Points to Consider When Buying Car Insurance in India
Updated On Oct 15, 2023
Learn different things which you should keep in mind while buying car insurance in India.
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To purchase a car insurance policy is a prudent decision. It helps you comply with legal requirements as well as provide you with a financial cushion against expenses arising due to car repairs. Car insurance has become customer-friendly over the years after many insurers provide insurance within seconds through the website of the insurer or their mobile app. However, while buying car insurance you should keep specific things in mind to finalise the best plan.
Things to Consider While Buying Car Insurance
If you are pondering how to select the most suitable car insurance policy, here are some points which you should look for in an insurance company while purchasing the insurance as these can assist you in the decision-making process:
1. Type of Car Insurance
The first thing you should consider is the type of car insurance offered by an insurance company. If it is providing the basic car insurance policy, i.e., a third party insurance policy as well as a comprehensive insurance policy, it means the company holds the ability to meet your motor insurance requirements. Also, check if the company provides insurance plans based on your car’s type like commercial or private, as without respective policies your demands may not get fulfilled.
2. Insured Declared Value (IDV)
The calculation of a car insurance premium is based on several factors which include IDV. The Insured Declared Value (IDV) is the present market value of a vehicle and also the maximum amount which you are liable to get a claim in case of vehicle theft or total loss. The IDV decreases with the age, which implies that a brand new car will have a higher IDV. Besides, IDV also impacts the premium of the car insurance, so, you should check the IDV offered by your insurer for your car.
3. Insurance Policy Terms
When it comes to car insurance policy terms, you should look for its inclusion and exclusion sections to confirm what it covers and what it does not. A common mistake which insurance buyers is that they go through their policy benefits, but avoid going through the aspects which the policy does not cover. Therefore, ensure to have the understanding of inclusions as well as exclusions of the policy to make an informed insurance-related decision.
4. Add-on Covers
Add-on covers allow you to extend the coverage of your car insurance policy. The add-on covers or riders can be included in the existing policy by paying an additional premium. Hence, before buying a car insurance policy, you should confirm if your insurance provider provides different car insurance add-on covers like roadside assistance, zero depreciation cover, personal accident cover, NCB protection, etc. to help you get the enlarged insurance cover as per your requirement.
5. Discounts and Rewards
Every car insurance company provides some discounts and rewards to its policyholder on fulfilling certain conditions. Among all benefits, the NCB is considered the most beneficial reward which is provided by the insurers to their policyholders for not making any claim in a policy year. With every claim-free year, the NCB accumulates and can go from 20% to a maximum of up to 50% with which you can lower your premium for the next year. Other discounts provided by the insurance companies are for the installation of ARAI approved anti-theft devices, for being a member of the Automobile Association of India, etc.
6. Claim Settlement Ratio
The most crucial aspect of a good insurance policy is the efficiency of claim settlement which is gauged by its Claim Settlement Ratio (CSR). The CSR states the number of insurance policies settled by the company out of all received in a policy year. During the purchase of a car insurance plan, confirm the CSR of the insurance company and ask your insurance company representative about their claims process. It will help you select a reliable insurance company to buy a car insurance plan from.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.