Factors to consider when choosing car insurance


If you’ve recently bought your dream four-wheeler or are in the process of buying one, have you taken the time to think about which car insurance you’ll be going with? Choosing the right car insurance takes as much time and due diligence as choosing the right car. Also, you cannot take your vehicle on Indian roads without a valid and active car insurance. If you are ever caught driving an uninsured vehicle, you will be charged with heavy fines and penalties by the relevant authorities.

When something is so important, it becomes crucial to pay special attention to it. If you’ve started looking for auto insurance, but aren’t sure how to choose the best option, consider the following factors to ensure you get the right insurance for your vehicle.

Also Read: Advantages of Choosing Comprehensive Car Insurance Over Third-Party Coverage

1. Choose the ideal type of car insurance from the list below:

Finding the perfect car insurance starts with understanding your needs. Decide what you want, then choose from the following:

Third-party car insurance:

Third-party auto insurance is the most basic type of insurance that vehicle owners are required to have by law. This insurance protects car owners against financial damage to third party property and third parties in a traffic accident. A disadvantage of liability insurance is that it does not cover damage caused to the owner of the vehicle in a traffic accident.

Also Read: Car Insurance Companies Come to the Rescue of Bhopal Residents and File Claims

Complete car insurance:

If you want better coverage, opt for all-risk car insurance. This insurance covers the contract holder against third-party financial losses and their own damages, providing better coverage and security. You can also improve security by opting for specific add-ons that you think can improve policy coverage.

Car damage insurance:

If you want to cover only the damage caused to you and your car, you should opt for damage auto insurance. Damage Waiver is a personalized auto insurance policy designed to protect you and your insured vehicle against your own damage, primarily damage and loss to your own vehicle. This particular insurance policy also covers damage caused by natural disasters, road accidents, etc.

Even if auto damage insurance is a standalone policy, its features are best utilized when you have liability insurance alongside it. Therefore, it is advisable to have civil liability insurance and then opt for auto damage insurance.

Also read: Driving habits will soon determine your car insurance

2. Check Insured Declared Value (IDV)

A vehicle’s auto insurance premium is heavily influenced by its IDV. For the uninitiated, the Insured Declared Value (IDV) is the current market value of the vehicle. Like other tangible assets, even cars lose value due to natural wear and tear, which ultimately reduces their market value.

Some tend to confuse IDV with the current resale value of the vehicle, so be sure not to fall into this confusion. IDV is just the current market value of the vehicle and not the resale value. When purchasing insurance, digital insurers allow you to select your car’s IDV from a given range. Always remember that the higher the IDV of the car, the higher the premium, and vice versa.

3. Find the complaints process and approval reviews

The very reason for buying car insurance is to get quick and hassle-free assistance from the insurer. You wouldn’t want to go through a complex and time-consuming claims process after encountering an accident. So, before shortlisting any insurance, always check the insurer’s claims procedure and online endorsement reviews.

Genuine reviews from real customers can help you a lot in choosing a reliable insurance partner. You can join Facebook groups, subreddits, forums, or other online communities built around insurance to easily find, connect, and ask questions about the claims process and approval notices from people who have had an association with the particular insurance company.

4. Compare similar policies from other insurers

Once you have defined your needs, you should start researching at least two to three policies from different insurers. The more options you compare, the closer you will get to the ideal font. Fortunately, comparing policies isn’t that difficult. You can search for websites that compare different car insurance plans from various insurance companies or create comprehensive online car insurance plan resources that are enough to help you make a decision.

You can also consider using online insurance premium calculators to figure out how much premium you’ll end up paying for the type of car insurance you choose. These calculators also make policy comparisons easy, so be sure to use them during your research phase.

Also Read: Car Rental Company Hertz Orders 1 Lakh Teslas Worth $4.2 Billion

5. Consult the list of additional modules offered

Add-ons, also called endorsements, are purchased separately to enhance the coverage of a selected policy. While not all policies offered by various insurers have the same options, some of the standard endorsements you may find include:

Ø Zero amortization coverage: An add-on that ensures that the final settlement is calculated on the original value and not on the depreciated value.

Ø Motor protection cover: This surcharge covers engine and gearbox damage caused by oil leakage, water damage, etc.

Ø Roadside Assistance: It helps tremendously when a vehicle breaks down on the road and needs immediate roadside repair assistance.

Ø Consumables Coverage: This jumper covers your car consumables like oil, nuts, bolts, screws, etc.

Ø Back to Invoice Coverage: An add-on that guarantees you get an ex-showroom price of your car and not IDV if it is stolen or damaged beyond repair.

Ø Tire protection cover: This add-on covers your car’s tires against losses resulting from blowouts, cuts, bulges, etc. Tires are not covered by any standard automobile insurance and require separate protection. So if you’re buying car insurance for your own damage, you might want to buy this endorsement along with a few others for better coverage.

Buy only the necessary add-ons, as each add-on will increase your bounty amount.

6. Find out about voluntary deductibles

Once an insurance company approves the filed claim, it pays a significant portion of the claimed amount. The amount of the balance is paid by the insured, which is called a deductible. If you agree to pay a higher deductible, the insurance company may lower your premium. To calculate an approximate amount, you will be able to comfortably pay to cover losses caused by road accidents and offer them a higher deductible accordingly.

seven. Check inclusions and exclusions

Not all four-wheeler insurance policies are created equal, so it’s a good idea to double-check the list of inclusions and exclusions explicitly mentioned in the policy document. For example, just because you get standard auto insurance doesn’t mean it will cover your car tires.

If you want these covered, you will need to purchase an add-on for them. There are several other things that aren’t usually covered by standard car insurance, so it’s best to clearly check what’s covered and what isn’t, rather than assuming it covers everything. This will save you from unpleasant shocks when settling a claim.

8. Choose policies where the premiums are affordable

Don’t choose a policy with a higher premium that you can’t comfortably afford. Use online premium calculators to find an auto insurance policy that offers decent coverage and affordable premiums.

This will ensure you don’t miss a timely premium payment. Even a single delay in premium payment can prevent you from obtaining the benefits of the No Claim bonus and even affect your application for portability of insurance at a later date.

9. Understand insurance terminologies

Before you start looking for auto insurance, familiarize yourself with insurance terminology. It will help you better understand all the auto insurance plans you need to look into, helping you make the right decision.

Some of the terms that you should clearly understand are IDV, deductibles, no claim bonus, etc. A quick search online will show you the full list of insurance terminologies along with their meaning in simple terms for better understanding, so check it out.

If you consider all the factors discussed above when selecting car insurance, your chances of making a mistake will be avoided.

Also read – Advantages of choosing comprehensive car insurance over third-party coverage


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