Motor Insurance buying tips and tricks;picture:financebuddha.com

10 Tips to buy Car Insurance in India

Driving is a fairly intricate affair with so many unknown variables functioning in synchronization. In most cases, survivors claim accidents happen because of other’s mistakes on the roads. Nonetheless, accidents do happen, and good insurance is the one thing that can save us from the aftermath more than prayers.

 

Insurance policies can save the day in times of misfortune. They can also save you from the massive hospital bills and accidental repair costs that you might incur. With that said, having some knowledge of the things to look for while buying a good insurance policy, that will take care of you and your loved ones, is a good idea. Specially in a competitive and uninformed market like India, where most people simply buy the cheapest one for the sake of regulations.

 

To help you find a suitable insurance policy for your purpose, here is a list of tips to consider, that can save your day in times of need.

 1. Know Your Requirements

Keep an eye out on your daily needs, like how much do you drive daily, what spot do you park at mostly, how well your car is running and things like that. There are two types of policies for you to pick from, one covers you from only third-party damages and the other covers you from third-party as well as own damages. The latter is the one to be preferred. It would come at a premium compared to the former kind but will provide wide coverage.

Damages covered under an insurance policy;picture:aliainsurance.ae

Damages covered under an insurance policy;picture:aliainsurance.ae

 2. Compare Car Insurance

Always compare the policies before buying one. You may ask an agent to send over multiple policies and their quotes for reference which you could then compare yourself. Else, you could also do so online, using platforms such as Policy Bazar, Coverfox, easy Policy, etc.

Always compare insurance policies;picture:entrackr.com

 3. Using a Car Insurance Calculator

A car insurance calculator can help you get an estimate of the cost of your car insurance policy. It is a tool which requires several inputs regarding the car from the user and formulates a rough cost structure. It will also be beneficial to become aware of some of the common terms related with insurance policies so that you can get the most out of the car insurance calculator.

Some of the common terms are

  • Insured Declared Value (IDV): The approximate value of your car.

  • No Claim Bonus (NCB): A discount for not raising a claim

  • Deductible: Your share of the claim amount

  • Add-on: Additional coverages

  • Third party: A person other than the owner of the car, insurer, or passengers travelling in an insured car.

Use a calculator for better estimates;picture:bajajfinservmarkets.in

Use a calculator for better estimates;picture:bajajfinservmarkets.in

Get the most out of your calculator by understanding common terms;picture:gomechanic.in

 4. Do not make Price the Sole Priority

Cheap policies may look cheesy at first but can leave you in harm’s way after an unfortunate event. You may end up paying more from your own pocket than drawing from your insurance claim. Try to reason out well during comparisons and you can save yourself from being underinsured.

Cheap policies can leave you underinsured;picture:tomorrowmakers.com

Cheap policies can leave you underinsured;picture:tomorrowmakers.com

 5. Sight the Right IDV

Insured Declared Value (IDV) is the approximate market value that your car holds at the time of being insured. Since the user is expected to set the IDV, research well about the going trend of prices for your particular car model and stay within a realistic price range. A very high IDV might make your car insurance policy extremely costly and you might end up paying over the value. The similar applies vice-versa.

Understanding IDV;picture:tomorrowmakers.com

Understanding IDV;picture:tomorrowmakers.com

 6. Select only Relevant Add-Ons

Add-ons help to increase the scope of your cover. For example, Accessories cover can be beneficial if you are installing accessories from outside the company, Passenger cover if you usually drive with a passenger and so on. But you need to stay wise and keep away from unnecessary add-ons as these will ultimately increase the price of your policy. You might also end up buying one with a negligible chance of affecting you.

There are various add-ons available to include in your insurance policy;picture:vectorstock.com

There are various add-ons available to include in your insurance policy;picture:vectorstock.com

 7. Keep your Details Handy

To make the process speedy, keep your details ready with you before starting. You might be done within minutes too in some cases. The idea is that if it is your first time purchasing an insurance policy, you are aware of all the essentials required, and if it is not, keep a copy of the old policy by your side.

keep your details handy;picture:investopedia.com

keep your details handy;picture:investopedia.com

 8. Understanding No-Claim Bonus

No Claim Bonus or NCB can be as high as 50% on the cost of your insurance policy. It is awarded if you do not raise any claim during the policy period. With every subsequent policy within which you do not raise a claim, the insurance company offers a discount on the next premium if you buy from the same company again. 

 

This price can also be locked and bought as an add-on which allows a maximum of two claims. It is a reward for your safe driving from the insurance company.

No Claim Bonus;picture:etmoney.com

No Claim Bonus;picture:etmoney.com

NCB comes as an reward for safe driving;picture:cashcarsbuyer.com

 9. Set the Correct Amount of Deductibles

There are two types of deductibles and by tweaking them, you can either get a higher value of claim or a lower value of premiums. First is the compulsory one, which depends on the engine capacity (CC) of your car. Second is the voluntary one, which you may wish to pay at the time of claim settlement.

Deductible is the amount you pay for any repairs/damages apart from the Insurance company;picture:myinsuranceshark.com

 10. Don't Rush

Stay calm during the buying process and pay attention to each and every detail. Read the terms and conditions related to your purchase carefully, as well as the claim inclusions and exclusions.

Read the terms & conditions of the insurance policy carefully;picture:quora.com

Read the terms & conditions of the insurance policy carefully;picture:quora.com

By law it is mandatory to buy car insurance in India, and to save yourself from a series of misfortunes, it is best that you do buy one. Keep your insurance policy up to date with regular renewals and enjoy No Claim Bonus for your safe driving.

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Autography created by Dhruv Aggarwal

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NCB comes as an reward for safe driving;picture:cashcarsbuyer.com