Car Insurance. Like it or not, it’s a necessity if you want to retain your privilege to drive. Yes, it’s not always cheap, especially if you’re a new driver, but what you get in return is peace of mind, not just when you’re driving, but also when you leave your beloved motor parked in the garage or a public parking space. However, car insurance needn’t necessarily be as expensive if you know these insider tricks. Here are our six tips that will help you cut premium costs notably.


1. Shop around

Buying an insurance policy is pretty much like any other purchase. Premiums and associated costs and benefits vary, sometimes considerably from company to company. So, just as with any other purchase, it makes sense to shop around for better deals. Always get multiple price quotes. Once you get a quote from a couple of companies, use this information to bargain with other providers, and find the best deal.

Our colleague from wheels Arabic, Kinan Alhabbal, did this and saved more than 30 per cent on his annual premium last week. “The most important thing to do is search for different options, which will get you not only better price, but also better insurance,” says Kinan. “If I took the first offer from my previous insurance company, I would have paid Dh2,350, but shopping around and talking to different agents got me a huge discount and I only paid Dh1,600.”

It also pays to check with your employer whether they have corporate schemes, and with your bank to see if they can get you competitive rates. Alternatively, you can also approach an insurance broker, who will be able to give you an array of quotes from different insurance providers.


2. Keep a clean record and avail NCD

If you aren’t a safe driver already, here’s an added reason to be one. Maintaining a clean driving record can get you a considerably cheaper premium when you renew your policy. If your records for the year show that you haven’t made any claims for what’s called ‘own damage’ in insurance parlance, then you’re eligible for a No Claims Discount (NCD). “If you’re sticking with the same insurer, they will have the records, but if you plan to switch to a new provider, then ask your current insurer to issue a No Claims Certificate,” says Fawaz Ebrahim, business development manager with Gargash Insurance. “Most of them will provide this free of charge, while a few might charge a nominal fee.”


3. Multiple vehicles discount

Most residents in the UAE have more than one car in the family. For those with multiple vehicles registered under the same name, it makes sense to stick to one insurance provider for all the vehicles, as they will give you a discount on all the premiums. If they don’t offer it voluntarily, ask for it by giving them the reference number of your existing policy. If they’re not willing to provide such a discount, approach a broker, which will be able to give you a discount even if different vehicles are insured with different providers.


4. Consider raising the deductibles

The deductible or the excess is the amount you’re liable to pay in the event of an accidental damage caused to your vehicle by your own mistake, or ‘unknown damage’ caused by an unidentified third party. In other words, it’s an amount the insurance company will deduct from you before it releases the claim payment. Usually these are fixed amounts that an insurer imposes as a deterrent against a large number of small claims arising. However, if you are willing to voluntarily raise this deductible amount, most insurance providers will reduce your annual premium significantly. And if you’re a safe driver and don’t have a crashy record, then this shouldn’t really affect you and would only help you save on your annual premium.


5. Avoid unnecessary extras

Your insurance policies usually come with a number of extras like access to a rental car while your own car is being repaired for accidental damage, coverage in territory other than your country of residence, and other add-ons like roadside assistance and off-road coverage. The fact is very few customers will ever use any of these additional features. For example those with a soft-roader which they never intend to take off the tarmac should never get an off-road cover. Or those with multiple cars at home needn’t opt for a rental car. Avoiding these optional extras can also make a noticeable difference in your total premium payment.


6. Keep your car’s value low

Agreeing to show the value of your car lower than its actual market value could get you a good discount on the annual premium. In fact, our man Kinan got his whopping 31 per cent discount by just agreeing to reduce the value of his car. “The previous insurance company had pegged my car’s value at Dh58,000, however, I did some research and found that the actual market value of my car was only Dh50,000. So I asked the agent to get me another quote with my car’s value reduced to Dh51,000,and I got a significant discount,” says Kinan.

However, this is one point that seems to have advantages and disadvantages, and it’s a decision that should be taken after serious consideration. Those in the industry don’t recommend this though. “We always advice our customers not to use this method to reduce premiums. We recommend keeping depreciation in the 20 per cent range always, because if something happens and the car is a total loss, then the payout will be based on this," says Fawaz. “It’s strongly recommended that vehicle value in policy should be on a par with the market value and bringing down the value to save premium also might trigger under insurance clause where in average will be applied during total loss settlement,” he adds.