When buying a new car, people consider several factors including its colour, engine, features, mileage, and price. However, another major thing that is to be taken into consideration is an insurance plan for the vehicle. Getting suitable car insurance in India is clearly a wise and smart decision as it provides financial support for expenses incurred towards car repairs in case of accidents or damages.
Car insurance plans have evolved over the years and now come with several important aspects that car buyers need to know before making a purchasing decision. Thus, if you have also purchased a new car and are exploring different insurance plans for your vehicles, here are a few important factors to consider before selecting the insurance plan.
Factors to consider before buying car insurance
Understand your vehicle’s requirements: Not everyone is an expert when it comes to risk assessment of a vehicle. However, one can still explore a few basic risks that can come up with buying a car in India. This will further help with understanding the coverage offered. For example, analyse whether your locality is flood-prone, accident-prone, or if there are instances of car theft in the neighbourhood. In such cases, most of the general insurance companies majorly offer two types of coverage including ‘third-party liability’ and ‘comprehensive coverage’. While a third-party liability policy will compensate the buyer against any third-party accidental liability, comprehensive coverage will protect against damages due to any unanticipated incident like an accident.
Understand the difference between Premium and IDV: While choosing a car insurance policy, buyers often come across terms like Premium and IDV. These may sound confusing but are important to understand before making a choice. While a premium is an amount that buyers pay to the insurance company in exchange for the coverage that it offers, an IDV (Insured Declared Value) is the current market value of the car that the insurance company agrees to pay in full in case of the total loss of the insured car.
Make comparisons: As a beginner, you should gather details of the car insurance company and the plans that you are planning to buy. Always cross-check the different plans of different insurers, make comparisons and know more about the brand before embarking on a new partnership.
Check the Add-on Covers: When buying an insurance plan, dealers often offer a range of add-on covers with the plans, most of which are usually not needed. Buyers need to know that each add-on like engine protection, zero depreciation cover, roadside assistance etc. has its own price, which differs from one insurer to another. Thus, buyers need to diligently make a proper choice while choosing the add-ons.
Check for the state guidelines: When buying car insurance in India, buyers need to check certain additional insurance guidelines. These guidelines differ from one state to another and thus must be taken into consideration before opting for one plan.