6 Factors to consider while buying a new car insurance in India

In India, most car owners buy a car insurance policy because it is an obligation. People, in general, do not compare car insurance policy and base their buying decision based on the low premium cost. This often leads to having inadequate coverage.

Buying car insurance must be given equal importance to buying a car itself. So, if you own a car, you must be aware of the different aspects of car insurance and compare the different products available in the market before making a purchase decision. If you are a first-time car insurance buyer, understanding the nuances of car insurance will help you get sufficient coverage and enjoy better benefits.

The following tips will significantly help you compare the insurance and make the right choice.

Having third party insurance is mandatory

As per the Indian Motor Vehicles Act and the Indian Road Safety Act, all car owners must have third-party insurance. Driving without valid insurance is a punishable offence, and it may attract a hefty fine. So, make sure that you have an insurance cover every time you drive your car.

Usually, only third-party insurance cover is offered by the car dealer at the time of purchasing a new car. One of the critical things to know about third-party car insurance is that it is basic insurance, and it protects only against the damages that may occur to any third person's vehicle or property, also including bodily injuries, disability and death Irrespective of whether you are driving, any of your family member is driving, or you hired a driver, a third-party insurance policy will only cover claims for the damages caused to the third-party. But, as per the third-party insurance policy norms, you cannot claim coverage for the damages caused to your vehicle.

Look for a comprehensive cover

One of the essential things to look for while you compare car insurance online is to check if the policy is offering comprehensive coverage. A comprehensive car insurance cover provides a wider coverage than the third-party insurance; it covers both third-party liability as well as damages to self. Additionally, a significant advantage of a comprehensive cover is that it provides coverage against man-made and natural disasters like fire, theft, riots, rain, storm, etc.

The premium cost of the comprehensive car insurance may be higher than the third-party insurance, but if you consider the benefits it offers, it would be worth every penny of the premium you pay.

Insured Declared Value

The insured declared value or the IDV is that amount that the insurance company will pay if your car gets damaged beyond any repairs or if your vehicle gets stolen. You must not confuse the IDV as the resale value of your car; it is merely the maximum value of the car (as determined by the insurer) that you get paid in the event of any mishap leading to total loss of the vehicle.

Different insurance companies may offer you different IDV. Before you check the IDV of the car, it is paramount that you evaluate the current market value of the car. While you compare car insurance policy online make sure that you look for an insurer that offers an IDV that is closest to the market value of the car. 

Services offered

While most people choose a car insurance company that provides the lowest premium, you must avoid this mistake. When you are looking for the best car insurance policy, you must also consider the reputation of the insurers and the quality of the services offered.

A reputed insurance company will assure continuous assistance and prompt responses to all your queries and service requests. One of the best ways to understand the quality of services offered is to check the users' reviews. Also, you must look at the claim settlement ratio of the company; it is advisable to buy insurance with a high claim settlement ratio.

No Claim Bonus

No Claim Bonus or NCB is the reward offered by the insurance companies for making no claims during a year. The reward is usually provided in the form of a discount on the premium when you renew the car insurance policy. When you do car insurance comparison, you must check if the insurance company has an NCB program. Also, you must check if the insurance company considers the NCB in their quote.

The NCB discount offered doesn’t vary from one insurance company to the other as it is regulated by IRDAI. NCB increases every year till the time you don’t make a claim. If you don't file a claim for five consecutive years, you can get a NCB discount of up to 50% on the premium.

Additional covers

The add-on covers or the riders are the extra covers that you can purchase over and above the original protection offered by the insurance policy. Most insurance companies in India offer a variety of additional covers to suit the varying needs of the people. You can choose any additional cover you want as per your specific requirements and customise your policy.

Some of the most common additional covers include zero-depreciation cover, roadside assistance, and return to invoice cover. However, not all insurance companies may offer all the cover you need, so while you compare the care insurance policies, look for a company that offers the add-on cover you need.

Today, comparing car insurance quotes is easier than ever before; you can compare the quotes online. You can get quotes from as many companies as you want with just click of a button and choose the best policy and the insurance company that caters to your specific insurance needs.