How To Reduce The Car Insurance Premium For Old Cars?

Image Credits: Insurance Information Institute

Most of us might have an old car that you are too sentimentally attached to and don’t want to give it away. You might religiously polish it off every month, take it out for a spin and relive the good old times you had with the car. Besides, vintage cars have always been head-turners and a travel-back-in-time moment for on-lookers.

If it is still in a really smooth working condition, you might be unsure about how to deal with its insurance policy. The amount that you invest in the policy might not be actually worth it. Here are certain tips and tricks to reduce the premium of your car insurance policy to make it well-worth for your old cars.

Choose for a third-party insurance policy – A third-party insurance policy is the bare minimum policy mandated by the Motor Vehicles act. The premium for this policy is fixed by the IRDA and is only dependent on the cubic capacity of the vehicle. Thus for your old car, a third party car insurance policy is cheaper, and you can opt for them rather than the comprehensive insurance.

Claim your NCB bonus – No Claim Bonus is the bonus you get for not claiming during your policy tenure period. This bonus is often given as a discount on the premium you have to pay. With each passing year that you haven’t filed a claim, the NCB increases. Claim this NCB bonus when you renew your policy to bump down the premium amount.

Opt for voluntary deductibles – When you opt for voluntary deductibles, you agree to bear a part of the IDV amount. In this case, if you land in an accident, the insurance company will not pay you the full amount; you will have to bear a percentage of the IDV. If you are using an old car, the chances are that you will be driving it carefully and not too often. The probability of an accident will be very low. Opting for voluntary deductibles will reduce the premium amount.

Renew your policies on time – Do not think because you own an old car you do not have to renew your insurance policy. Renew your insurance policy every year and do it on time. Even if you do not use your vehicle as often, if you get caught without a policy, you will be liable to pay a fine that is way higher than your premium amount. If you don’t renew it on time, then your NCB bonus will lapse. And the next time you try to renew your policy, the insurers can charge you higher than what you were paying before because there was a lapse in the policy tenure.

Buy policies online – Buying a policy online has many advantages. You can easily compare quotes online, thoroughly research jargons, terms and conditions, and opt for the policy that best suits your needs and budget. Furthermore, you also eliminate the need for insurance agents and hefty paperwork. If you buy through an insurance agent, you would have to pay the middleman fees along with your policy. This can increase the premium amount.

As for Own Damage Premium discount – The Own Damage component in a policy covers the damages caused to your own vehicle. You can specifically ask for discounts for this component if you are using an old car.

Be loyal to one company – When you keep buying and renewing the policy with one company alone, it improves the rapport between you and the company. This can prompt companies to reward you with their loyalty programmes, extra discounts and preferential treatments.

Bring in all your insurance coverages under one umbrella – Along the lines of being loyal to one insurance company, you can also buy all your insurance coverages such as health insurance, home insurance, etc. with one company alone. This will further cement your relationship with the company, and you might be able to walk away with more discounts.

Enquire about low miles discounts – Many companies give low miles discount on the premium if you don’t use your vehicle frequently. Since lower miles inadvertently means lesser probability of accidents, insurance companies most often give discounts on the premium.

Don’t claim unnecessarily – Curb your tendencies to claim the policy for even the littlest of scratches on your car. It is best to file a claim when you have met with a grave accident or when your vehicle is completely totalled. Otherwise, you will lose out on your NCB bonus. Frequent claims can also prompt companies to increase the premium amount as well.

Arya T.N