Finally, you bought the car you had been waiting to get for a long time. Congratulations! The first thing you need to do while buying a car is to finalize the insurance plan for it. However, you cannot settle with the first company you come across. It is important to go through different types of insurance plans and understand which company suits your insurance requirements and the budget the best.
The Big Mistake
Most car owners in India consider buying insurance as a legal formality. They do not give it much thought and their decisions are often based on cost of the premium. They choose the company or plan that offers them the lowest premium. This could mean not having enough protection or cover during an accident or other damages caused to the car. It is important to go online and compare different types of insurance plans not only on the basis of cost but based on all the aspects of a car insurance policy. By being a little careful during insurance purchase, you can enjoy greater benefits.
Checklist to Keep in Mind
You need to go through the given checklist before finalizing a motor insurance plan –
Vehicle Details
The car you have purchased, its cost, model and engine capacity play a very important role in determining the amount of insurance premium. Every insurance company has plans specifically madefor different vehicle models, which you must check before finalizing an insurance company.
A high-end car’s insurance will cost you more as compared to a low-end car model. Similarly, a car with better safety feature is less likely to be part of an accident and hence have low insurance premium.
Types of Insurance
In India, you can choose from one of the two available insurance policies i.e. Third-party Liability or Comprehensive Policy. A third party liability policy provides limited protection and is mandatory for every car owner in India. It protects you against third party liability in case of an accident caused due to your vehicle but it does not provide any damage protection or accident coverage for your own vehicle.
Therefore, for complete coverage of your vehicle, it is recommended to buy a comprehensive policy. The insurance premium in the latter case is higher than the liability-only policy but given the extent of coverage it offers, it is worth it.
Add-ons
If you need additional coverage like Return to Invoice or NCB protection, you will need to buy add-on coverage. Also, analyze your driving patterns and risk profile to decide on add-on cover you may need to buy. For example, if you frequently drive late at night or long distances, a road assistance insurance or maintenance-assist insurance can be very helpful in case of a breakdown mid-way. Similarly, if you have a history of losing keys, a key-replacement add-on will be wise for you.
It is important to note that add-on covers will increase the premium value. Make sure you check all the add-ons you are opting for along with their effect on prices before finalizing the policy.
Insured Declared Value (IDV)
IDV is the maximum amount you can claim for in case of vehicle damage or theft. The value depends upon the market value of the car and it decreases with age, due to the depreciation of the vehicle. When buying car insurance, ensure that the IDV is in accordance with the market value. The value should not be decreased just to lower the premium.
Claim Settlement History
This is more important than it seems. Always opt for a company that has a history of offering smooth, hassle-free and on time claim settlements. After all, that is the main purpose of buying an insurance policy,right?
Online Availability
Now that everything has gone online, it is best to opt for an insurance company that allows online purchase and renewal of policies. This will make it easier and hassle-free to renew the policy on time every year. You won’t have to run around agents and it will lower the premium as well since you save the money on the middle-man.
Bundled Car Insurance
If you have more than one car in your family, you can save money by bundling the insurance plans of all the cars and buying one insurance plan. A bundled car insurance plan offers you hefty discounts and helps you save on the premium amount. It also gives you freedom from buying, maintaining and renewing multiple policies as everything is taken care of in one policy.
The above checklist gives you a detailed view of what is covered in your car insurance plan and how each parameter contributes to deciding the final premium of your Motor Insurance. This checklist will help you decide on a comprehensive plan along with required add-ons for your complete insurance needs. Once you have checked all the above-mentioned points carefully, you are good to go. Make sure you make the payment online or through a cheque. This will serve as a record and come in handy when you claim tax deduction against your car insurance policy.
