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Points to Remember About Car Insurance for Beginners

Wish

Written by Sumit Arora

Updated Oct 16, 2023

Beginners must keep a few things in mind to purchase a suitable car insurance policy. Read to know about those points.

Purchasing a car for the first time can be a bit complex for many people. Therefore, it is essential to understand the basics of the insurance sector. Here in this article, we will discuss some points that beginners should keep in mind to find the most suitable car insurance policy.

Points to Remember About Car Insurance for Beginners

Points to Remember About Car Insurance for Beginners

Below are some points following which one can select a good car insurance policy without any hassle:

1. Choose a Suitable Plan 

There are two types of car insurance plans such as third-party and comprehensive car insurance plans. The former is compulsory to own by Indian Motor Tariff, however, the latter is optional that offers different types of coverage and benefits. If you want to pick minimum coverage, you can go for only third-party car insurance, but if you wish to safeguard your car as well, you can opt for a comprehensive plan.

2. Set the IDV Correctly

Insured Declared Value (IDV) refers to the current market value of the car. You need not set an IDV for third-party car insurance but only for a comprehensive policy. If your car gets stolen or meets a major accident that makes it reach a situation beyond repair, the car will be considered to be in a state of ‘total loss’. In such a situation, your insurer will provide you with compensation equals to the IDV amount which you set during the policy purchase. Thus, setting the right IDV is important as higher IDV will increase the premium, while lower IDV will reduce the claim amount.

You may also like to read:- What Happens To Acko Car Insurance When The Policyholder Dies? 

3. Select Right Deductible 

Under car insurance, a deductible refers to a small amount that you have to pay during the claim settlement. There are two types of deductibles available in car insurance such as the compulsory and voluntary deductible. You can select the amount you want to pay at the time of claim settlement under the voluntary deductible. It is believed that selecting a higher deductible is beneficial for safe car drivers but it will also result in a lower claim amount. Hence, set a deductible carefully.

4. Opt for Useful Add-ons

If you have opted for a comprehensive car insurance plan, you can also select some add-on covers to enhance your coverage such as zero depreciation cover, roadside assistance cover, engine protection cover, return to invoice cover, no claim bonus (NCB) cover, etc. You can choose these add-on covers by paying an additional premium, therefore, you are advised to select only those add-on covers that exactly suit your requirements. For instance, if you believe there are very less chance of making a claim, then you can skip buying an NCB Cover.

5. Timely Renew the Plan

Once you have purchased a car insurance plan, you will have to renew it timely to keep it active every time. Generally, a car insurance plan is valid for 1 year, so should renew your policy every year without fail, otherwise, it may become a lapse which will become null and void due to which it would not provide any financial aid to you or the third party. You can also the NCB if you fail to renew the policy in time. To avoid every year renewal process, you can also choose long-term plans that will secure your car without requiring you to renew it every year.

Also Read:- 

Parameters To Consider While Purchasing Car Insurance In India

Conclusion

If you are a beginner at car insurance, these are some basics which you should understand about the concept of car insurance. It will help you find a beneficial policy to safeguard your car. We hope that step by step points mentioned in this article will help you get the best way to find the best policy for you.

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. 

Wish

Written by Sumit Arora

Sumit is an insurance industry veteran with more than 20 years in the industry. Sumit is a frequenRead More

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.

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