As per the new amendments to the car insurance, customers will save insurance premium by taking advantage of the no-claim bonus. The insurance regulatory has introduced discounts based on the policyholder’s driving history as well. If you have not made any claims so far, it indicates that there is less risk in insuring your vehicle. Hence, the insurance company is prone to offer discounts on the premium. The discounts can be availed while renewing the car insurance policy.
Importance of Car Insurance
A car insurance policy will cover various kinds of risk factors. It will protect your car, driver, passengers, and third-party. You should possess a minimum of third-party insurance plan as per the law.
When you buy a car insurance plan you have to pay the premium. However, you can avoid financial stress largely as insurance companies may offer discounts. These discounts depend on various factors, some of which are explained later in this article.
Discount on Renewal Premium
If you maintain a claim-free record for entire policy tenure, you will be eligible for discounts of up to 20% on the renewal premium. This discount is known as ‘No Claim Discount.
Since the ‘No Claim Discount’ is given for one or more claim free years, thus it motivates the drivers to follow the traffic rules and hence it helps in minimizing the road accidents.
Tips to Reduce Your Car Insurance Premium
Apart from ‘No Claim Discount’, there are other tips as well to reduce the premium of your car insurance policy. These tips are:
- Type of Vehicle: The insurance premium is based on the type of vehicle you own. It is based on the make and model of the car. If you are buying an expensive or luxurious sports car, you may have to pay a higher insurance premium.
- Size of the Engine: The insurance premium also depends on the size of the engine of your car. If the size of the engine is large, the insurance premium will also be higher. Hence, you should choose the car and the size of the engine as per your needs.
- Purpose of the Vehicle: The insurance premium is low for the car of personal use. However, if you are using your vehicle for commercial purposes, you have to pay a higher insurance premium.
- Age of the Driver: The age of the driver also influences the insurance premium. If the driver is young, the insurance company perceives that the risk is high; and hence the premium gets higher as well. However, if the driver is more than 30 years, the insurance premium becomes comparatively low.
- Gender: Researches show that women get less involved in severe car accidents. Hence, some insurance companies offer a lower quote for women.
- Location: The risk varies from one location to another location. In some locations, the risk of theft or robbery is high. Hence, insurance companies charge higher insurance premium for such zones.
- Occupation: Insurance companies offer discounts for professionals.
- Driving History: The insurance company has access to your driving history. If you have received a greater number of traffic tickets from the police, your insurance premium increases.
- Disclosure of Driver Information: The insurance company should be aware of the driver’s credentials. If your car is being driven by more than one driver quite frequently, the insurance company may charge a higher premium. If you do not disclose the information about the regular driver, it may show a negative impact on the calculation of insurance premium.
- Driving Experience: Your driving experience has an influence on the insurance premium. If you have driving experience of 2 or more years, the insurance premium gets low. With each claim-free year, your no-claim bonus also increases.
You should be aware of these factors as they have an impact on the insurance premium. By taking measures to safeguard your vehicle and maintaining the vehicle in good condition, you can reduce the premium as well. Similarly, you should manage safe driving habits to get discount from the insurance company in the form of ‘No Claim Discount’.
Factors Which Impact the Insurance Premium Besides Driving Capability:
You should be aware of the factors which influence the insurance premium besides the driving skills of the insured.
- GCC Coverage: If you opt for the GCC coverage, the insurance premium will be high.
- Off-Road Coverage: If you are moving in off-road conditions, you should pay an additional premium to cover off-road conditions as well.
- Roadside Assistance: Roadside assistance is provided by insurance companies as an add-on rider. If you pay an extra premium, the insurance company moves your vehicle from the accident spot to the nearest garage.
Car insurance policy is a must to ride on public roads in Dubai. Hence, you should buy the most appropriate one to protect your interests. If you maintain a safe driving history, you can get discount up to 20% on the insurance premium.