Most car owners don’t pay as much attention to the car insurance that they are buying when they purchase a new car. Typically, they go to a dealer and select the car they want and purchase the insurance offered by the dealer himself. The mandatory third-party liability requirement is all that they think about and purchase the policy offered by the dealer. However, car insurance is more than just being a legal necessity; it is a safety net for a prized asset – your car. Hence, it is important to choose the best car insurance policy for your four-wheeled friend.
We have also found that most first-time car owners are unaware of what to look for in a car insurance plan. In fact, we have also found many people owning a car insurance policy for years without knowing the benefits it provides. With most insurance companies offering car insurance online, you can compare policies in no time. Also, online car insurance allows you to avail of discounts and buy and renew your policy from the comfort of your home. Today, we are going to share some pointers to help you find the best car insurance plan.
Tip 1. Understand your options
Knowledge is power. Hence, to choose the best car insurance, you need to know about the various types of plans available to you. In India, you can find two primary types of plans:
- Third-party liability coverage – which is made mandatory by the IRDAI and provides cover for any third-party liability. This covers the damage to any person or third-party property due to an accident or a collision caused by your car.
- Comprehensive coverage – which covers third-party as well as own damage. While the third-party liability cover is mandatory, in an accident or a collision, your vehicle could get damaged too. Also, natural disasters like earthquakes, floods, etc. or man-made issues like riots, terrorist activities, etc. can damage your car. A comprehensive plan protects you financially against damages to your vehicle due to such events.
Tip 2. Agree on the optimum Insured Declared Value (IDV)
When you buy car insurance, the insurer determines the value of the car based on which the premium and maximum reimbursement are calculated. This is the IDV of your car. Some dealers recommend car owners to agree on a low IDV to bring the premium amount down and make the policy attractive. However, this also means that in case of an accident, the settlement amount will be very low. On the other hand, a higher IDV would mean a higher premium. Hence, it is important to agree on the optimum IDV of your car.
Tip 3. Choose the coverage based on your needs
When you choose a car insurance plan, ensure that you take your situation and needs into consideration. How and where do you drive your car (or plan to)? Do you have covered parking or an open one? What about your driving capabilities – would you call yourself a safe driver? Are car thefts common in your area? Think about all the risks your car might have to face and buy a comprehensive plan that covers most of these risks.
Tip 4. Research the market
There are many car insurance companies offering different kinds of coverage. To find the best car insurance plan, you need to research the market and look at the options available to you. There are many add-ons that allow you to customize insurance policies to suit your requirements. Compare companies and policies to create a shortlist of policies that can work for you. Next, read reviews on third-party websites and narrow the list down to the one that is cost-efficient and offers all the features you need.
Tip 5. Understand all the add-ons available to you
Leading insurers like Tata AIG offer some of the best add-ons with their car insurance policies:
- No Claim Bonus protection – Most car insurers offer a No Claim Bonus – a discount on the premium if you don’t raise a claim within the policy period. This is an incremental discount and increases with every policy period you don’t raise a claim. Also, the moment you make a claim, the NCB counter resets. With NCB protection, you can make one claim without affecting the incremental NCB.
- Zero Depreciation cover – This add-on makes you eligible for receiving complete reimbursement without the deduction of depreciation.
- Engine Secure – This add-on offers reimbursement for the repair and/or replacement of your car’s engine. This is usually not included in the basic policy.
- Roadside Assistance – Sometimes, your car can break down in the middle of the road due to an issue with the engine, tyre, etc. With this add-on, you can call your insurer and receive roadside assistance at no extra cost.
- Consumable expenses – This add-on helps you receive replenishments for consumables like engine oil, gearbox oil, air conditioner gas, etc., and replacement of parts like clips, washers, nuts, bolts, etc.
For most people, a car is an integral part of the family. Hence, it is important to ensure that if your car meets with an accident, you can take good care of it and don’t hold back for financial reasons. Also, in case of a total loss, you get maximum reimbursement so that you can purchase a new car at the earliest. Follow the tips mentioned above, and buy the best car insurance plan. Good Luck!