember to mention them while buying car insurance policy to avail lower premium amount.

Photograph: Michael Dalder/Reuters

Naval Goel is CEO and Founder, PolicyX

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Naval Goel