Car insurance is a necessity in India, not an option. Under the Motor Vehicle Act of 1988, it is mandatory for all vehicles that run in public places to hold a third-party car insurance policy. Apart from that, if you want to cover your own car, you can opt for a standalone own damage or comprehensive insurance policy. Basically, car insurance also acts as a protective shield to cover the hefty expenses arising out of damages incurred in the event of an accident/theft. You should ensure that it is worth your time and money.
As there are so many insurance companies that offer car insurance in India, choosing the right policy can be challenging. It should perfectly suit your needs, have better after-sales service, and fit your budget. Your hard-earned money must go into a worthwhile investment, and so, if you're planning on buying car insurance, you need to do your homework before you choose both the insurer and the policy.
This article will give you an idea of how to choose the best car insurance policy.
Without further ado, let's get started.
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What Things Should You Keep in Mind While Purchasing a Policy?
In order to make an informed decision, here are some points you should consider -
Understanding Your Needs
You need to figure out your needs and choose a policy that perfectly aligns with your requirements. There are different types of policies in India - Third-party only policy, Comprehensive policy, and Standalone own damage policy. Each one of them serves a different purpose.
- Third-Party Liability Cover
As per the law, it is mandatory for you to own a third-party liability cover. Third-party insurance is a type of motor insurance that covers any loss or damage caused to another person or their property because of your vehicle.
- Standalone Own-Damage Policy
In addition to Third-party insurance, if you want to cover your own vehicle, you can opt for a standalone own-damage policy too. Any kind of loss or damage to your vehicle due to an accident, fire, natural calamity, etc., will be covered.
- Comprehensive Car Insurance Policy
Comprehensive car insurance provides coverage for the losses and damage incurred to both parties in an accident.
Finding Your Perfect Match
After knowing your requirements, look for a policy that matches your needs. There are various websites that allow you to compare insurance plans. You can compare the features and pick the policy best suited to your preferences.
A few important factors to consider when choosing a policy -
- Insured Declared Value(IDV)-
IDV is the approximate market value of your vehicle
- Types Of Add-Ons Available With The Plan-
Adds-ons are additional benefits that can be added to your existing policy on a certain extra cost.
- Cashless Facility -
In the event of an accident, you can avail repair services from your insurance company's network of garages and need not pay for the damages upfront. The repair costs shall be borne by the insurance company. This is known as a cashless facility.
- Exclusions -
Exclusions are certain situations for which the insurance company shall not provide coverage. Make sure you are well-informed of the exclusions of the policy.
Customising Your Plan
Your policy can be tailored to meet your requirements and needs. It is extremely crucial to customise your policy in order to optimise coverage and ensure that your premium falls within your budget. You can also pick add-ons to maximise your coverage.
Here are some add-ons that are generally available with car insurance plans -
- Zero-Depreciation Add-On
As the car gets old, the car’s market value decreases. This decreasing value due to wear and tear is called depreciation. Generally, the depreciated value of the car parts is deducted from the total payable claim amount at the time of claim settlement. This expense can be entirely avoided with a Zero-depreciation add-on.
- Engine Protector Add-On
Typically, a motor insurance policy doesn't cover any damages caused to the engine in case of an accident. With an Engine Protector cover, you will be financially protected against any damage caused to your car's engine.
- No Claim Bonus Protector
A No Claim Bonusis a reward the insurance company gives you for not making a claim in a policy year. With a No Claim Bonus Protector add-on you can retain your NCB, even if you raise a claim in a policy year.
- Roadside Assistance Cover
In the event that your vehicle breaks down or suffers mechanical failure in the middle of the road and you cannot find a mechanic nearby, you can use the Roadside Assistance Cover . This will help you access on-road assistance to fix the damage.
- Personal Accident Cover
If you have sustained serious injuries in an accident, a Personal Accident cover shall offer financial security by bearing your medical expenses.
- Accessories Cover
In case of a mishap or accident, this add-on offers financial protection for your car's accessories, such as the stereo-set, GPS device etc.
- Key And Lock Replacement Cover
This is an add-on coverage that pays for the cost of replacing lost, stolen, or damaged keys or lock-set of your vehicle.
- Consumable Cover
Consumables are components that are easily worn out and require replacement frequently. For example, nuts, bolts etc., are consumables. A comprehensive motor insurance policy does not cover the cost of consumables. With the consumable add-on cover, the cost of the consumables will be borne by the insurance company.
Note: Add-ons will be available only with a comprehensive policy or a standalone own damage policy.
Purchase The Plan
Once you've finalised your policy, you should check all the details and verify them. You should then customise your policy to suit your needs. After completing all of these steps, you can proceed to purchase the policy.
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Things to Remember Before and After Buying the Policy
Provide Correct Information
Ensure that all the details that you have provided to the insurance company are accurate. Any incorrect or false information could cause complications, and even rejection, during the claims process.
Check Your Details
After you receive the policy, it is essential to verify that all the policy details are correct, such as the name of the insurer, the cubic capacity of the vehicle, the registration number, etc.
Choosing the right car insurance policy is essential when you are buying a brand-new car or renewing your existing policy. Compare policies and choose the one that best suits your needs. The next step is to customise the plan according to your requirements and preferences. Finally, make sure you through your policy wordings to avoid any hassles down the road.