From Maruti Suzuki to BMW, many car manufacturers have announced that the prices of their products would rise from January 2021 as raw materials get costlier.
The rise in car prices could directly impact the cost of the motor insurance policy, as the cost of an insurance plan is directly related to the expense of the vehicle. As per the Motor Vehicles Act, it is mandatory in India for every vehicle owner to buy a motor insurance policy.
Compare prices
There is a lot you can do to offset the premium cost hike. The simpler options include comparing policy costs on insurance companies' websites and buying it online instead of dealers. You need to sift through the policy features, the premium cost, Insured Declared Value (IDV), to ascertain if better options are available.
"With an increase in car prices, the insurance costs go up, but we recommend car buyers to check different options for buying insurance. They can check insurance on a company's website directly and avoid buying from dealerships to save some money," says Animesh Das, Head of Product Strategy, ACKO General Insurance
Opt for add-ons carefully
It is better to buy useful add-ons like zero depreciation, roadside assistance.
"Usually, the premium hike will be of the same order as the car value hike. But, if the car buyers optimize on the coverages like add-ons, then they save on some money," added Das.
No-Claim Bonus (NCB)
If you are renewing your motor insurance policy, then make sure to check if you are eligible for any no-claim bonus from the previous insured year. Such a bonus can be carried forward and will help in reducing the premium cost.
"If you have sold an old car to buy a new one then you pass the no-claim bonus to your new car and save some premium," says Das.
