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MOTOR INSURANCE

10 suggestions to consider before taking Car Insurance

 
 
how-to-buy-car-insurance

Buying the right car insurance for your new car can be a tricky situation, if you are unaware about how to make the right choice. According to the Indian Motors Act, it is compulsory for automobile buyers to insure their vehicle during purchase. So what should you keep in mind when looking for an ideal policy for the newly purchased vehicle? Here is all that you should know.

    There are two types of vehicle insurance policies to consider for your car. These are:
  • Third-Party Liability Only Policy:
    This is a mandatory policy that you as a car owner have to take as per the Motor Act of 1988. It must be taken at the time of the automobile’s purchase.
 
  • Comprehensive Coverage Policy:
    This one offers coverage against total loss of the vehicle, own-damages, theft or accident of the car, damaged caused due to act of terrorism/strikes/natural calamities/riots/explosion/lightning/fire.
  • Tips to Get the Perfect Car Insurance:
    Below-given are things to consider when purchasing an automobile insurance.
  • Compare Before You Buy
    Do not settle for the very first option of a car insurance online, but compare before selecting one. Check out the top providers in your area. Who gives a better service? Take feedback from existing customers in the neighbourhood about an insurer. You can compare policies on the basis of coverage, inclusions, exclusions, premium amount, limitations, add-on facilities, optional covers, etc, and choose the one that suits your budget and needs.
  • Know About the Third-Party Insurance
    The primary beneficiary of the policy is the possible outsider member who can get affected by the action of the vehicle owner or the vehicle. The cover extends to legal liability and other financial assistance. It provides cover for damages to third-party’s property, accident, death, bodily injury, total permanent disability, etc.
    Exclusions include claims from contractual liability in case a person other than the owner or specified driver was driving the vehicle, accidental damage/liability/loss outside geographical boundaries than what is specified, liabilities because of warlike operations, nuclear weapons, radioactive contamination, and likes.
    The claim is directly paid to the third-party. Involvement of a lawyer is required. Do remember, insurance premiums will not differ as per the car’s value as it is impossible to understand the possible liability.
  • Compulsory and Voluntary Deductibles
    You have to bear a minimum amount on every claim. This amount you pay is the compulsory deductible. The amount starts from Rs. 500 for a four-wheeler as per the IRDAI rules. You can be charged a higher deductible for an older car with a higher claim-risk. The company can even charge a higher deductible on a car policy for vehicles with bigger cubic capacities or in scenarios when the risk of claim is perceived as huge.
    Voluntary deductible is the one that you decide to pay on your own. You can increase this amount and lower the premium amount. Do note that compulsory deductible unlike voluntary deductible, does not have an effect on the premium amount.
  • Claim Settlement
    You should choose a provider who has a high claim settlement ratio. Claim settlement ratio is calculated as: number of settle claims / number of claims reported + remaining claims at the year’s start – remaining claims at the end of year.
  • Personal Accident Cover
    When looking for car insurance, check for a personal accident cover. It will cover expenses related to you as owner of the vehicle. It can protect against severe financial contingencies due to accidental death from a mishap, accidental dismemberment of limbs, accidental total or partial disability, reimbursement for hospitalization, injuries or death caused due to act of terrorism, etc.
  • Personal Accident Cover
    When looking for car insurance, check for a personal accident cover. It will cover expenses related to you as owner of the vehicle. It can protect against severe financial contingencies due to accidental death from a mishap, accidental dismemberment of limbs, accidental total or partial disability, reimbursement for hospitalization, injuries or death caused due to act of terrorism, etc.
  • Insured Declared Value of the Car
    IDV of a vehicle is the maximum amount you can claim under the policy. This amount is what you can get if your car is stolen or is totally damaged. After subtracting the car’s depreciation value from its selling price as listed by the manufacturer, you arrive at the IDV. Insurance and registration cost are not involved in this calculation.
    IDV of accessories installed by you in the vehicle is calculated separately for an additional cost. A newer car has a higher IDV than an older car of the same model. IDV is hence the current market value of the vehicle. Thus, knowing the Insured Declared Value of the vehicle is important before taking the insurance.
  • In-Network Garages
    Check for the proximity and number of garages in your location when considering a car insurance online company. The greater the network garages closes to your location, the better will be the speed of immediate service required. Ask around your location for the best insurer with high number of in-network garages, to make the right choice.
  • Know About No Claim Bonus
    NCB or No Claim Bonus is an additional discount you get on premiums, if you have not raised a claim for the duration of a year. You are eligible for 5% to 10% of the IDV as bonus on renewing of policies, in such a scenario. This bonus is up to 50% at the maximum.
  • Other Facilities
    Choose a car policy from a provider who gives a cashless option. During emergencies it saves you from the hassles of having to run around arranging cash. Take into account the time taken to issue the policy. Look for customer service and helpline and check if the service is active. In dire situations, you will require the insurer to help you instantly. Thus, quick availability of the provider on communication channels is an important factor to keep in mind when choosing a provider.
  • Car’s Cubic Capacity Matter and Geographical Location
    Depending on where you live, the cost of premium will differ, as the car’s geographical location is considered when calculating the premium. For instance, if you live in a metro city, then the insurance cost for the same model will be higher than if you would have been a resident of a rural or non-metro area. Similarly, the cubic capacity of the vehicle’s engine is also accounted to calculate the premium.
To Conclude:

Out of the several things to consider when buying car insurance, we have mentioned the ones that you should really not avoid. It is always better to take a comprehensive cover along with the mandatory third-party liability policy, so stay better protected. To reduce risks, you can even include a few optional covers such as that for personal accident.

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