How Can I Keep My Car Insurance Premiums Low?

7 Questions to Ask Before Buying Car Insurance

Car insurance premium can go out of budget if some smart moves are not made while buying a new policy or at the time of renewals. Simple decisions could lead to saving money on it. Read on to know easy tips which could reduce the cost of car insurance premium.

Tip #1 Retain No Claim Bonus (NCB)

The most direct way of availing heavy discounts on car insurance premium is the No Claim Bonus. As the name suggests, No Claim Bonus is awarded when you do not raise a claim against your car insurance policy. Here is how NCB increases for every claim-free year.

No. Of Claim-free Years Discount
One claim-free year 20%
Two consecutive claim-free years 25%
Three consecutive claim-free years 35%
Four consecutive claim-free years 45%
Five consecutive claim-free years 50%

As soon as you file a claim against your car insurance policy, the NCB cycle will reset. Which means you need to pay the full amount of car insurance premium on renewal. This can be avoided by driving defensively. Practice simple methods like, following lane discipline, stopping at signals, avoid over-speeding, etc.

Tip #2 Renew car insurance policy on time

If you miss the date of car insurance renewal, you will miss out on the benefits provided by car insurance. One cannot file a claim of any kind if the car insurance policy is not active. It is as simple as no policy no coverage!

Fortunately, car Insurance companies give you a window of 30 days to renew the policy. But, if you do not renew it within these 30 days, you will have to buy a fresh policy. Also, the continuity of your No Claim Bonus will be in danger. If 90 days have passed after the expiration, you will lose all the accumulated NCB.

Tip #3 Make Smart Claims

Follow a simple logic where you raise a claim only when the cost of repairing the damage is too high. Raising claims for minor dents and scratches is a bad idea unless you have bought NCB Protect Add-on. However, only 2 claims are allowed per policy year with this Add-on.

Tip #4 Don’t Buy Extra Add-ons

Add-ons are an excellent way to enhance a basic cover provided by a comprehensive car insurance policy. All the available Add-ons like Zero Depreciation, Return to Invoice, Engine Protection, Consumables Cover, Passenger Cover, Loss of Personal Belongings Add-on, NCB Protect, etc. are useful. However, you should only choose to buy those Add-ons which specifically suit your requirements. For example, if you are a safe driver with low car usage, you can skip buying NCB Protect Add-on. It is for those who are more likely to raise a claim multiple times in an active policy year.

Tip #5 Take Precautionary Measures

Car insurance will protect you financially in case your car is stolen. However, car insurance claim should be treated as financial backup. Taking precautionary measures by installing anti-theft devices will help you get a discount on the premium. Insurance companies deem you as a responsible owner if you take measures to protect your car and thus give you a reward in the form of a discount.


Along with following the tips mentioned above, providing accurate information like geographical location, the age of owner, profession, or marital status, will result in better pricing for the policy you purchase. Also, making extreme modifications to the car may increase the amount of car insurance premium.


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