While insuring your most-valued possession is important, you are often wary of the costs you have to bear without actually claiming anything. It’s a double whammy — you want your possession to be safe, so you would want it insured, but paying the premium without any gain pinches.
Don’t opt for over-insurance
Your insurance company may suggest that you opt for a much wider coverage than you actually require. After all, the company’s business depends on the hefty amount it gets from you in insurance premium. However, in case of any loss, the company will not pay you on the basis of the insured value but on the actual amount of loss. You end up paying a higher amount in premium, without even reaping any actual benefit from it when you go for a heavy insurance cover.
Improve your rating
Insurance companies attach a lot of importance to a person’s credibility. As a buyer, you are in a better position to understand the factors that may cause any damage to the property in future. Keeping the insurer in the dark about such details may have a negative impact on your credibility. In case of any losses, your insurer may act difficult to pay for damages.
Raise your deductibles
The deductible amount in an insurance policy is the amount of loss that you agree to bear yourself, and any loss in excess is passed on to the company. Increasing the deductible lowers the premium you pay, as this liability of the insurer is reduced. For example, if you take a home insurance policy of Rs 50 lakh, with a deductible of Rs 1 lakh, this means any loss within Rs 1 lakh is borne by you; and any loss exceeding that amount will be the responsibility of the company to cover. This deductible component could reduce your insurance premium by up to 20 per cent. However, the deductibles should not be raised to such a level that the insurance becomes meaningless. Maintaining a balance is of great importance.
Keep it secure
To lower security risks, you may install anti-burglary devices, CCTV cameras, infrared sensors, deadbolt locks, metal doors, safe deposits, etc, at your home. As the probability of burglary is reduced by applying these measures, a company will be more willing to insure you and offer rebates. You may build an earthquake-resistant structure and get fire extinguishers installed to avoid other disasters and also reduce the cost of your insurance.
No-claim bonus and other discounts
Insurance companies reward customers who do not make claims by way of a no-claim bonus. Various other discounts can also be availed of by being aware. For example, members of many professional bodies like Medical Council of India, The Institute of Chartered Accountants of India, The Institute of Company Secretaries of India and corporate employees are given discounts by insurance companies. Do ask your insurance agent about the discounts that you may avail of before opting for a policy.
Compare the plans
It is better to shop around for better deals available in the market. The same company can have many plans, some of which could suit your needs better. You may also decide between a public and private insurer for better deals.
Also keep these in mind
- Staying with the same insurer is more rewarding than switching from one insurance company to another every year. Also, it is more economically beneficial if you take the different insurance policies — automobile, health, home, etc — from the same insurance company. Many companies offer discounts if you have multiple policies with them.
- The cost of insurance across different insurers can be easily calculated online by using portals. Applying for insurance policies online also saves money as there is no middleman involved.