Things to Consider When Buying Car Insurance
Introduction:
Choosing the right car insurance policy can be a daunting process. There are various different types of insurance that you can protect your vehicle with. But everyone has their own needs. However, some general guidelines to follow when choosing your car insurance should lead you in the right direction. Many car owners purchase car insurance as a formality without thinking about it.
In many cases, choosing a car insurance product is solely based on the cost of the premiums, and this could easily mean you won’t have enough insurance to protect yourself in an accident. In this article, we will go over a number of things to consider before buying your car insurance. Keep reading to get informed.
01. Having third-party insurance is mandatory
A third-party insurance policy is a kind of motor insurance that covers the losses or damages done to the property of any third party during an accident involving your car. For example, if another motorist hits your car and it results in damages, you will be compensated for those damages under this insurance policy.
While the law in India mandates that all cars must be insured against third-party risks, comprehensive insurance is a comparatively new development where an insurer compensates you for losses due to damage or theft of your car from a variety of perils.
02. Know what is covered by third-party car insurance
When buying a third-party insurance policy, you should be clear about what is covered and what isn’t. Typical things you think are covered, like accidents that happen because of fire or floods, may not necessarily be part of the coverage. This is why reading the fine print and understanding your ranges is essential.
Third-Parties car insurance covers damages towards another person’s car or property. Repairing damages to your vehicle incurred due to an accident involving you and other cars or property. Third-party claim towards another person’s car or property. Medical expenses incurred by victims of your accident. Compensation is paid to a victim due to death or disablement caused by an accident in which you are involved. It’s important to remember that insurance may not cover all legal ramifications of an accident. For example, if an accident involves driving under the influence, you may need to consult with DUI lawyers to address the legal charges.
03. Consider the Brand:
Even if you don’t care much about brands, when you bought the four-wheeler, you must have thought about the brand of the car. The insurer’s brand should also be given some thought. Shake hands (virtually!) with the business if you like what it stands for and start a new partnership by insuring your vehicle there.
04. Range of the Cover:
This is one of the important things to consider when buying car insurance. Insurance that covers little under a broad range of risks is good, but insurance wherein you have to be clear about what type of risk you want it to cover is better. It gives you more control over your costs and makes you better aware of what strictly your car insurance will protect you against.
05. Add-on Covers:
If you are in the market for new car insurance, you should consider adding it to your car insurance policy. Adding on covers can be as simple as purchasing a collision insurance policy or upgrading your compulsory third party to comprehensive. Once you have decided which add-on covers you want, it will be time to choose a third-party car insurance policy from your chosen insurer. Each insurance cover has a price offered by the insurer, and you can further add covers.
06. IDV and Premium Relation:
The IDV of a car, also known as the insured declared value, is similar to the car’s current market value. For instance, if the car costs INR 7 lakhs when purchased a year ago due to normal wear and tear, its IDV would be INR 5 lakhs after two years, and it is not the value at resale.
You can choose the IDV of the vehicle to be insured from a list provided by digital insurers. Compared to paying more to insure a car with a higher IDV, you have to pay a relatively lower premium if you choose a lower IDV. This relationship can be expressed as follows: the higher the asset’s value, the higher the insurance premium must be paid.
07. Claim Settlement Ratio and Reviews:
Claim Settlement Ratio is a measure of the adequacy of the insurer’s services in settling claims which is expressed as a percentage of the claim sum. Since it can be challenging to get details of an insurer’s claims settlement ratio, comparing third-party car insurance companies based on customer ratings or checking for reviews online makes sense. This will help you make a choice that best suits your needs.
08. Accumulate the no-claims bonus:
Claims settlements are part of a motorist’s experience with an insurer, which includes purchasing an insurance policy, making a claim to the insurer, and settlement or settlement money. The no-claims bonus is the amount the insurer pays on account of a motor policy that has been with it for three months without making a single claim. Some insurers pay the no-claims compensation based on certain minimum premiums. If you can afford such a premium, it would be worth paying it to get closer to the bonus you want.
09. Dealer-offered Insurance:
The dealer may have an insurance policy that he offers to you. If so, checking the extent of coverage and its terms and conditions before buying it is good. It is easy to compare third-party car insurance with the dealer’s policy once you have gone through the terms and conditions of the policy offered by various motor insurance companies.
10. Don’t forget to ask:
If you decide on a particular car insurance policy before giving a second opinion, don’t hesitate to ask about anything left out from the fine print that can affect your financial future if forgotten. You can get this information from the insurer’s customer care department or comparison websites that display these details in an easy-to-read format for comparison.
Conclusion:
Car insurance is a necessary thing if you are a car owner. If you have considered the above ten things to consider when buying car insurance and still have doubts, check out the market and get your answers there. Go ahead, you have to know the pricing and benefits of each company
