Points to Consider Before Buying Car Insurance

Buying a car is a big affair in India. A lot of comparison goes at various levels - brand, mileage, colour, features - before finalising that particular car of your choice. However, you might not have observed a similar level of seriousness while purchasing a car insurance, which is mandatory in India for taking your car on the road. A car insurance is a part of the motor insurance that covers the financial loss of the car owner due to accidents, thefts or third-party liability. Before zeroing in on a particular car insurance policy, you should keep certain points in mind. This quick guide will help you understand car insurance better so that you are able to take an informed decision.

1. Opt for a car insurance company that enjoys a high claim settlement ratio. This point will enable a hassle-free, smooth and timely claim settlement otherwise you might end up paying from your own pocket in times of need.

2. There are two types of car insurance policy - comprehensive car insurance and third party car insurance. A comprehensive coverage includes both third party and other accidental and theft claims. However, a third party insurance covers any accident or damage to third party only. Opt for a comprehensive one to provide complete protection to yourself and your family.

3. Be aware of the coverage and exclusions offered by your insurance policy. This will help in gaining the maximum out of your policy or you might miss out the claims for which you can benefit at the time of need. Also the coverage should suit your requirement, else you might be paying for something you don’t require.

4. Insured Declared Value (IDV) is the maximum amount that the insurance company pays for the claims settled by them in case of accidents, theft or loss. The price of the car usually depreciates over time and this is an important factor in deciding the IDV. However, don’t settle for a lower IDV because it reflects in a lower premium amount, otherwise you might end up paying from your pocket at the time of claim settlement.

5. Consider the add-on coverage offered along with the policy. The add-on benefits are additional advantages provided on payment of some extra payment. You should understand them well and opt for them as per your need and requirement. For instance, always get the engine insured to save the repair costs that you might incur during accidents. You can also go for personal accident cover for your family members for everyone’s safety.

6. For cashless claim settlement, you need to visit the network garages of the insurance company. Thus, opt for the insurance company that has a wide range of network garages in order to avoid paying from your side which can turn out to be a burden in times of need.

7. Benefits of availing a No Claim Bonus (NCB) translate into a lower premium amount that you pay. An NCB is the bonus you get on not making any claims in the previous year. Always go for the insurance company that offers NCB with the policy. In case of minor damage or accident, it makes sense to bear the costs yourself and to not make any claims so that you pay a lower premium on your policy.

8. Deductible is the cost of the damage paid by the policy holder. Thus, this is a method of sharing the financial risks coverage with the insurance provider. This helps in lowering the premium amount to a great extent. The deductibles vary for every company. Gain proper guidance on this point, as this affects your premium.

The above mentioned points will help in increasing your awareness about car insurance so that you know what you are opting for. Always renew the insurance policy on time because in India, it is illegal to drive a car without an insurance.

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