Owning a car is a significant responsibility, and car insurance is a crucial part of that responsibility. However, navigating the world of car insurance can often feel overwhelming, with numerous terms and clauses that aren’t always clear. Here are five lesser-known secrets about car insurance that could save you money and trouble in the long run.Five Secrets of Car Insurance

Secret Number 5: The No Claim Bonus Reset

One of the most valuable benefits of car insurance is the no claim bonus, a discount on your premium for not filing any claims. However, if your insurance policy lapses and isn’t renewed in time, you risk losing this bonus. It resets, and you have to start from scratch, which means losing out on potential savings. To avoid this, always ensure your policy is renewed before it expires.

Secret Number 4: Modifications Can Affect Your Premium

Car enthusiasts often enjoy modifying their vehicles, whether for performance or aesthetics. However, any modifications made to your car, whether at the showroom or aftermarket, can increase your insurance premium. Insurers view modifications as risks, and if you haven’t informed them about these changes, any claims made could be denied. It’s crucial to keep your insurance provider updated on any modifications to avoid future complications.

Secret Number 3: The Role of Deductibles

If you find yourself struggling to afford your insurance premiums, consider adjusting your deductible. A deductible is an amount you agree to pay out of pocket before the insurance coverage kicks in. By agreeing to a higher deductible, you can lower your premium costs. However, it’s important to ensure that the deductible amount is something you can afford in the event of an accident.

Secret Number 2: Small Claims Can Cost You More

For minor damages like small scratches, it might be tempting to file a claim. However, doing so can result in the loss of your no claim bonus and potentially increase your premium by up to 50%. Weigh the cost of repairing minor damages out-of-pocket against the potential increase in premiums to see if it’s worth making a claim.

Secret Number 1: Pay As You Drive

A relatively new and lesser-known option is the “Pay As You Drive” feature, especially beneficial for those who drive less frequently. This feature allows you to pay premiums based on the actual mileage you drive. It’s particularly useful in cities like Bangalore, Delhi, Pune, and Bombay, where many people use taxis and drive less. You declare your expected mileage monthly, and the insurer adjusts your premium accordingly, offering potential discounts for lower mileage. This feature is a great way to save money if you’re not a frequent driver.