A car insurance policy is both mandatory and a necessity. It can back you up financially when you land in an accident. Thus choosing the right insurance policy is impertinent.
While buying a car policy from a dealer might look like the easy way out, taking your time and researching online for the right insurance policy can help you save a lot of money. With many companies vying your attention, choosing the right insurance policy and the right company can be a daunting task.
But here are some basic points that you should be aware of before zeroing in on your next car insurance policy.
- Your requirement and the type of driver you are – First assess what your expectation is out of the insurance policy. Whether you are just looking for a casual policy to follow the mandatory policy, or if you are serious about giving your car the complete protection.
A lot depends on the type of driver you are. If you are just an amateur driver who is prone to nicks and dents, then a comprehensive coverage would be the right policy. If you are a fairly confident driver with a good track record, you can relapse onto a simple third-party insurance policy.
2. Different types of insurance policies – Most insurance companies offer three types of insurance policies.
a) Third-party liability insurance policy– Third-party insurance policy will only cover for third-party liabilities. If your car lands in an accident and causes damage to another person’s life, property or vehicle, then those liabilities will be covered under this policy. This is the minimum mandatory policy that you must have while driving in India. Without a third party insurance, you will be liable to pay a fine of Rs.2000/- and Rs.4000/- for repeated offences. If you cannot pay the fine, you even be imprisoned.
b) Comprehensive insurance policy – Along with the factors mentioned in the third-party policy, a comprehensive policy will also cover damages caused to your own vehicle. Hence this policy offers complete protection to all the parties involved in an accident.
c) Own damage insurance policy – This is a standalone policy which offers cover for damages to your vehicle alone. It does not cover any third-party liabilities. It is often bought in conjunction with third-party insurance policy. It is illegal to drive in India with just this policy alone.
3. The mode of getting the policy – Opt to buy from companies that provide a complete solution to all your insurance-related requirements. Front runners like Digit car insurance are one such example. 24×7 customer service, good claim settlement ratio and a wide network of cashless garages make for a good insurance company. Buying from a reputed company is as important as buying a good policy. Besides, when you buy online, you will get more discounts and perks. It will be cheaper than buying from an agent or a dealer.
4.Setting the right IDV amount – Insured Declared Value is the amount for which you will be insuring your car. When you file a claim, this will be the amount minus a few charges, that you will get from the insurance company. Make sure you set the right IDV amount while buying the insurance policy. Ideally, it should be the market value of the car. The premium you have to pay is directly proportional to the IDV value.
5. The premium payable and whether it is worth the coverage – The premium you have to pay must be justifiable to the coverage you get. Compare the premium vs coverage options with various insurance companies. Be equally wary of companies that offer cheap premium quotes as much as companies that charge exuberant amounts. Read through their offer terms and conditions carefully. When you are in doubt, call up their customer service representative.
6. Choosing the right Add-ons to further extend the coverage – Add-ons are extra features that you can buy along with your insurance policy to extend the scope of coverage. If you feel like the standard insurance policy does not cover certain aspects, you can take the help of these add-ons. Some of the add-ons include Zero Depreciation add-on which ignores the depreciation costs on your vehicle, Return to Invoice add-on which will provide you with the complete invoice amount when your car is completely damaged, Engine and Gearbox protection add-on to protect those parts of your car that are not included in your standard policy, etc.
7. Being aware of No Claim Bonus and its perks- No Claim Bonus (NCB) is the bonus you get for every year that you have passed without filing a claim. An attractive NCB will be another good scale with which you can measure the policy and the company’s reputation. It invariably points to how a company treats its loyal customers.