If you are reading this article, then you must have a car or going to purchase in the coming time.
As a car owner, it is our duty as well as liability to insure it from unfortunate future events.
People find it difficult to choose between different car insurance policies available in the market because every insurer has its own pros and cons and accumulates all these points, and making a smart decision is a challenging task.
But there are some common factors through which even a non-specialist can compare policies and take the right policy.
In this article, we are going to explain what Car Insurance is?
What are the benefits of taking Car Insurance?
How to choose the best car insurance?
And some general tips that help you to be a smart buyer in Car Insurance.
First of all, you must know what Car Insurance is?
Car insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident, theft, natural/man-made calamity, fire, etc. In exchange for your paying a premium.
Why take car insurance?
As per Motor Vehicle Act 1988, Driving an uninsured car on public roads is illegal in our country. So, if you want to drive your car, you must get it insured under car insurance with at least a third-party cover. Apart from this liability, we must secure and protect your hard-earned asset.
How to choose the best car insurance policy?
There is 26 car insurance company in India. With wide verities of car insurance policies in the market, it is challenging to choose the best car insurance which gives you total cover and also fits in your budget.
In this case, the below-given factors will help you.
Factor to be considered before buying car insurance: –
1. Insured Declared Value
also known as IDV, it is the maximum value you can claim on the theft or total damaged of the vehicle. The car insurance premium is calculated on the basis of IDV, car model, etc. IDV goes on decreasing every year as the age of car increases, which means that a brand-new car has higher IDV than the year-old car of the same model. It is the current market value of the car. You must take care that the insurer gives you a decent IDV while renewing your policy. More IDV means more claims during any mishappening in the future.
2. No Claim Bonus (NCB)
It will help you reduce your premium amount. You can accumulate up to 50% NCB and use it later. Sounds good. One thing to understand with NCB is that it is linked to the policyholder and not to the vehicle. So, you can benefit from your accumulated NCB when you replace your old vehicle or in case you switch to another insurance provider upon renewal of the policy. So, ask your insurer for NCB in both the cases given above.
3. Exclusion factors
Exclusions are specific factors that are not covered under the insurance plan, or in other words, if these situations are found to be breached, the insurer is not liable to pay you damage cover in case of any loss.
Some of the common exclusion points are below: –
- If the policy is not in force, you will not be able to get the cover. That is the reason why timely renewals are necessary. The motor policy is a yearly contract and has to be renewed without a break. In case any damage happens to post the expiry and before the next renewal, the loss won’t be covered.
- In case someone is driving the car under the influence of alcohol or drugs or any other intoxicating substance.
- If the vehicle was being driven by a person without a valid driving license.
- Deliberate accidental loss, which is a loss arising out of an accident or event that was deliberate is also not covered.
- In case of violation of car manufacturer’s guidelines for using a car and related failures or breakages.
Above given are some basic exclusions, it may increase, depend upon the insurer. A big mistake done while purchasing insurance is not considering the conditions that the policy does not cover. Hence, make sure to understand both inclusions as well as exclusions, to make a smart decision.
4. Add-on coverage
Customers should also look for add-on coverages which can protect car owner against any financial loss. In case of any miss happening or any unforeseen event, additional benefits such as consumables, engine protection, zero dep coverage, key and tire protection, and RTI (return to invoice) can be considered.
5. Claim Settlement Ratio
CSR is defined as the percentage of insurance claims settled by an insurer compared to the total number of claims received. It is one of the best measures to compare insurers for their deliverability. An insurance company with bad CSR is not advisable when buying a policy.
6. Network Garages
Car insurance providers have a network of garages, where they provide repairing and servicing facilities in case of a claim. Choose an insurer with a wide range of garages network, which also provides you the facility of cashless claims. It will help you to get claim settlement in a speedy and in an easier way.
7. Quick and Convenient Claim Process
When you go for car insurance, you must consider the insurer with an easy and efficient claim procedure. It would be best if you ask the insurer about the claim settlement procedure before buying it. A simple claim procedure will help to save your precious time.
8. Zero-depreciation cover
Zero depreciation is also known as Nil depreciation or Bumper to Bumper car insurance. In this policy depreciation factor is not included in the cover, you will get complete coverage of the policy in case of damage in an accident, thus it means that if your car gets damaged in an accident no depreciation is subtracted from the coverage of wearing out of any body part of the car excluding, tires and batteries. The insurer will pay out you the entire amount of the body part that was replaced. Isn’t it good?
9. Brand Reputation
The reputation of the policy insurer matters a lot. A well-reputed organization with a stable and reliable background will deliver what they committed and also have low chances to get insolvent in the future. In simple words, you must go through the experience and statistics of the insurer in the market before buying the policy.
10. Consider buying car insurance online
last but not least, considering buy insurance online will save you time and money. It is an easier way to compare insurance from different organizations in one place. With the help of these online portals, you can get informed better and able to take the best policy within your budget.
Apart from these factors, there are some other points like road-side assistance and 24×7 claim assistance also provided nowadays. You can ask your insurer that these benefits are under your policy or not.
That’s all for today’s article. I hope it educates you well.
After going through all these points, I am definitely sure that you can compare car insurance policies in a better way and get maximum cover at a reasonable premium.