Finalized your dream car? We are sure you would have researched a lot on brand, model, features, colour and even the accessories but do you know you still must have missed this one important thing related to your car?
Car Insurance policy! Yes it is important to research before buying one and now it’s mandatory too or you will be slapped with a hefty fine.
So, it is essential to dedicate enough time to research the car insurance policy as you did for your car.
Selecting CarInsurance Policy can be confusing;
- What type of insurance to buy?
- What should be the premium?
- What is the procedure?
Here is a complete guide that will help you in buying an insurance policy for your new car
Why buy Car Insurance Policy?
Having a comprehensive car insurance policy provides the car owner coverage for damages caused through a fire, accident, natural calamities, or for a loss like theft, third-party damage.
You can take different add-on like engine protection cover, tyre cover, key replacement cover, paid driver cover, occupants cover, road assistance cover, etc. depending on your need by paying a little more premium.
There are few factors that determine the premium cost of your car.
Types of Car Insurance Policy
Third-party Insurance provides cover for damages caused to third party vehicles. It is mandatory to buy third party car insurance in India to safeguard the damages/financial loss caused to a third party.
The Comprehensive Car Insurance policy provides cover on both third-party liability and damages to your own car.
It is always recommended that you choose Comprehensive Car Insurance coverage that covers almost every circumstance but make sure that you don’t forget to renew it
Comprehensive Insurance Include:-
- Damage caused by natural calamities.
- Damage to the third party
- Damage caused to your car by falling off a tree or heavy objects.
- Destruction of your car caused by riots etc.
Things that are excluded:-
- Wear and tear of the car
- Driving without a valid license.
- Mechanical or electrical breakdown
- Drunk driving case.
- Damage caused because of driving under the influence of drugs.
Who should buy Comprehensive Insurance?
- New Car Owners
- Long Distances Traveller
- People who stay in High-Risk Areas
- Luxury Car Owners
- New Drivers
Click here to read: Benefits and Features of Domestic Travel Insurance
How does Car Insurance work?
The policyholder has to pay a yearly premium in order to keep their car insured every year. In case of any unforeseen events, they can claim coverage amount according to the guidelines of their insurance policy.
NCB in Car Insurance – In case they do not claim they are eligible for an NCB discount during policy renewal which can range from 20% to 50%.
The NCB discount will reduce the cost of a premium during the renewal. For eg: Your first-year premium is 11000 and since you didn’t claim in the policy period. You will be eligible for a 20% discount.
So during renewal, your new premium will be =11000×20/100= 2200
11000-2200 = 8800
Insured Declared Value (IDV)
IDV or Insured Declared Value of the vehicle is the factor on which the car premium will be calculated. The IDV is the market value of your car minus depreciation. It is important to get the correct valuation done as it helps car owners to know the amount that they will be paid during claim settlement. Less valuation means Less amount during the claim process. Want to know more about IDV and how it is calculated? Click here
Car Insurance Claim Process
A car insurance claim is done in 2 ways; cashless and reimbursement.
In case of a car breakdown if a policyholder repairs the car at the insurance company partner’s garage then the insurance company pays directly the expenses, known as a cashless claim.
However, if the policyholder repairs at his preferred garage which is not the partner of the insurance company then the policyholder needs to make the payment first and then can claim in the form of reimbursement.
Note:- All the claims will be done on the basis of sum assured.
Documents needed during claim process:-
- RC copy of the vehicle
- Driving license copy
- FIR copy (in case of theft)
- Original estimate and policy copy
Now when you know the basics; Compare different car insurance plans in order to buy the best car insurance at an affordable price.
Get comprehensive plans from well-known insurers only.