If your insurance is up for renewal, be prepared to pay a higher car insurance premium in the coming months. No denying, insurance premium rates have been relatively flat for the past two years because of the COVID-19 pandemic situation. This was because people were working mostly from home and were not driving their vehicles much. It also meant fewer road mishaps, lesser claims filed and insurers not having to pay out much.
However, the situation has changed. In addition, with the present inflation rate, insurance companies are not able to keep the premium prices flat anymore. While high insurance premiums are sure to hit your wallet, there are several ways to reduce your car insurance premium amount.
No pandemic-driven slump anymore
Car insurance companies have been processing fewer insurance claims since the start of the pandemic two years ago. Due to the increased adoption of work-from-home models and frequent lockdowns, fewer cars were plying on the roads. It reduced the number of cases of road accidents considerably. All this made it possible for insurance companies to lower their rates and keep them flat. Some insurance companies even gave rebate benefits to customers.
However, it is not the case anymore. Driving rates are returning to pre-pandemic levels, resulting in car insurance companies bearing higher costs. Since insurers are grappling with more costs, they are left with no other option but to hike premium rates.
Inflation has led to an increase in the costs of rental cars, car parts, used cars, and new cars. Furthermore, supply chain disruptions are making it difficult to obtain car parts on time. In addition, many new cars have complex designs, making it difficult and costlier to repair them.
Another reason for insurance companies raising their insurance premium rates is the rising healthcare costs. These include disability and rehabilitation costs. With traffic levels going back to pre-pandemic levels, the risk of accidents has gone up, which means increased healthcare costs to attend to the accident victims.
Whether your rates will increase or not depends on a variety of individual factors as well. These include your insurance company and your place of residence. Also, your claims history and your vehicle make affect the premium cost.
Ways to reduce your payouts
Although the rising car insurance premium cost is inevitable, you can take certain measures to save yourself. These are:
- Compare, compare, compare
In India, dozens of companies offer insurance plans. Speak to your insurance broker or browse a price-comparison website to find a car insurance plan that fits your budget. More so, always use a car insurance calculator to know the difference in insurance premiums offered by insurers.
If you do not drive your car often, you can opt for plans that charge based on how much your drive. This will lower your premium cost significantly.
- Choose appropriate coverage
If you have an old car that has little market value, you can avoid buying comprehensive coverage with add-ons. Just third-party insurance is enough. That’s because the chances of your car being irreparable after an accident are high. In short, it is simply not worth paying a high premium for your old car.
- Bunch your insurance
Purchasing home and car insurance from the same insurance company is a smart move. This way, you can avail discounts for brand loyalty.
- Pay higher deductible
The deductible is how much you pay for replacements or repairs before your insurance company entertains your claim. By opting for a higher deductible, you can pay a lower car insurance premium. This can lead to more savings if you are a responsible driver and do not claim for a long period.
- Mount winter tyres
One more way of reducing your insurance premium amount is by installing winter tyres. Several insurance companies offer discounts to car owners who buy and install winter tyres.
- Check your eligibility for offers
Many times, people enjoy discounts on their insurance renewal amount via clubs, organisations, and non-profit companies. Check if you are eligible for any such offers as it can lower your insurance premium.
Since car insurance premiums are directly affected by high inflation rates, the trend of rising premium costs is likely to continue. Hence, make sure to compare insurance plans and purchase the one that offers desired coverage at competitive rates.