Excited about getting your hands on a new car? But, just as important as what’s under its hood, so is to insure it. Learn the benefits of comparing car insurance and some tips for choosing the right coverage.
With the growing traffic density and the steadily rising car ownership costs, insurance has become increasingly important for car buyers in India. Whether buying a new car or renewing your existing car insurance policy, it’s no longer enough to choose the first plan that comes your way.
It’s about finding the ideal fit for your driving style and car, ensuring you’re prepared for anything the road presents. Comparing car insurance across insurers, types, and features is the key to achieving significant savings, better coverage, and peace of mind.
Car Insurance: Basics and Types of Coverage
At its core, car insurance is a contract between the insurance provider and the car owner. Under this contract, which involves a yearly premium, the insurer offers financial coverage to the policyholder in the event of an accident, natural calamity, fire, theft, etc. Basically, the insurance company compensates for any damages to the insured car, its occupants or any third-party liabilities.
Typically, there are two types of car insurance- third-party and comprehensive. Third-party car insurance only offers coverage for third-party liabilities, such as the third-person injury or death or damages to their property. On the other hand, a comprehensive car insurance policy covers both third-party liabilities as well as damages to the insured vehicle. While it is mandatory by Indian motor laws for vehicle owners to insure their cars at least with a third party policy, opting for a comprehensive plan offers a wider coverage.
Why is it Important to Compare Car Insurance?
When it comes to car insurance comparison, the following aspects majorly come into play:
- Policy Premium: The amount you pay annually or monthly
- Coverage Type: Inclusions in the policy (risks and damages covered)
- Add-on Covers: Additional coverage you can opt for, such as Zero Depreciation, 24×7 Roadside Assistance, Engine Protection, etc.
- Claims: Ease & settlement time of claims and customer support
Let’s break these down.
1. Get Best Value for Your Money
If you are buying a car insurance policy, you would surely want the premium to be affordable. While IRDAI regulates the rates of third-party insurance policies, there can be a considerable difference in the premium of comprehensive car insurance policy from two different insurers.
So, by comparing car insurance quotes online, it will be easier for you to pick a policy that offers the best value for your money. It will help you know the discounts offered by different insurers to ultimately help you save a significant amount of money on the purchase.
2. Understand Features and Benefits
A comprehensive insurance policy comes with a host of features and benefits. But they can vary significantly between policies and insurance providers. When you compare motor insurance, you will know the different features and benefits included in different policies.
You can buy a policy that best suits your requirements. For instance, only a few car insurance policies come with coverage for CNG fuel kit. If you do have CNG in your car, you should buy a policy that covers it. Online comparison can help you understand the features of multiple insurance policies enabling you to make an informed buying decision.
3. Know the Inclusions and Exclusions
Irrespective of the type of insurance policy you buy, you must read the policy documents carefully. The policies come with several inclusions and exclusions that could impact your buying decision.
Without understanding the policy in detail, especially the exclusions, you might end up with a policy that does not meet your requirements. With an online four-wheeler insurance comparison, you can find out policies that offer the coverage you want.
4. Pick the Best Add-ons
Add-ons are additional covers that you can purchase along with your car insurance policy. For instance, zero depreciation, 24×7 roadside assistance, engine protection, and NCB protection are some of the popular add-ons.
With the help of these add-ons, you can increase the scope of your car insurance policy. At the time of comparing the policies, you can look for the different types of add-ons available with the policy. You can then easily select a feature-packed, competitively priced policy that also offers add-ons that you think will be helpful to you.
Factors to Consider When Comparing Car Insurance
Keep in mind these aspects while buying insurance for your new car:
1. Decision based on advice from friends and family
Choosing a policy based on advice from family and friends is the easiest thing to do but it could prove detrimental in the long term. Insurance is not a function of a one-size-fits-all approach, because the premium depends on a number of factors such as age of vehicle, place of stay, make & model of the car, etc.
2. Purchasing a policy with the lowest premium
While anyone can get delighted about securing a car insurance policy with low premiums, ideally, it should raise questions; how is the insurer able to offer cover with such a low premium amount? Is the insurer reliable? Often, a low premium amount implies less coverage. So basically, you risk paying more for costs and damages if you don’t go through the policy offering. Hence, to avoid a stressful situation later, you should assess the risks involved and ensure that your policy covers them.
3. Buying the policy offline
In an era of digitalisation, customers stand to benefit the most and this extends to insurance as well. After all, why purchase a policy offline when you can save yourself the effort, paperwork and more importantly, time, by buying car insurance online. Plus it offers great convenience as you can select from a range of online car insurance options and decide the best one to suit your needs, from the comfort of your home or office!
4. Not comparing insurance plans online
While choosing the hassle-free way of buying car insurance online, customers tend to overlook a major advantage that the online medium offers – ease of comparison. Comparing different car insurance plans on offer is critical for making an informed choice. A car insurance calculator further helps to understand the scope of potential costs and several other insurance-related parameters. Plus, it’s easy to use and offers results instantly!
5. Not reviewing the policy documents thoroughly
Putting little effort into reading your policy document ensures that there aren’t any discrepancies when you raise a claim. It’s important to understand the scope of the policy, inclusions & exclusions, and other features. For example, a motor insurance policy will not cover the usual wear & tear, mechanical/electrical breakdown, driving without a valid license, and protection of your legal liability towards your paid driver, etc. Always remember that car insurance is a legal document; being informed will prevent any surprises during the claim in unforeseen incidents.
Tips to Choose the Right Car Insurance Coverage
Here are some tips to help you choose the right type of car insurance policy:
- Review Your Requirements: First things first! Before you buy a four-wheeler insurance policy for your brand new car, carefully review your coverage needs and budget. For instance, if you only want legal & financial protection against third-party liabilities, only invest in a third party policy. But, if you want a wider coverage, you can opt for a comprehensive plan.
- Don’t Rely on Dealers: It is your choice whether you buy car insurance from the showroom or from somewhere else. Dealers might trick you into buying a policy from them by giving you some ‘extra benefits’ that you won’t find elsewhere; which is not true. You can enjoy the same coverage & benefits by purchasing a policy directly from a trusted insurer either online or offline. Alternatively, you can also buy a policy from insurance aggregators like Policybazaar.com.
- Carefully Compare Policies: When you look for car insurance options online, you get to compare plans offered by different insurers based on different parameters. For example, when you choose to opt for Policybazaar car insurance, you can select from 20+ car insurance companies, compare their features, premiums, as well as add-on covers, and then make a choice.
- Check Insurer’s Reviews: Amongst the critical steps while choosing the right car insurance coverage is knowing the insurer’s credibility, for which one of the easiest ways is to check its CSR (claim settlement ratio). A higher CSR indicates they have settled a higher amount of claims in a year. Typically, more than 90% CSR is beneficial. Besides, the number of network garages, cashless claim facilities, and discounts offered are other criteria to decide the insurer.
- Choose Add-ons Wisely: Car insurance add-ons enhance the coverage of your policy but they come with an extra premium amount. Since not all the add-on covers are necessary, you must only choose the ones that your new car really requires.
In a Nutshell
With cars becoming more expensive and technologically advanced, insurance companies must adapt. The gap between a good and great policy could lead to significant savings or a much smoother recovery from an accident. Hence, when the next time your renewal date arrives, don’t just renew your policy. Take good time to compare different car insurance plans. Your car—and your wallet—will thank you.
