A car insurance policy offers you the freedom to drive your car without worry. Not only is this mandatory by the law of India, but it also offers ease of mind. You don’t have to worry about your financial losses in case of theft or accidents, especially if there is a third-party involved.
Finding suitable car insurance requires time and effort. However, this effort is significantly reduced through the online availability of car insurance policies. This can get a little confusing, even when you have the option to compare car insurance quotes.
If it is your first time buying car insurance online, we’re here to help you. Here are the factors you must consider when purchasing an insurance cover for your car:
1. Types of Car Insurance Policies
The first thing you need to decide is what type of car insurance policy interests you. There are three types of Car Insurance Policies:
- Comprehensive Car Insurance Policy: A comprehensive car insurance policy that you can easily buy online comes in a complete end-to-end package for your benefit. It also comes pre-packed with third-party insurance so that you are not legally liable for any losses incurred by the damage of someone else’s vehicle.
- Third-Party Insurance: If your car is involved in an accident which has caused damage to any person or their property/vehicle, you will be legally liable for their losses. Third-party insurance protects you in such situations.
- Pay as You Drive Insurance: The Pay as You Drive Insurance plan offers you the freedom of paying only the premium amount corresponding with the kilometres driven.
The next thing you must decide before looking for a policy is the sum assured. You can decide an amount by calculating your liabilities, your family’s financial strength and especially, your driving habits. You can decide an amount based on your comfort level and speculating a certain level of risk. Do not buy a policy of an unnecessarily large amount since the premiums will correspond to the cover.
Apart from the coverage, a good car insurance policy must possess the following features:
- Insurance Declared Value (IDV): The insurance declared value is the amount the insurance company will pay you in case of a total loss of your vehicle. It is generally calculated by viewing the current market rate of your car. Ensure a high IDV for your car.
- Third-Party Liability Cover: Your insurance provider will offer compensation for any death, injury or damage of property by the insured vehicle to any third party. The Motor Vehicle’s Act of 1988 mandates third-party insurance for every car owner.
- Voluntary Deductibles: A deductible is a part of the amount you pay for the repairs of the insured vehicle. If you are a safe driver, a higher deductible can cut down your premium by almost 30%. You can get a comprehensive car insurance policy without paying higher on your premiums.
- No Claim Bonus: If you don’t make any claims for your vehicle in one year under the insurance, you get a No Claim Bonus (NCB). An NCB is usually a discount on the premium of your subsequent year.
- Add-on Covers: Car insurance policies online are highly customisable. Apart from offering the basic insurance cover for your vehicle and third party, they offer a host of benefits. You can choose these benefits as add-on covers in return of an additional premium amount. Such add-on covers include accessories cover, zero depreciation cover, flat-tyre assistance, and more.
- Network Garages: Insurance companies offering car insurance online have associations with garages all over India. This association enables these garages to offer a cashless experience to you. You can visit any of these network garages and workshops, get your car repaired, and leave without paying a penny. The payment will be settled by the insurance company by itself. So, a good insurance policy must have a wide range of network garages, especially those close to you.
4. Insurance Company
You must not only thoroughly check the policy but also the insurance company offering the car insurance policy. Here are the few things you must look at when doing a background check of the company:
- Claim-Settlement Ratio
- Solvency Ratio
- Market Reputation
Keeping these factors in mind can guarantee a wholesome and effective car insurance policy for your prized possession.