Car Insurance 101 – Beginner’s Guide
Car insurance is the first step in liability after buying a car. Once you’ve decided on the car you want to buy, be sure to consider the different aspects of buying the right car insurance policy.
Here’s a beginner’s guide to help you better understand and take this step with confidence.
What is auto insurance?
Car insurance is where the car owner and the insurance company sign a contract with each other. This agreement allows the owner to protect themselves against any type of loss or damage to the car by agreeing to pay an insurance premium to the insurance company. In return, the insurance company agrees to pay the costs associated with and covered by the particular policy and its terms.
Is car insurance necessary in India?
Yes. The Indian government has made it compulsory for every car owner to carry car insurance in India.
According to the Motor Vehicle Act of 1998, obtaining a motor vehicle insurance policy is mandatory before you can drive on the road. Driving on the roads without a car insurance policy in India is illegal.
In the event of an accident without a valid auto insurance policy, 2 types of lawsuits will be filed against you. One will be the criminal case (for negligent driving). The second will be to obtain the claim that you would have to compensate the family of the deceased.
Two types of car insurance policies:
Third Party Car Insurance Policy: Third party car insurance policy is a basic and compulsory car insurance policy in India. It covers financial losses that occur such as bodily injury and loss to any third party property/vehicle caused by the insured car.
Comprehensive car insurance policy: This type of car insurance policy offers many coverages, including car theft, loss to third party, damage to the vehicle due to accidents, bodily injury or death caused by an accident, damage to the car caused by fire or due to any other natural damage.
How to choose the right car insurance in India?
- Know your auto insurance policy requirement.
- Know your insurer and its credibility in the market.
- Know the key terms used in the insurance industry. For example, insured’s declared value, no-claims premium Compare plans online to choose the most suitable option.
- Full check of policies and terms and conditions to avoid any future tension and shock.
- See the claims process for a better understanding.
- Ask about add-ons and include them in the policy if necessary.
- Know the insurer’s claims settlement rate.
- Buy online for a hassle-free process.
- Easy renewal process available online.
Auto insurance is designed to protect you financially if you are involved in an accident or your vehicle is damaged. Remember to consider deductibles and premiums as well as driving experience and track record when choosing an insurer. Review key terms such as IDV value, no claim bonus, etc. before you dive into the decision to purchase an insurance policy. Be sure to assess your needs and then make the decision that is best for your care.
To learn more about the auto insurance policy offered at Chola MS, click here.