5 Ways to save money on general insurance

Purchasing insurance is meant to provide financial protection against unexpected events. However, the premiums can add up, especially when you have multiple general insurance policies like health, motor, travel, etc. While you want sufficient coverage, saving some money is also essential.

In this blog post, we’ll explore some practical tips for lowering general insurance premiums in India without compromising on policy benefits.

Do Your Research and Compare Plans

The first step is understanding the different types of general insurance plans available and analysing what best fits your needs and budget. With so many insurance providers, and policies to choose from, you should:

Buy Directly from Insurers

Purchasing an insurance policy directly from the insurance provider, either online or through their branch operations, can save you 20-30% in commissions that would otherwise be paid to an insurance agent or advisor. Most insurers today, like ACKO General Insurance, offer the option to purchase or renew policies online, offer customer support over the phone or email, and have minimalistic branch infrastructure to reduce their own costs and pass on the benefit with lower premiums for direct customers.

Maintain Loyalty to One Strong Insurer

Most insurers provide loyalty additions of 5-15% discounts once you have given them a certain number of years of risk-free business. Staying invested with one insurer for the long term pays off compared to chasing incremental discounts from insurers, hopping annually.

Pay Premiums Annually or Half-Yearly

General insurance policies provide the flexibility of paying premiums monthly, quarterly, half-yearly or as a one-time annual payment. Opting for half-yearly or annual premium payments reduces the insurer’s administrative costs of frequent reminders/receivables. Hence, most insurers provide a 5-10% discount when customers pay the entire annual premium upfront compared to monthly instalments.

Increase Voluntary Deductibles

You can bear a deductible before the insurer’s policy payments kick in. Voluntarily choosing a higher deductible lowers the premium outgo. For instance, increasing your health insurance deductible from ₹10,000 to ₹30,000 can reduce the premium by 30-40%. This trade-off makes sense for a young, healthy person who doesn’t expect regular claims.

Avoid Small Claims

Health policies typically have a claim settlement process involving some paperwork and subjecting yourself to medical tests. Instead of claiming insurance for minor expenses like coughs/colds or outpatient expenses, pay out of pocket if you can afford it. Similarly, for motor insurance, avoid claiming for minor damages and dents that have not hampered vehicle functionality. This helps retain your No Claim Bonus, which gives hefty discounts on renewals. The loss of NCB can spike premiums significantly.

Monitor Loyalty Discounts over Time

Review the discounts received from account persistency; no claims made add up and remain consistent yearly. Sometimes, loyalty rewards seem lucrative initially but don’t stack up over more extended periods. Run a quick comparison at renewal against newer policies in the market. Switching may be prudent if newer plans provide better features at lower costs despite losing accrued loyalty benefits with the existing insurer.

Conclusion

Saving on general insurance premiums requires some strategic planning and intelligent choices. Still, optimal value can be derived from research, financial discipline, and loyalty benefits. Applying a combination of the above tips is advisable to make adept insurance decisions for yourself and your loved ones. Ensure you secure your finances against unforeseen events at optimal costs.