Parameters to check on when comparing car insurance
Updated On Oct 18, 2023
Parameters to check on when comparing car insurance
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Some things are beyond our control. No matter how hard we try to control what happens around us, mishaps come uninvited. The occurrences can occur anywhere and at any time. Perhaps early in the morning when you are commuting to the office or in the evening while reaching back home. Sometimes, you may get lucky enough to save yourself and your car from any damage. However, on another day, the situation may deteriorate and bring a significant financial burden on you.
Therefore, protection like a car insurance policy that walks beside you will keep you protected financially against third-party damages and any mishap that may happen to your vehicle. In India, over 25 general insurance companies provide motor insurance policies. Different insurance companies provide unique features and benefits to cater to the unique requirements of their customers. Therefore, you should check certain parameters while comparing and choosing the best car insurance for your vehicle. Read on to find them!
What Are the Parameters to Consider While Comparing a Car Insurance Plan?
Here are some factors that you must take into account when comparing car insurance policies offered by different companies.
- Type of Insurance:
While choosing an insurance policy for your car, you must know about the types of policies that are generally offered by all motor insurance companies. The first one is third-party insurance, which is mandatory by law for all vehicle owners. Under this type, the insurance companies provide coverage only for third-party damages. However, a comprehensive car insurance policy offers protection for both, the policyholder and third-party damages.
As a result, when comparing insurance plans, make sure to select one that provides adequate coverage for damages caused to a third party as well as your vehicle.
Another important factor to consider when comparing car insurance policies is the premium. It is the amount paid by the policyholder for insurance on a monthly, quarterly, or yearly basis. While choosing the premium payable amount, you must ensure that it does not become a financial burden for you. You can compare the quotes of different insurance companies and choose the most suitable plan.
- Necessary Add-ons:
You should compare the additional riders and add-ons provided by the car insurance company while choosing an insurance policy for your vehicle. Add-ons are the additional benefits offered by the insurance companies on the base insurance policies. However, you can only choose to buy add-ons under a comprehensive car insurance policy.
- Insured Declared Value (IDV):
Insurance Declared Value is the maximum amount provided by the insurance company to the policyholder in case of theft or any loss or damage to the vehicle. A portion of the premium paid by the policyholder is allocated as IDV. As the vehicle gets older and starts to depreciate, the IDV decreases. Therefore, when choosing a car insurance policy, you must buy one with the right IDV; your premium will depend on it.
- No Claim Bonus (NCB):
Insurance companies provide rewards known as "no claim bonuses" to the policyholders for making no claims throughout the year. When you compare car insurance policies, check if the insurance companies provide a no-claims bonus in the insurance plan.
The NCB remains constant for all the insurers as it is operated by the Insurance Regulatory and Development Authority of India (IRDAI). The NCB discount increases every year if no policy is claimed. You may get up to a 50% discount on the premium if you don’t make any claims for five consecutive years.
- Network Garages:
It is a must to check the number of cashless network garages associated with the car insurance company. In case of any mishap, simply visit these network garages and don’t worry about spending any money on the hefty bills from your own pocket.
- Claim Settlement Ratio:
A claim settlement ratio for the company depicts the number of car insurance claims settled by the insurer during the year. Always look for an insurance company with a higher claim settlement ratio to enjoy a smooth and hassle-free claim settlement process.
Why Is It Important to Compare Car Insurance Policies?
We buy car insurance policies to safeguard ourselves financially if any loss or damage happens to a third party or our vehicle. However, a lack of insurance knowledge can sometimes be financially burdensome. There are a lot of car insurance companies that offer different features and benefits. Therefore, comparing plans offered by different insurance companies will allow you to save the most on premiums and get the best possible coverage.
To sum up, comparing car insurance policies offered by different insurers is as crucial as the comparison done for choosing the best car model. There are various parameters that you should check while comparing the quotes. Also, it has become much easier to compare plans online. You can visit the official website of InsuranceDekho and compare different car insurance plans.
Also read: Does Car Insurance Cover Vehicle Airbags?