Car insurance for newbies might seem an intimidating choice. With a plethora of options, it can be a perplexing decision to make. Moreover, being a first-time buyer, you have little to no experience of what might be the right coverage to look for. This article is your go-to help of what you should check when buying a car insurance policy.
Table of Contents
#1 Selection of a plan that suits your needs
Car insurance can be purchased in either of the two types – third-party or comprehensive. While the former is the minimum requirement by the regulator, the Insurance Regulatory and Development Authority of India (IRDAI), the latter one is an optional upgrade for you to choose. Both these policies can be purchased online. Whether you purchase third party car insurance online or offline, the premiums are regulated by the IRDAI and are predetermined. For a comprehensive plan, the third-party component is fixed whereas the cost of coverage for own-damage as well as personal accident cover is determined by the insurance company. Note these premiums differ among insurers and must be selected after evaluating the coverage and its affordability.
#2 Setting the right IDV
A comprehensive car insurance policy gives you the option to set the insured declared value or IDV for your vehicle within a particular range. It is the closest estimate of the current value of your car. Although this value isn’t the resale value, it acts as a reference point. For any unfortunate mishap that causes a damage to your car beyond repair can be claimed under your insurance cover. The insurer will pay an amount equal to the IDV. Thus, it becomes crucial to set the right IDV to be prepared for these circumstances.
#3 Choosing the deductible wisely
A deductible is an amount that you, the policyholder, are required to pay at the time of claim. There are two kinds of deductible, standard and voluntary. The standard deductible is a form of compulsory deductible that is required to be paid at each insurance claim. On the other hand, a voluntary deductible is optional and can be selected to reduce the premium amount. But remember that the lower the premium due to deductibles, the lower shall be its payout at the time of claim. Thus, it should be carefully set after considering the insurance payout and the premium.
#4 Selecting only useful add-ons
A comprehensive insurance comes with the option of selecting add-on coverage options. Some popular add-ons are zero depreciation cover, return to invoice cover, passenger cover, engine protection cover, NCB protector cover, etc. While it becomes confusing to select the right add-on, it is essential to choose only the useful ones since more add-ons mean a higher premium. A car insurance premium calculator can help you decide between them so that you get adequate coverage at the same time staying within your budget.
#5 Timely renewal to avail NCB benefits
Buying a car insurance policy is not the only thing that you need to remember, but also its timely renewal. Hence, keep an eye for the due date and renew it well in advance because a break in policy coverage could mean loss of policy benefits. Further, a break longer than 90 days after the due date could also lead to loss of no-claim benefits. It results in the premium to be reinstated to its original amount instead of the no claim concessions.
These are some of the basic tips that first-time buyers can remember to get the most of their insurance coverage. Make sure to familiarise yourself with the terms of the policy so that there are no unwanted surprises at the time of car insurance claim.
