An SUV is an excellent car designed to provide the ultimate travel comfort for both families and heavy-duty passengers. It enables bigger families to travel with more comfort and minimum risks of any untoward incidents and allows heavy-duty travellers to off-road when their travel plans demand it. While an SUV indicates safety and convenience for bigger families, it brings to the surface the need to buy an equally good vehicle insurance policy that covers most of the requirements. The rise in inflation has led to an increase in the car insurance premium rates. If you own an SUV, and are wondering how to lower your car insurance costs, this article is for you. To slowly bring down SUV car insurance premium rates, you must have the knowledge of what factors affect the premium rates. This article lists those factors and a few tips to follow to help you save on your car insurance costs.
Understanding Insurance Premiums
Car insurance premiums are influenced by several factors which include the vehicle’s make and model, your driving history and the coverage option selected at the time of purchase.
In India, the average car insurance premium ranges from ₹7,000 to ₹15,000 annually, depending on the vehicle’s value and coverage type. For SUVs, this can be on the higher end due to their increased value and repair costs. This is why it is important to reduce SUV insurance premium as lower car insurance costs can lead to significant savings. In order to manage your SUV insurance premium cost, understanding some key strategies can help you navigate the SUV insurance landscape efficiently.
Factors That Impact SUV Insurance Premium
Before creating cost-reduction strategies, one must learn about the factors that majorly influence the SUV premium. Understanding these factors will help you plan your insurance premium payment, saving a considerable amount of money in the process. The following are some of the key factors that can have a significant impact on SUV insurance premium.
Insured Declared Value (IDV)
IDV or Insured Declared Value impacts your SUV insurance premium as larger SUVs cost more than medium and smaller ones. IDV refers to the market value of the vehicle. Since bigger SUVs cost more, their insured value will be more which drives the insurance premium rates to the higher end.
Engine capacity
The Cubic Capacity or CC of an engine influences an SUV’s insurance cost. The bigger the engine, the higher the insurance premium costs. Hence, premiums for larger SUVs will be on the higher end of the pricing spectrum.
Vehicle size
Your SUV’s size also matters when it comes to determining the insurance premium cost. As the engines in bigger SUVs have higher CCs, the premium rates will be higher.
Car make and model
In today’s market, SUVs of different companies come in a variety of shapes and sizes. If your SUV is a luxury brand like Mercedez Benz or BMW, the cost of repairing the car/replacing their spare parts is also high due to their exclusivity. This impacts the insurance premium rates. The insurance coverage for high end cars require higher premiums.
Fuel type
Petrol or Diesel cars fetch a lesser insurance premium as compared to CNG-fitted cars as CNG-fitted SUVs need extra equipment. Any addition to the original car structure has to be insured at an added cost.
Year of manufacture
Your SUV’s year of manufacture plays an important role in determining the insurance cost. Older cars fetch lesser insurance premiums.
Geographical location
Cities have a higher traffic density which indicates that the chances of minor and major road accidents are higher. So if you live in metro city like Mumbai or Bangalore, the car insurance premium will be higher than for those who live in a Tier 4 area.
Safety features
Cars that have additional electronic features like anti-theft devices that keep the car from being subject to theft or vandalism can get really good discounts on their insurance premium payments.
Key Strategies to Reduce Your SUV Insurance Premium
Your SUV insurance premium payment can hang like a sword over your neck every month, if you are not careful enough to efficiently plan your monthly spends. Understanding the key factors that influence your SUV insurance premium payment can help you reduce your premium expenses substantially.
1. Compare Insurance Plans
The most effective way to lower your insurance premium is by comparing different insurance plans online. The Indian insurance market offers a plethora of options, and premiums vary from one insurance company to another. Online car insurance aggregators have done a tremendous job of bridging the gap between prospective insurance beneficiaries and insurers. Using online comparison tools like the one on InsuranceDekho can help you evaluate the various car insurance plans based on coverage, benefits, and costs. Research indicates that consumers can save up to 30% on their premiums by switching providers after comparing plans. Premium calculators on these websites enable you to have a thorough understanding of how much you may have to spend monthly on car insurance premium payments.
2. Install Safety Devices
Installing safety features such as anti-theft devices or GPS tracking systems can significantly reduce your premium. Insurers often provide discounts for vehicles equipped with these safety features because they lower the risk of theft and accidents. Industry statistics point that you can save 5-15% of your money on SUV insurance premium payments when you install anti-theft accessories in your SUV. So if you are rethinking getting those advance anti-theft alarms installed, don’t. Because doing so can save you a significant amount every year.
3. Opt for Higher Voluntary Deductibles
A deductible is the amount you agree to pay out-of-pocket before your insurance kicks in. By opting for a higher voluntary deductible, you can lower your premium significantly. For instance, increasing your deductible from ₹2,000 to ₹5,000 could reduce your premium by 10-20%. However, ensure that you are comfortable with this amount in case of a claim.
4. Maintain a Clean Driving Record
Your driving history matters a lot in helping insurance companies decide whether you are eligible to own their car insurance policy. Insurance companies reward safe drivers with lower premium rates. According to statistics, drivers who do not claim their insurance and zero traffic violation records for over three years can save up to 25% on their premiums due to their clean record. Regularly following traffic rules and avoiding accidents not only keeps you safe but also keeps your insurance costs down.
5. Take Advantage of No Claim Bonus (NCB)
The No Claim Bonus is a discount offered by insurers for each year you do not make a claim. When you do not claim your insurance, it indicates that you have taken sufficient care of your vehicle to avoid requesting a reimbursement. This invites a no-claim bonus. This bonus can accumulate over time and lead to substantial savings on your premium—up to 50% after five claim-free years. When you claim insurance for any minor repair or parts replacement, it indicates that you are not a reliable car owner. Hence, it is essential to avoid making small claims that could jeopardize this benefit.
6. Renew Your Policy on Time
There cannot be enough stress on the need to renew your car insurance policy regularly and accurately to get an insurance premium discount. Timely renewal indicates that you are serious about owning a car insurance. It is a symbol of your loyalty towards the insurance company, a sign of your integrity as a customer. Missing the renewal deadline may result in higher premiums when you try to renew later due to lapses in coverage or loss of NCB benefits. Setting reminders or opting for auto-renewal options can help ensure that you never miss a renewal date.
7. Avoid Unnecessary Modifications
While customizing your SUV may enhance its aesthetics or performance, it can also increase its value and subsequently raise your premium. Any changes introduced in the car invite additional expenses for insurance companies in case of any untoward accidents in the future. Insurers typically charge higher premiums for modified vehicles because they are considered higher risk. Stick to modifications that won’t affect the vehicle’s market value greatly.
8. Join Automobile Associations
Membership in automobile associations like the Automobile Association of India (AAI) can provide additional discounts on insurance premiums. When you are a member of such organizations, it creates the impression that you are a sincere citizen who values their right to drive on the streets and understands their responsibilities well. Being part of such prestigious organizations indicates the quality of a possible beneficiary’s character, thus making it easier for companies to decide whether you are an eligible candidate. Joining such associations not only helps in reducing costs but also offers additional benefits like roadside assistance.
9. Choose Third-Party Insurance for Older SUVs
If you have a pre-owned SUV, their market value is less as compared to new cars. In this case, you can opt for car insurance that include third-party coverage. This can fetch you lesser insurance premium. For older SUVs that may not have significant market value, consider opting for third-party liability insurance instead of comprehensive coverage. Third-party policies are generally much cheaper and cover liabilities arising from accidents involving other vehicles or property. This option is particularly useful if your SUV’s comprehensive coverage insurance policy cost is higher than the benefits.
Conclusion
Insurance premium is a major expense. In order to find the ways to reduce the amount, you must understand what factors truly influence your car insurance premium rates. The recent technological advancements have enabled today’s population to compare and understand these factors and make data-driven decisions before buying a car insurance policy. By being informed and taking advantage of available resources and discounts, you can enjoy peace of mind on the road without breaking the bank on insurance premiums.
