Have a bike? The chances are you might be paying more insurance than a car.

If you are like most families across India, you are possibly spending an average in excess of INR 52,917.34 rupees per year on your car insurance, according to the Insurance IRDA. While this may not seem like a lot of money to some, it can seem like a huge mountain to climb for others, especially considering the number of people out of work right now.

With so many people getting a pink slips and finding they have nowhere to get a new job, they are looking for ways to make cuts. Some people are actually letting their car insurance policy lapse, in an effort to save money during these tough economic times. While doing that may save you money at the moment, it could cost you much more, farther down the road.

Unless you plan to get rid of your vehicle altogether, nixing the insurance policy is not a good idea. If you continue to drive and are not properly covered, it could lead to a suspension of your registration and license and could put you at risk for lawsuits if you were involved in an accident.

Saving where you can

The good news is that you can keep your insurance and reduce the amount you spend on it at the same time. To save money on your insurance premium, you may need to be more proactive. When was the last time that you shopped around to gather quotes and compare rates? If it has been even six months, you should make a point to do it.

Due to change in our lifestyles, environment changes and pollution, climate changes, auto insurance is a common problem in traveller’s life. When researching rates, keep in mind that you can save money by considering the deductible. Going with a higher one usually makes the rates quite a bit cheaper. You should also ask your insurance carrier what type of discounts they offer and whether you qualify. You may find some incentives available that you didn’t know existed, such as those for being a good driver or having certain safety features on your vehicle.

CIBIL — Make it Happen

Other ways you may lower your rates including informing your insurance company if you have any changes, such as the number of miles you drive per week, or if you move to a new zip code. Keeping your credit score up is also a good way to help reduce your insurance costs. There are ways to save on your rates, but you need to be proactive to make it happen.

Disclaimer

Any opinions and views that are expressed here are purely individual opinions. It is advised to contact your chartered accountant or legal advisor for professional advice. All articles written here are on shared personal experiences of managing personal finances.