Posted on: Jan 5, 2026 | 3 mins | Written by: HDFC ERGO Team

Simple Guide to Lower Car Insurance Premium in 2026

Tips To Lower Your Car Insurance Premium

Driving a car in India is quite a challenge. With increasing traffic, potholes, excessive vehicle volume and other issues, it takes a lot of skill and patience to take your car out for a spin. You may be an excellent driver, but accidents and mishaps are common in India. This is why you need an excellent car insurance plan to keep you and your vehicle safe. However, the cost of a comprehensive policy may be a strain on your budget. The solution, therefore, is to be wise and find some easy ways to lower the car insurance premiums. Read on to learn how it can be done.

Quick tips to lower your car insurance premium

Here are some of the handiest tips on how to lower your car insurance premium:

1. Check for the no-claim bonus

The no-claim bonus is a discount you earn for being a good driver. If you do not make any claims in the policy year, you get a discount on the premium of the following year, which can lower your car insurance price. Here’s a look at the applicable no-claim bonus discounts:

Years No-claim bonus discounts
1 year 20%
2 years 25%
3 years 35%
4 years 45%
5+ years 50%

2. Install safety gadgets

The car insurance policy you have covers the risks of damage or theft. So, if your vehicle is safe, the risk decreases. The insurance provider acknowledges this and offers a discount on the car insurance premium if you have some safety gadgets in your car. Install ABS, anti-theft devices, etc. Not only will your vehicle be safer, but your car insurance quotes will also come down.

3. Choose a sensible deductible

A deductible is the amount you agree to pay at the time of a claim from your own pocket. If you opt for a higher deductible, your insurance premium will be lower. So, if you are confident in your driving skills, opt for a higher deductible. However, be sensible in the calculation, as at the time of need, you should be able to get a sufficient claim amount to help you deal with the losses.

4. Select the correct coverage

If you buy a new car in 2026, you will have to get a comprehensive motor insurance plan. However, do not blindly accept what your dealer provides. Rather, go through the terms and conditions of the policy and see if they work for you. Also, check the trustworthiness of the insurance provider. If you are unhappy with anything, get your policy independently. While doing so, also try to attach a few add-on covers to customise the coverage as per your exact needs. If you have an old vehicle that you wish to replace soon, you may opt for a third-party car insurance plan. Therefore, you must analyse your requirements and get the correct type of coverage and pay the correct price for it.

5. Choose your vehicle properly

The type of vehicle you have also impacts your motor insurance costs. A large, high-end, imported car will be very expensive to cover. A sedan from an Indian manufacturer would be much cheaper. So, choose your vehicle properly. Opt for one that’s practical, usable and suitable for Indian roads.

Questions to ask the insurer

While applying the above-mentioned tips may lower your car insurance quotes, you should also ask your insurance provider the following questions when you buy a motor insurance plan in 2026:

1. “Do you have a policy where the premium depends on how I drive? What details do you record, and how do you calculate the savings?”

The insurance sector in India is shifting gears very rapidly, and new AI-powered technologies are now allowing insurance companies to shift away from the traditional “one-plan-fits-all” approach. They are now offering usage-based options like Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD). These plans use simple driving data, such as how much and how safely you drive, to help decide your personalised insurance premium. Check if your insurance provider has some plans on offer. If you are a good driver, your insurance provider will surely decrease with a PHYD scheme.

2. “If I switch to your online policy, are there any additional web discounts?”

If you have been continuing with the same policy for years, you need to consider changing to an online plan, as they are cheaper. Ask your insurance provider about the prices of the various plans and find a cheaper online car insurance policy.

Factors that impact your motor insurance premium

Here’s a look at some factors that affect your car insurance premium:

Sr. No. FACTOR EFFECT ON PREMIUM
1. Consolidated discounts Many insurers in India, including HDFC Ergo, offer multi-vehicle discounts if you have more than one vehicle insured with them. You can make handy savings by sticking to one insurance provider. For example, you can get a discount of 5% if you buy two motor insurance policies from the same insurer.
2. Lapses Avoid policy lapses. Whether you have a comprehensive or a third party car insurance policy, you must renew on time. If you allow your policy to lapse or get cancelled, you have to pay extra fees and fines, which will increase your overall premium amount.
3. Minor damage claims Avoid making claims for minor damages. Making such claims will diminish your NCB, and you will end up paying a higher premium for the following year’s premium. So, be judicious when making claims, and avoid minor car insurance claims.

To wrap it up

You must use the correct method while buying a comprehensive car insurance policy. Discounts are available, and you must ensure they are applied to your policy. Keep the points mentioned above in mind and approach your insurance provider to find out about additional deals. Grab these deals and drive into 2026 with smart and pocket-friendly motor insurance coverage. Thankfully, there are some excellent car insurance plans available from excellent insurance companies like HDFC Ergo. Do your research, locate the best policy, and buy it at the best price by following the guidelines stated above.


Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.


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