What questions should I ask about car insurance?

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Buying your own car comes with a major legal obligation.

According to the Indian Motor Vehicles Act 1988, you must take out a third party car insurance policy for your vehicle if it is to be driven on the road. Buying a comprehensive insurance plan is also a smart way to get instant financial support in case your car is damaged or lost.

However, when purchasing a policy, many factors such as coverages, legal conditions, exclusions, etc. can be confusing for you. It therefore makes sense to understand each political aspect by asking the appropriate questions.

Questions you need to ask before buying car insurance

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Questions to ask when buying auto insurance include:

1. What is the VDI or Insured Declared Value of the policy?

An important factor in your auto insurance is its IDV or Insured Declared Value. IDV is the maximum amount you can expect as reimbursement from the insurer if your car is damaged or stolen. So, be sure to ask this question at the beginning. Remember that the IDV must be equivalent to the current market value of your car. So don’t settle if the IDV is less than that.

2. What is excluded from the auto insurance plan?

In addition to knowing the inclusions of the insurance policy, it is also essential to know the exclusions. In an auto insurance policy, the things that are not covered by the plan are its exclusions. Therefore, claims against them will be rejected. It is therefore essential to understand the exclusions of a policy before buying it.

Here are some general exclusions from an auto insurance policy:

  • Damage due to normal wear and tear is not covered.

  • Damage caused while driving without a valid license is excluded.

  • Manufacturing defects, electrical or mechanical problems of a car are excluded.

  • Damage to the car when driving while intoxicated.

  • Additional exclusions that may be mentioned in the insurance policy.

3. How much to pay to buy a car insurance policy?

Several factors go into choosing the premium, including car model, current market value, type of auto insurance, number of auto insurance supplemental coverages, and more. Therefore, the prices of car insurance policies differ from each other to some extent.

So, when you opt for a car insurance policy, remember to take the help of a car insurance premium calculator before making your decision. This will give you an idea of ​​the estimated cost of this policy. You can access this free online calculator on any auto insurance company website.

4. Is the voluntary deductible substantial?

Deductibles are part of the settlement amount of an auto insurance claim. Since the insurer will bear most of the repair costs, you are only required to pay the deductible amount. Generally, an auto insurance policy has two categories of deductibles, optional and mandatory. You will be able to select the amount of voluntary deductibles. However, the amount of the compulsory deductible remains constant.

5. Is it necessary to take out car insurance every year?

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In car insurance policies, seniority plays an important role, because the validity of this plan depends entirely on it. There are long-term and short-term plans for your choice. According to the laws, it is mandatory for you to take out liability insurance for your car. Choosing a long-term policy will be advantageous as it may come with a reduction in the premium value. However, it depends on your financial capacity.

6. Should I opt for additional cover?

Top-up covers refer to additional insurance protection you can get on top of a standard car insurance policy. You may need to pay an additional fee for this additional coverage. Some examples of additional coverages are roadside assistance coverage, personal accident coverage for passengers, in-station emergency coverage, etc.

Managing your car finances can be quite complicated, and many car buyers consider personal insurance coverage in add-ons when purchasing their insurance policy. You should discuss each additional coverage with your insurer and its scope to understand how they may benefit you. Accordingly, you should choose a font that includes the essential additions and comes at an affordable rate.

7. How should I understand car insurance jargon?

The terms mentioned in any car insurance policy are a bit technical and can be confusing for you. Ask the insurer to clarify them before purchasing the policy. Alternatively, you can also consult the car insurance glossary and check confusing terms associated with car insurance.

To conclude, here are some vital questions you can ask yourself when shopping for a car insurance policy. As a potential buyer opting for this policy, you are suggested to go through its terms and conditions diligently.

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