How to lower motor insurance premium?

motor insurance premiums

As widely known, having a motor insurance is a legal mandate in India and around the world. People generally tend to opt for a comprehensive motor insurance plan which might offer them an own damage as well as the third-party damage cover too. Also, the premium paid for the motor insurance is also getting increased every year. Thus, for people, it’s getting difficult to pick a motor insurance plan which best fits their budget. If you’re looking forward to providing ways to lower the motor insurance premium to your customers, the under-mentioned points can be of great help.


  1. Avoid small claims

Always make sure that your clients know that for every claim-free year, they are entitled to accumulating bonus in most of the motor policies. Therefore, avoiding claims for small expenses is appreciated. What comes as a fascinating fact is that over the period of 5 claim free years, you can even help your clients reduce their premium maximum up to half of the amount. Well, people miss this opportunity and end-up demanding claims for smaller expenses associated with vehicular repairs. Now, you can tell your clients that it’s viable if they pay for smaller expenses from their own pockets and save the opportunity for the future.


  1. Declare absolutely correct IDV

IDV (Insurance Declared Value) is the value of your vehicle which has been decided by a dedicated motor insurance company. In case of any theft of absolute loss of vehicle, Insurance Declared Value is the sum which would be paid to the policyholder by the company. Insurance Declared Value is the maximum your client get by an insurance company. Now, not only you should inform the clients about the correct IDV, but you might also tell them IDV is calculated by subtracting the market price of the vehicle and depreciation value, respectively. IDV is truly a deciding factor when it comes to buying a motor insurance for your clients. If you help your clients value the IDV correctly, the premium amount can also be reduced.


  1. NCB transfer

An array of people out over there doesn’t know that they can get their No Claim Bonus of the previous vehicle transferred to the new vehicle’s insurance. As an agent, you should strive to inform your customers and future policyholders regarding the same. Tell them that it’s important to retain the motor insurance even after they sell the vehicle. One of the ways to enjoy the post benefits of No Claim Bonus and thus, reducing the premium is through the above-mentioned method. There might be a case where your customer is not buying a new vehicle after selling the former. You must inform that they can transfer the previous NCB’s to get a discount whenever they purchase a new vehicle with added ease.


  1. Prefer higher voluntary deductible

As a motor insurance agent, you must know that the deductible is the amount of the claim which a customer pays directly from their pocket before the policy comes into play. You can inform the customers that there are mainly 2 types of deductibles in the world of motor insurance. The compulsory and voluntary deductible scheme. One should take note that opting for a voluntary deductible can lower the premium amount significantly. For example, if you opt for a voluntary deductible of Rs. 2,500 & compulsory deductible of Rs. 500, you might end-up getting over 20% discount on your premium amount. But, in case of an accident, you will be required to pay both, the voluntary deductible as well as the compulsory deductible, in this case, Rs. 3,000/-.


  1. Don’t let the policy lapse

One must know that if a lapsing policy isn’t renewed on time, in a majority of the cases, you’re required to start the policy all over again. Thus, it is also certain that you will have to get your vehicle inspected again. Further, the premium of the motor vehicle will be calculated all over again. If your motor policy lapses, you might also be prone to escalated prices. Also, as a policyholder, one can’t just afford to lose the accumulated bonus. Therefore, in a nutshell, to avoid the annoying positions and end up paying more, always renew the policy on time.


Apart from the above-mentioned points, informing the customers that a lapsed policy can disqualify them for a Non-Claim Bonus, is important. You can also suggest them to maintain a good credit score. If your client has a robust credit history, then you certainly can help them cut the insurance costs. A majority of motor insurance companies make use of credit information for the purpose of pricing the auto insurance policies. If an individual is effectively managing the credit, the same can significantly reduce the premium amount. Also, there are companies who offer low-mileage discounts to motorists who drive lesser than the stipulated miles every year, an agent should take note of that as well.

Read more about types of car insurance covers and their benefits

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