It comes around only once a year but you most likely do not look forward to it. Yes, we’re talking about car insurance renewals! If you are anything like the rest of us, you’re probably wondering if there are ways to get around costly premiums? There certainly are!
Here are five good tips to help lower your car insurance costs:
1. Don’t overinsure
As you might know, one of the ways your car insurance rates are calculated is based on the sum insured. Thus, the higher the amount for which your car is insured, the higher the premium. For instance, if car owner A insures her two-year old Perodua Axia for RM19,000, whereas car owner B insures his (of the same make and model) for RM22,000, he will likely be charged a higher premium in comparison.
Overinsuring, in the context of car insurance, means that you have insured yours for way above its market value. Your insurance company only pays for the damages (in cases of total loss) based on the market value of the car at the time of claim. Thus, insuring your car for more than it is worth is costing you unnecessarily.
So does this mean that you can insure your car for less than it is worth? No again. If you do this, your provider will impose a penalty when you make a claim and pay out even less in compensations. This is why it’s important that you insure your car for an amount that is as close to its market value as possible.
Better still, look for an ‘agreed value’ plan that will pay out based on the sum agreed when the plan was purchased rather than the market value when you claim.
But how do you know if you’ve overinsured your car? One good way to find out is via a valuation report. MyCarInfo provides a rough estimate for your car’s current value. Bear in mind that you can typically insure it for 5%, more or less, than its value. Still, this depends on the figures set by the insurance company.
You should also compare the sum insured to the balance owed on your hire purchase loan and adjust the sum insured to account for the remainder, if you have an ‘agreed value’ plan. Give our car insurance comparison tool a spin below and find out what your car is worth right now.
2. Choose appropriate add-ons
Add-ons to your plan will hike your premium. Some add-ons are practical like a windshield cover that will pay for repairs or replacements (sometimes even re-tinting), without affecting your No-Claim Discount.
Also, if you live in flood-prone zones, a special perils add-on might be worth the money as it covers your car if damaged in landslides, flood or typhoon situations.
On the other hand, there are add-ons that may not apply to your car. For instance, opting for a car accessories add-on when you have not installed upmarket additions to your car could be unnecessary – raising your car insurance rates in the process.
While not impossible, the occurrences of car damages in a strike, riot or civil disturbance are rare in the country, so do consider if the extra premiums are worth it. Moreover, if you don’t often park your car on the street or out in the open overnight, you are less exposed to this type of risk. Still, the decision is yours to make as nobody can accurately predict if a riot is about to break.
3. Practice safe driving habits
As you may know, car insurance premiums are being detariffed. Thus, new products and premiums will be based on market prices which are determined through a number of factors. With the main consideration being the driver’s risk profile, those who are deemed more ‘risky’ might be charged a higher premium.
So what exactly increases your risk profile? For starters, a history of driving offences, excessive claims and even your gender could play a role. But since you can’t do anything about these aspects of your profile, focus on what you can do to improve your position as a car owner and driver.
For instance, do install driver-assistance systems, anti-theft devices, and follow the speed limit. You might even want to consider a telematics insurance plan that monitors driver behaviours and rewards you with a premium discount if you are a safe, conscientious driver. All these actions lessen the likelihood of a claim being made and therefore could lower your risk profile and premiums.
| See also: 5 Malaysian Car Insurance Myths You Need to Ignore |
4. Ask for discounts
If you never ask, you’ll never know! Whether you buy auto insurance through an agent or even when you buy direct, don’t hesitate to ask about potential discounts. For instance, if you have more than one car to renew, ask the insurance companies about the possibility of a discount for a multi-car plan. If you buy with an agent, ask for a loyalty discount.
Another option to try especially when you are renewing your plan with a high sum insured is to check if other costs can be waived or absorbed like the delivery fees, etc.
Also, if you typically buy car insurance from an outside agency like a renewal service, do check with the insurance provider if any discounts on insurance rates will be offered, should you switch and buy direct.
5. Shop and Compare Prices
Since there are plenty of options for you to choose from when it comes to car insurance plans and providers, make sure you shop around before you buy.
Comparing prices, coverage, terms, extras and quality of service will improve your chances of discovering a plan that makes sense for your wallet.
Explore insurance provider websites to learn about the policies on offer or call the insurance companies directly to source for the best plan. You deserve only the best!
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