Learn How To Keep Your Premiums In Check Even After Damaging Your Car


Driving on the roads is increasingly getting dangerous. With an increase in the vehicular traffic by each passing day, accidents are bound to happen. However carefully you might drive, there is no guarantee that your car will stay accident-free. The primary reason is the increased number of vehicles and the increasing number of reckless drivers driving these cars.

For this reason, the law, the Motor Vehicles Act of 1988, makes it mandatory to have a car insurance policy for all cars plying on the road. For a cautious driver, it may be an added expense, but accidents are unpredictable. Imagine, after checking the rearview mirrors, you are making a left turn while your indicators are turned on. Suddenly out of nowhere, a biker tries to overtake from the left and damages your car and flees away from the spot. With no fault of yours, now you will require to make an insurance claim. As a policyholder, you might have come across that your insurance premium increases as you make claims. Let us discuss in detail how to keep your premiums in check even after damaging your car.

Premium and accidents

Your car insurance premium does get affected when you file a claim. If you regularly make claims, your insurance premium is bound to increase. But if you are involved in an accident where you bear the cost of repairs, your insurance premium will unlikely increase unless the insurer wants to check your car before insuring it.

Reasons why your premium increases after a claim

  • Premium loading

A frequent motor insurance claim is the leading cause of an increase in premiums. This additional premium is termed as Loading. A loading charge is levied by the insurer to cover the high risk that the policyholder indicates due to repeated claims. The premium increase can be between the range of 10% to 15% depending on the past claim history.

  • No Claim Bonus (NCB)

If you file an application for a claim, you forego the no-claim benefit. It is a concession offered in your renewal premium which ranges between 20% to 50% depending on the number of consecutive years without a claim.

How to lower the premium despite damages to your car?

Here are some nifty tips that can help you keep your premiums in check.

#1 No-claim bonus protection cover

Although you lose no-claim benefits when you make a claim, using a no-claim bonus protection add-on, you can ensure the benefits are not lost. This add-on cover provides the benefit of making a specified number of claims before the benefits of NCB are no longer available. Since this is an extra feature, you need to additionally purchase at the time of buying a car insurance policy. Utilize a car insurance premium calculator to compute the impact of various add-ons in your premium amount.

#2 Voluntary deductible

A deductible is an amount that is mandatorily required to be paid by the policyholder. Since there are two types – compulsory and voluntary deductible, opting for the latter alternative will help you control the premium even after damaging your car.

#3 Avoid making an insurance claim

If the cost of damages sustained is in your capacity to pay, it is advisable to not make an insurance claim for keeping the premiums in check. This option needs to carefully evaluated with the compulsory deductible and no-claim benefits of your car insurance plan.

#4 Anti-theft devices

Fitting your car with anti-theft devices certified by the Automotive Research Association of India (ARAI) can help you avoid the jump in premium. Insurance claims might increase, but installing ARAI certified devices will help you lower the effective premium.

Remember these tips that help to reduce the impact of premium increase despite damaging your car.