Having a valid car insurance policy is mandatory given the rules specified by the Motor Vehicles Act, 1988. As such, if your clients have a car, they need to have a valid car insurance policy attached to it. Car insurance policies have specified coverage tenure. Once the tenure is over, the policy should be renewed to ensure continued coverage.
When renewing, you would find that the car insurance premium is dynamic in nature. It would change depending on the different factors associated with the car as well as the existing car insurance policy. Moreover, there are certain factors which, if you are careful, can help in lowering the car insurance premiums for your clients at the time of renewals. So, if you don’t want your clients’ car insurance premiums to increase, advise them to avoid doing these five things –
- Making a small claim
Car insurance policies allow a No Claim Bonus (NCB) whenever there is no claim in a policy year. This bonus acts as a discount on the renewal premium. Moreover, the rate of NCB bonus also increases with every subsequent claim-free year. However, whenever a claim is paid, the entire accumulated bonus is wiped out and policyholders don’t get any discount on their renewal premium. So, if your clients face damage which does not cost much to repair, advise them to avoid raising a claim in their car insurance policy. It would help protect their NCB discount and they can get a lower premium on renewal.
- Avoid lapse
As stated earlier, a car insurance policy comes with a specified tenure and your clients need to renew the coverage before the tenure is over. If, however, the coverage is not renewed and the coverage period expires, the policy would lapse. Renewing a lapsed policy is hassling as your clients would have to get their car inspected before renewal is allowed. Moreover, renewing a lapsed policy also incurs higher premiums than renewing an active one. So, a policy lapse should be avoided so that the renewal premium is not increased.
- Buying without comparing
Do you know how many insurance companies are there in the market offering a car insurance policy? More than a dozen! Every insurer charges a different rate of premium for a policy on the same car. So, comparing becomes necessary wherein you and your clients can check the premium rates of multiple insurers and then buy a policy which has the lowest premium rate without compromising on the coverage. When your clients don’t compare, they cannot find the best rate for their car insurance policy. So, always advise your clients to compare before buying if they don’t want to pay a higher premium.
- Not hunting for discounts
Car insurance policies offer different types of discounts on the premium. Policyholders can get a discount for buying online, for installing safety gadgets in the car, for being a member of an approved automobile association, etc. If you don’t hunt for these discounts, the car insurance premium would be high. So, if you don’t want the premiums to be high, always hunt for the available discounts when renewing your car insurance plans of your clients so that they can save on their premium outgoes.
- Choosing unnecessary add-ons
Add-ons are optional coverage benefits which provide better coverage in a car insurance policy. While add-ons prove to be a useful coverage, your clients should be careful when choosing the add-ons with their car insurance policy. Each add-on comes with an additional premium and if they choose unnecessary add-ons, the premium would increase. For instance, if your client lives in an area which does not have a water-logging problem in monsoons, buying an engine protect add-on would be unnecessary. So, educate your clients to avoid buying unnecessary add-ons and help them in keeping their premiums low.
Remember these five points and educate your clients about them too. If they avoid these things, they can lower their car insurance premiums every time they renew the policy. They would be happy with the saving that they can make and their trust in you would also increase as you educated them about the ways of saving on their car insurance premium.