If you own a car, you must be aware of the cost of the insurance premium which is to be paid every year. Huge cost of the insurance premium increases the total cost of ownership of the car. This is even important while buying a used car online. Most of you must be thinking that this can not be avoided as it is the part of the cost of owning a car.
Is it True? No, it can be reduced.
There are several deductions in the insurance premium which may reduce the amount to be paid. One of the major deductions is NCB (No Claim Bonus). NCB is the discount given on the premium amount if the no claim was made for the insurance in previous year policy.
Generally, you get a discount of 10% of the part of premium amount which is due to own damage after one year if you have not made any claim. Then it increases to 20%, 25%, 35%, 45% and upto 50% at the end of the sixth year of successfully driving without making any claim. This, 50% deduction in insurance premium, is a huge amount of saving every year. For a small car, like Maruti Swift VDi, you may save upto Rs. 5000 every year in the insurance premium.
But, in case of any unfortunate event, you might have to make a claim for insurance for the repair of the damage in the car in accidental or non-accidental case. You may enjoy the free (or for partial payment) repair of the car without loading extra burden in your pocket. But this will make you cry while renewing the insurance for next year onwards. Then, your NCB becomes zero again and you will have to start fresh from 0% NCB deduction.
To, overcome this scenario, you must ask your insurer if they have an add-on, called as NCB retention cover, in the premium. This will cost you a little extra, but will help you to get fixed number of claims in a year without losing your NCB deductions in the premium renewal for the next year. Generally, you may have to pay around Rs. 1000 extra in your insurance premium to avail this NCB retention add-on cover. Some of the insurer who provide NCB retention add-on cover are Reliance general and Tata AIG. Both of them are equally good. However, reliance general is slightly better in terms of customer service. Reliance general provide two claims in a year without losing NCB deduction. I have personal experience of both of these two insurers, However I do not affiliate or get any commision from them. You might do your own research on the premium amount with NCB retention cover add-on as it is changing time to time.
Being aware of such a small information about your monthly or yearly expenses will enable you to save a lot of money.
I expect you to always drive carefully and do not require to claim the insurance for you, your family or your car in your whole life.