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Voluntary Deductible-Option For Saving Car Insurance Premium?

We all know that how much car insurance is a necessary thing from the perspective driving a four wheeler on Indian roads and keep you favourite drive in the best possible condition.This is a fact which everybody needs to appreciate because while buying a car you are buying into something the value of which keeps on depreciating each year so investing further  for repair and damages is something that is not worth of doing so and this where your car insurance policy comes as great help.

Buying the right car policy not only requires a good amount of research but you should be smart enough to understand which addon to opt for and how can one save money on premium or otherwise you will always end up buying a plan which would be a complete mismatch to your needs and you might end up paying a higher premium,not worth of paying.


There are other mistakes which people end up making while being super obsessed towards savings money on premium, policyholders select some options which might give the initial discount while buy best car insurance policy online but which deeply affect you while making claim, one of them is when people voluntary deductions. To understand the worry it can create let’s first what voluntary deduction is ?

A deduction means an amount of money which a policyholder commits to pay from his/her own pocket at any point of time if a situation of claim arises.In any comprehensive car insurance policy there are two types of deductions which are available:

a)Compulsory deduction , this particular deduction is pre-fixed in any car policy.The insurance regulator sets the rate for the same. As per the current rates, the compulsory deduction is Rs.2000 if the car has more than 1500 cc engine or otherwise the rate is Rs.1000.

b)Voluntary deduction, this particular deduction is something which the policyholder himself accepts to pay. In a case like this insurer always incentivize the policyholder with certain percentage of discount on premium. A clear view of the table below can give you a clear idea of discount one can get avail

Amount of Voluntary deduction

Discount on Premium


20% on the own damage premium, subjected to a maximum amount of Rs. 750


25% on the own damage premium, subjected to a maximum amount of Rs. 1,500


30% on the own damage premium, subjected to a maximum amount of Rs. 2,000


35% on the own damage premium, subjected to a maximum amount of Rs. 2,500


The discount may look very attractive initially but the real problem starts when you make claim. In most of the cases you end up paying 50% of the claim out of your own pocket which defies the reasons why you bought the car policy.

To understand this in detail, take the case of Varun who drives a 1000 CC car and faces an accident.The claim that he end up raising with his insurer is Rs.15000 which was paid during repairs but to his astonishment his insurer only paid him Rs.7000. This is a classic case when you become super obsessed on discounts while renewing a policy.

Calculation for Varun’s claim:

Total Claim Varun’s raised (A)


Consumable parts and components deduction (B)


Compulsory deductible Amount (C)


Voluntary deductible Amount (D)


Total claim paid by the insurer [A – (B+C+D)]




The above is a classic case, while opting for voluntary deductible to get few rupees of discount initially led Varun to pay Rs.8000 out of his own pocket. He forgotten the facts no insurer covers the fiber and plastic parts of the car and even there is a concept compulsory deduction’s one should always keep in mind less price means cheaper returns and that applies to a car insurance policy also.


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Five Factors Which Can Increase Car Insurance Premium

A the recent proposal by the Insurance regulator to increase third party cover by 50% and which will become effective from 1-April 2017 for car and SUV above 1000 cc might have make lot of four wheeler owners unhappy. As this has become regular phenomenon in last few years so you should always look at finding smarter ways to control the cost. Since the third party cover rates in most of the cases are controlled by the Insurance Regulator but there are other ways by which your Insurer can incentivize you with a discount but you need to consider few important things.

5 Most important factors can affect premium pricing of car insurance plans are:

1.    You might not be aware of the fact that your car insurance premium does depend a lot on the city you live and city you drive your car. Car owners living in cities with high traffic intensity end up paying higher premium compared to small town dwellers.

2.    Age is another important factor governing your car insurance policy premium. Even your marital status does also affect the premium. People who are younger and single always end up paying higher premium because as per data drivers at an younger age tend have harsh driving habits making them more vulnerable to making claims. Even in most case women end up paying a lesser premium compared to men. Women are believed to be better and safer drivers compared to men.

3.    Your car or four wheeler engine type can strongly add more cost to your car insurance premium. Cars run on diesel turn to have higher IDV increasing the cost of premium.

4.    Your car policy premium also get affected by the type of coverage you have opted for.If try over customization by adding add-ons which might of use to you can increase your car premium. Say you end up adding Zero Depreciation Add On In A Car Insurance Policy even when your car is already 5 years old would increase the premium sustainably.

5.    If you are very much conscious with your car’s protection and have installed additional security features well in advance, you can always claim for discounts from your insurer.

The factors listed can act as guide book on how can you control the car insurance premium cost at any point of time but it always advised to follow safe driving habits. Don’t make claims on your policy if the claim amount is less than 20% of your car’s IDV and you end up making use of your car insurance coverage is a much better and getting discounts on premium every time because of higher NCB.

Other than these, always try to follow a smart strategy while buying or renewing car insurance policy an older one but doing smart online comparison of various offering which exist in the market and which in turn can help you save more.

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Things One Should Know Before Applying For Zero Depreciation Add On In A Car Insurance Policy

Let’s first understand what really zero depreciation adds on actually means. To understand this better take the case of problems faced by Mr.Swami. Last year due to some serious accident Swami needed a fully fledged repair of his car but when he went back to his insurer for getting the repair cost reimbursed, the insurer only paid 70% of the cost and rest had to be borne by Mr.Swami out of his own pocket .This made him very furious but one thing that he forget is that his existing car policy was just a plain vanilla comprehensive insurance plan. In regular comprehensive car insurance plan without any zero depreciation add-on it is always the liability of insured to pay for difference in the market value and depreciated value of any part that is insured under the policy. So it is always advised to a policyholder to opt for zero depreciation cover to protect himself from paying high cost at the time of claim settlement.

Basic difference between Zero depreciation cover and Normal car cover:

To understand the difference lets judge both forms of cover four basic parameters which can give can possibly give you better understanding of things:

a) What happens during claim settlement?  So when you make a claim in a policy which already has zero depreciation add-on attached to it you can get full settlement of your claim without causing an dent to your pocket due of depreciation whereas in a normal policy you as a policyholder need to bear the cost of depreciation out of your own pocket

b) Premium: In a case of zero depreciation cover since your insurer bears the depreciation cost under the policy so for obvious reasons the premium would be always higher than a normal car policy.

c) Cost of repair and replacement of parts: Say in case you required massive repair of your car which also need replacement of certain parts of your car, a comprehensive car policy with zero depreciation would bear the total cost of repair and replacement cost but that is not the case of a regular comprehensive policy.

d) Age of the car:  This is one of the important factors which can help you decide whether to take a zero depreciation add-on or not. Most of the insurers offers zero depreciation add-on to cars which have age of less than 5 years .In fact as the age of the car increases depreciation risk also increases and even if you take zero depreciation for a old car then there are chances that still you might have bear some part of the cost while making a claim. So while deciding upon a zero depreciation add-on one should consider the age of his/her car because there is no point of paying an extra premium if the age of the car has crossed 5 years.

Read also - Zero Depreciation cover for your Car Insurance Policy Is Worthwhile?

So it is always advised to buy a zero depreciation add on for a new car where the same add some value. Another important factor one should remember in case you have opted by a zero depreciation cover please don’t make a claim multiple times in a year and make a claim only when the claim size is big. Multiple claims might not be even entertained by your insurer and they might also have some limits on the same   

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5 Great Reasons Why You Should Buy A Car Insurance Policy Online

In today’s world a lot of people are using online platforms to buy different kinds of product and services. A lot of the fashion stuff today is also bought virtually though you always need a perfect fit for the same so why not a car insurance policy?

 The major reason behind it is a lot of misconceptions surrounding the same regarding authenticity & reliability. One should be very clear that any insurance broker or an aggregator who is selling insurance online has to have an IRDA license similar to an offline broker or an advisor. You can even see their license numbers written in the footer of their websites as mandated by IRDA. Now looking at the reliability factor, this is another misconception why people don’t buy car insurance plans online. Doing a transaction online today is even been promoted by the Government of the country today and even offering incentives for it, so reliability is also no more a factor which should govern your decision to buy an insurance policy online.

But still if you are wary or reluctant about buying a car insurance plan online then you should better look into the benefits as discussed below

  1. It’s quite cheaper: The first and the foremost benefit of doing the same is it is quite cheaper. Most of insurance companies offer low premium rates because it involves less paper work and there are a lot of operational savings  also which is generally passed on to the consumer if he or she is buying plan online.
  2. Transaction is completely paperless: Getting into paperwork can turn quite tedious, buying a car policy offline requires you submit a lot of document to the insurer. On the other hand if you try doing it online, it is just few steps and the thing is done.
  3. Ease in decision making: Another important benefit buying car insurance online gives is that through any of the broker or aggregator website you can actually compare online car insurance policies at one go from different insurer. You just need to be very clear about what you require. But if you try doing the same through an offline process it is technically not possible and there are high chances that you end up buying a wrong product. So buying a car policy online eases the process of decision making.
  4. Easy, time saving and convenient : Buying a car policy online from the comfort of your home may be the nicest thing this has to offer. Doing it offline visiting insurance company offices, collecting document and then resubmitting it can be quite tiring process. Online makes the process much easier, you save a lot of time and at the end of the day it is higher satisfaction.
  5. Instant policy issuance:  Even if you do it on the eleventh hour then also you can get the policy issued then and there and the same get delivered to your registered email address by the insurer. You may fall in a situation where your car policy is expiring tomorrow and you need to travel outside. In a situation like this buying a car policy comes as real boon. It is just a few step process and the policy document delivered to you instantly from where you can just take a print out and carry on with your plans
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Few Things Keep In Mind To Make Easy Renewal of Your Car Insurance Policy

In today’s world car insurance renewal is no more a complex task to perform. As tricky as it sounds with the development in the insurance industry and new regulatory changes brought in by the regulator has made the process easier. Now with a click of a button you can not only renew you insurance policy with the old insurer but also if you want to switch to a new one you can also do the same very easily. The newly available convenience brought in by insurers and insurance advisor going online not only made the renewal process but also taking a new car policy has also become easy task to do. Other than that Renew Online Car Insurance Policy and purchase also gives an opportunity to every to compare between offerings of various insurers very easily based upon your need but it also lead to huge savings for the customer also.

Before we proceed further one thing that need to be keep in mind is that third party insurance cover is the minimum mandatory requirement under car insurance as per Indian law if you are owning a car or any four wheelers and driving it on Indian roads.

Though the process of renewal has become hassle free but to avail this you need to keep few things in mind:

Always do timely renewals:  Once of the toughest thing in case of renewing your car insurance is to remember your car insurance renewal date. Though the problem has been taken care by insurance providers in case of two wheeler insurance policies by launching long term plan but nothing of that sort been done in case of car insurance. If in case you have forgotten the date you should notify the same to the insurer and fix an appointment for getting the car surveyed. Timely given notification will help you save money on renewal which otherwise you would have paid in case of an expired policy.

Keep your documents ready:  Do ensure that you always be ready with the documents relating to expiring policy with details of claims which you might have made otherwise so that insurer can give you the right benefits associated with No claim bonus. Other important documents which are important at the time of renewal are documents relating directly to the car like car manufacturer’s details, car model and brand details, car registration zone/city, RTO’s address and the first date of registration.

Online renewal: In the present context renewal also has become easy process because now you have opportunities to do the same online. With just a click of a button you can do it in a paperless mode. You just need to visit the insurer’s website and use the renew policy option to initiate the process. But before you hit the submit button you should look at the following details should be filled right which:

  1. Car policy number
  2. Registration details
  3. Details regarding the past NCB

You should doubly check these details and match the same with your hard copy before proceeding further. Even if during the renewal stage you are thinking of switching your insurance provider even then the same can do the same online. You can use insurance comparison website like where you can put the relevant detail regarding your car and get premium quotes from multiple insurers at one go. The best thing of doing a online comparison is that you can get a fair comparison with definite premium cost which if otherwise done offline would have been a hectic task.

Other than the three things mentioned above which you should always keep in mind during renewal , the best of part of doing it online makes easy to make payment for your premium. You can use a debit or credit card or even net banking to process the payment which makes the process super easy. The transaction becomes paperless and the policy document is also delivered as soft copy instantly to your registered email address. This saves you from not getting into the situation of riding an uninsured car.

If remembering renewal date is still a tough thing you can set reminders online in your insurers website or on the comparison website for Compare car insurance online policies which will automatically notify you about your upcoming renewals. 

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Understanding Add-On Car Insurance Covers And How Much They Are Useful

You actually start feeling importance of your car insurance when standing in a garage and waiting for your damaged car to be repaired post an accident or in a police station reporting for your last car. This is what your car insurance plan does for you. Though you might feel much pinch on your pocket in scenario like this but still in most cases least 20% of the loss have to be borne your pocket only. This is because though your car policy is called a comprehensive but still there are many things which the basic cover of the plan doesn’t cover and that is where the Add on car insurance cover come as a great help. Though the extra premium that you pay for these add-ons may not be affecting your overall premium and but it always important to understand where to spend and where not so that you can get maximum benefit from your car policy.

To understand all these add-on covers let’s try to understand some important ones-

Road side assistance, the extra premium which your insurer might charge you for this add on may be only Rs.100 to Rs.200 for a particular term but at times it can become. Think of a situation you are out of fuel in the middle of highway or you have flat tyre or your car broke down in the middle of night and nothing is close to for help. This add-on becomes a help tool. As we analyze this would be very helpful for women drivers or old aged car owners. You at least have somebody to always call upon for your help in case of unforeseen emergencies like this.

So we feel it worth paying for this cover.

Zero depreciation, this is an add on cover which comes very handy in the initial years your car purchase but if it is an older car it doesn’t makes any sense. Generally policies bought without zero depreciation the insurer would deduct the depreciated value from the claim but that doesn’t happen in case when you have opted for zero depreciation. If we try to evaluate the add-on cover by getting into more minute details we find that the same has is more effective for cars with on road price higher than Rs.10 lacs because in this case the cost of parts are also on the higher side. Plus if you feel your driving habits are quite disciplined the add on is generally of no use to you.

Read related article - Zero Depreciation cover for your Car Insurance Policy Is Worthwhile?


Engine damage add on, this particular add-on is generally priced in the range of Rs.600 to Rs.1000 so technically it is not a huge to your base premium but is it worth investing that money. Engine damages generally happening due to unwanted events other than accidents are not generally covered under your base cover. Mistakes like running the ignition in a state when the car is already drowned in water which happens due to careless can lead to engine damages for which you need this particular add on cover. But if you consider a regular the add on is generally of no use to you.

Consumables cover, this may an important add on to look into. Things like engine oil, brake fluid, coolant and minor nuts and bolts which form a large part of any repair cost are generally not covered by the base cover of the policy. So even if you get a claim for repair for accidents all these consumables are to be paid out of one’s own pocket and so this particular add-on cover makes a large to be applied while renewing car insurance policy every time whether done online or offline.

Other than the above add on there are lot of other add cover like Daily garage allowance and accident cover for passenger which any policyholder can apply for but it doesn’t makes sense to wasting money into them. So to make an effective car insurance buying decision, you need to analyze factors like driving habits, cost of your car etc to build the right construct of the policy with the right base cover and the correct add-on.

Effective decision making needs effective comparison between many car insurance plans offered in the market online and then as per need and affordability selects the right one.

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