Buying your first car is an exciting milestone, but it also brings a lot of responsibility. You must take care of your car’s maintenance, fuel, and safety. One of the most crucial tasks is to purchase a car insurance plan. Car insurance is a legal requirement in India, according to the Motor Vehicle Act of 1988. It safeguards you from financial losses in case of unfortunate incidents on the road. But before you buy a new car insurance policy, there are certain aspects you should be well aware of – coverage, inclusions, exclusions, the premium, etc.
So how do you select the right car insurance plan for your first car? There are several factors to consider, and we will discuss them in this blog.
Key Considerations Before Buying New Car Insurance
So, you are set to buy your new car insurance plan. Here are some tips to consider before you make the buy –
Know the Car Insurance Types
There are three types of car insurance policies available in India:
- Third-party liability cover: This is the mandatory type of car insurance plan that covers the damages caused to other vehicles, people, or property by your car. It does not cover any damages to your vehicle. IRDAI fixes the premium for third-party car insurance policy based on your car’s engine capacity.
- Standalone own-damage insurance: This optional insurance covers the damages caused due to accidents, theft, fire, natural calamities, etc. It does not cover any third-party liability. The premium for this type of policy depends on various factors such as the car’s make and model, age and condition, and the location and usage of your vehicle.
- Comprehensive insurance: This is the most recommended policy covering third-party liability and own damage. It offers you and your car complete protection in case of any mishap. The premium for this type of policy is the sum of the third-party liability and own-damage insurance costs.
Compare Plans Online
When buying a car insurance plan, checking out different plans from various companies online is a good idea. Use insurance aggregator websites to see and compare what each plan offers – like what’s covered, what’s not, and how much it costs. You can also read what other customers say about the companies to see if they are good with their services and settling claims.
Choose the Right Coverage
The coverage you get from your car insurance plan depends on the type of policy you pick and the add-ons or riders you choose. Add-ons are additional features that enhance your policy coverage for a nominal extra premium. Some common add-ons are:
- Zero depreciation cover: This add-on covers the total cost of repairing or replacing parts of your car without deducting any depreciation value. Usually, insurers deduct a certain percentage of depreciation from the claim amount based on the age and condition of your vehicle.
- Roadside assistance cover: This add-on provides emergency services such as towing, fuel delivery, battery jumpstart, flat tyre change, etc., in case your car breaks down or meets with an accident on the road. It saves you from inconvenience and stress in such situations.
- Engine protect cover: This add-on covers the damages caused to your engine due to water ingress, oil leakage, or mechanical breakdown. These damages are not covered under a standard car insurance policy.
- Return to invoice cover: This add-on covers the difference between the invoice value (the original price paid by you) and the insured declared value (the current market value) of your car in case of total loss or theft. Typically, insurers pay only the insured declared value in such cases.
Choose the coverage and add-ons that suit your needs and budget. You should not over-insure or under-insure your car as it may lead to unnecessary expenses or insufficient protection.
Check Policy Exclusions
While buying a new car insurance policy, you should also be aware of what is not covered by your policy. Some of the common exclusions and limitations are:
- Damages caused by driving without a valid license or under the influence of alcohol or drugs
- Damages caused by wear and tear, depreciation, or mechanical breakdown
- Damages caused outside the geographical area specified in the policy
- Damages caused to accessories or parts that are not approved by the manufacturer
Review & Renew on Time
Once you buy a car insurance plan, you should review it periodically and renew it on time. Check if your policy is adequate for your current needs and make any changes or modifications if required. In case of change, update your policy details, such as address and contact number.
Always renew your policy before the expiry date to avoid penalties and any lapse in coverage and NCB.
Conclusion
Getting new car insurance, especially if it is the first time, the process can seem overwhelming, but don’t worry! These tips can help you make it simpler and wiser. Remember, a car insurance plan is not just a requirement but also a way to protect your finances and car. So, take your time to pick the right one and drive safely!
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