How to lower your own damage car insurance premium

Introduction

Every car owner in India must have at least third party car insurance as mandated by the Motor Vehicles Act. However, this only protects against third party liabilities. If you want to protect your own car against damage from accidents, fire, theft, or natural calamities, you need own damage car insurance.

Unfortunately, many people end up paying high own damage premiums without knowing how to reduce them.

This article explains how to lower your own damage car insurance premium without compromising on coverage. You’ll also understand what affects the premium, which add-ons are really needed, and how to make smart decisions as a policyholder.

What Is own damage car insurance?

Own damage insurance is a part of your car insurance policy that covers the cost of repairing or replacing your own vehicle after an accident or damage. It applies to events like:

• Accidents
• Theft
• Fire
• Natural disasters (floods, storms)
• Vandalism

You can buy standalone own damage insurance along with third party insurance, or opt for a comprehensive car insurance policy, which includes both. Understanding the different types of car insurance coverage available is crucial to ensure you are adequately protected.

Major factors that affect your own damage premium

Before you learn how to lower your premium, you should know what causes it to increase in the first place.

1. Insured declared value (IDV)

This is the current market value of your insured car. A higher IDV means a higher premium. Lowering your IDV can reduce the premium, but it also reduces your claim amount.

2. Car’s age and make

New and high-end cars attract higher car insurance cost. Older cars have lower premiums but may not be eligible for some add-ons like zero depreciation cover.

3. Add-on covers

Extras like engine protection cover, roadside assistance, and depreciation cover increase your premium.

4. Claim history

Car insurance claims can significantly impact your future premium, as frequent claims increase your premium and can reduce your No Claim Bonus (NCB).

5. Geographical location

Vehicles in metro cities or accident-prone areas have higher premiums due to greater risk.

6. Type of cover

A comprehensive insurance policy costs more than third party insurance, but it gives you broader coverage including own damage insurance.

Smart ways to lower your own damage car insurance premium

Here are proven strategies to reduce your own damage insurance premiums and still stay protected.

1. Adjust the Insured Declared Value Wisely

Use the right IDV — not too high, not too low. Lowering your IDV slightly can reduce the premium, but don’t undervalue your insured vehicle just to save money.

2. Opt for a Higher Voluntary Deductible

A deductible is the amount you pay during a claim before the insurance company pays the rest. If you choose a higher voluntary deductible, your premium drops.

3. Avoid Unnecessary Add-Ons

Not every vehicle needs every add-on. For example, if your car is old, skip zero depreciation car insurance. If you rarely travel long distances, you may not need roadside assistance.

4. Use a Car Insurance Premium Calculator

Calculate car insurance premium using online tools from HDFC Ergo, ICICI Lombard, and other insurers to ensure accurate premium calculations. Use them to compare and choose the lowest quote.

5. Install ARAI-Approved Anti-Theft Devices

Insurers offer discounts on car insurance premium if your car has certified security devices. This lowers risk and qualifies you for a discount.

6. Claim the No Claim Bonus (NCB)

If you haven’t made any car insurance claim during the policy year, you can get up to 50% discount on your car insurance renewal premiums.

7. Avoid Small Claims

Pay for small repairs out of pocket to keep your NCB intact. This saves more money in the long run by lowering your premium.

8. Choose Long-Term Insurance Plans

Some insurers offer 2–3 year standalone own damage car insurance plans. These often come with reduced per-year premiums and better benefits.

9. Bundle Policies

If you have two wheeler insurance or another car, consider purchasing a car insurance policy online along with your other policies from the same insurance provider. Many companies offer discounts for bundled policies.

10. Drive Safely

A good driving record means fewer claims and can significantly lower car insurance premiums. Some insurers even offer telematics-based pay as you drive policies with lower premiums for safe drivers.

What If you already have a high premium policy?

If your existing car insurance policy is costly, here’s what you can do:

• Switch insurers during renewal. Use comparison tools to find better offers.
• Cancel and buy afresh if you’re not far into your policy and you’ve found a significantly cheaper plan.
• Contact your insurance provider and request to remove unnecessary add-ons or adjust IDV.
• Use loyalty discounts if renewing with the same insurer.

FAQs: Lowering your own damage car insurance premium

What is the fastest way to lower my own damage car insurance premium?

The quickest way is to reduce your IDV, remove unnecessary add-ons, and raise your voluntary deductible.

Can I get discounts for safe driving?

Yes, some insurers offer usage-based or pay as you drive plans with lower premiums for safe or low-mileage drivers.

Should I skip zero depreciation cover to lower premium?

If your car is more than 3–5 years old, skipping zero depreciation car insurance makes sense. For newer vehicles, it’s worth keeping.

Is standalone own damage insurance cheaper than comprehensive?

Yes, but it doesn’t include third party liabilities. You must combine it with third party insurance for legal compliance.

How do I switch insurance companies?

During car insurance renewal, visit an aggregator site, compare prices, and choose a new policy. Renewing car insurance through these platforms simplifies the process, allowing you to switch insurers easily. Provide your previous insurer’s details to transfer NCB.

Final Thoughts

Lowering your own damage car insurance premium is all about being informed and proactive. By understanding how premiums are calculated, using online tools, maintaining a good driving record, and avoiding over-insurance, you can save thousands of rupees each year.

Remember, the goal is not to get the cheapest insurance but the best value for what you pay. Whether you're buying for the first time or looking to renew car insurance, make your decision based on coverage, reliability, and total cost not just the premium.

ARN: Zuno/Blog/DM/How to lower your own damage car insurance premium/04/25/46

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