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  • Finance >> Car Insurance >> Car Insurance Premium >> Car Insurance Premium

    Car Insurance Premium

    Basics of Premium

    Apart from knowing the types of insurance, you need to know the factors, which determine the amount of premium, and tips of reducing the Cost of Premium.

    The insurer first take a note of the make of your car, the model and the year of registration and secondly, your date of birth. Driving history pays a key role in determining the Car Insurance Premium and it also matters that who will drive your car. The precautions you take for the safety and security of your car reduces the rate of premium. Using an alarm or similar alternative equipment is always advisable if you expect a better rate of premium. And of course, the more you cover; the lower is your premium. Checking your mileage and keeping an eye on the extra miles which are not covered saves your money on premium.

    Here are some more tips to save money on your premium

    Cautious driving reduces cases of accidents, and the less you are paid by the insurance company in the case of accidents, lesser will be your premium. However you can lower the probabilities by keeping your car in a locked garage. This will assist you to reduce the premium. It is a known fact that lost of goods often occurs at night and the percentage of thefts is relatively more at night time. So you are advised to lock the garage where you park your car at night. Parking the car on the road again increases the risk so you can choose a better alternative instead.

    Once you have cleared your “practical driving test”, it is advisable to obtain more knowledge through some advanced courses in the field of driving at different circumstances and areas. This enables you to acquire a certificate from concerned authorities and it will enable you with discounts from your insurance company.

    You can even try by limiting the number of drivers on your policy for lesser premium. Limited mileage also pays you.

    Claims play crucial role

    Claim free driving pays you a lot. If you could manage to drive for three years on you car without any claims, you can enjoy a discount of 65% approximately, though it may vary slightly depending on the company. Similarly a two- year claim-free driving may yield you a discount of nearly 40% and for one year you may get a discount of 35%. If you can keep on driving safely on the track, your track record rewards you with ‘no claims discount, which in turn allows you to make two, claims in a three to five year period and some insurers do this even without reducing your bonus.

    Know the documents you receive

    The documents you receive from the insurer are
    1. Certificate of Insurance
    2. Cover Note
    3. The Car Insurance Policy Documents
    4. The policy schedule
    According to the Road Traffic Act, A certificate of Insurance is to be held by every driver. This is also necessary for taxing your car. The cover note precedes the policy certificate of your new Car Insurance. The Car Insurance Policy Document consists the important terms and conditions of the policy and informs the things which are covered and are excluded from the policy. And the policy Schedule contains the operative parts of the policy.

    Therefore, before entering into the policy of a Car Insurance, acquiring the knowledge of basic things enables you to be a clever client.