Everything You Need To Know Before Buying Your Car Insurance

October 6, 2022 nkechi Credit Insurance 0

Screenshot 20221006 090733

In India, insurance is clearly a developing business with a long way to go, particularly in terms of public understanding of its importance and utility. This is especially true in the auto insurance industry, where many drivers regard it as only a formality to avoid a costly punishment. Motor insurance, on the other hand, provides a lot more. Understandably, no one wants the excitement of purchasing a new car to be tempered by the possibility of an accident or damage in the future. Insurance, on the other hand, is what helps avert an unforeseeable calamity, thus it deserves its due amount of research and planning prior to purchase.

The earliest phases of lockdown had halted overall mobility and even had an influence on automotive sales. Now that the limitations are easing and the roads are bustling with new automobiles every day, it’s the ideal moment to reconsider how you purchase car insurance. Furthermore, Covid-19 has accelerated digitalisation across businesses like never before, including the insurance industry. Traditional insurance buying methods have given place to more efficient digital transactions.

To get the most out of their insurance coverage, car owners must consider a number of aspects, including legislative regulations, add-on options, and the advantages of purchasing online. Here’s a quick rundown of everything you need to know about buying four-wheeler insurance.

Understanding the Difference Between Third-Party and Own Damage Coverage

Accidents do happen, and we have little to no influence over them, as much as we would prefer to avoid them. They can be quite harmful to the people involved. According to a recent World Bank research, India has a concerning rate of 4.5 lakh traffic accidents each year. Despite accounting for only 1% of all vehicles on the road, it ranks first in terms of fatalities. In such a situation, a lack of insurance knowledge can be harmful to not just one, but both parties concerned.In 2019, the legislation enforced third-party liability coverage for all vehicles being operated in both personal and commercial capacity, recognizing the clear necessity for insurance. Third-party insurance pays for damage to a third party caused by your car in the event of an accident.

However, in the event of an accident, this does not provide any risk protection for you or your vehicle. As a result, it is recommended that all car owners have a comprehensive insurance coverage that also covers their own damages. This is especially true if your car is brand new and gets a lot of use. You should also consider the fact that new automobile owners are required by law to purchase a one-year comprehensive three-year third-party insurance policy at the time of purchase. The owner is only required to acquire a standalone own damage policy for the second and third years.

Accidents aren’t the only danger that your car must be safeguarded from. A comprehensive coverage will cover your car not only in the event of an accident, but also in the event of theft, burglary, flood, or fire.

Comparison, Convenience, and Other Benefits of Online Shopping

The world is witnessing a huge digital change, which has been reflected across all industries for quite some time now, thanks to Covid-19. The usual insurance purchasing process entails scheduling face-to-face encounters with brokers and selecting from a small pool of possibilities.

As a result of the Covid scenario, social isolation has become the new norm. Insurance purchase has been made easier by several notches with the debut of the internet alternative, as we become acclimated to a contactless world. You can compare a variety of policies offered by every insurer and choose the one that best meets your needs. When making an online purchase, the process is significantly less time consuming and lot faster. Not only that, but as compared to traditional insurance, you can save a lot of money with online insurance.

Check this:  10 Benefits Of Comprehensive Car Insurance

There are a lot of myths about online auto insurance. People believe, for example, that online claim rejection is more likely. This, however, is not the case. It is significantly easier to settle claims online, and it relieves you of the burden. Even whether you’re renewing your policy or switching insurance companies, the internet method is far more convenient and secure at these times.

Make the Most of the No Deposit Bonus (NCB)

Your policy comes with a built-in no-claim incentive. It compensates you for safe driving and not filing a claim during the insurance year by giving you a reduction on your renewal premium. According to the law, a car owner can receive a 20% discount for the first year of no claims, a 25% discount for the second year, a 35% discount for the third year, and a 45 percent discount for the fourth year. If you drive safely, NCB can help you save a lot of money on your insurance.

Here are a few pointers to help you make the most of your NCB:

 

  • Remember to renew your insurance policy on time. If you don’t renew your policy within 90 days of its expiration date, you risk losing your bonus.
  • Pay for minor damages out of your own pocket. If you have a large amount of NCB, claiming even a small amount could result in you losing it all.
  • Choose no-claims bonus coverage. This policy requires an additional premium and protects your bonus even if you make a minor claim.

 

Ratio of Claims Resolved (CSR)
This is one of the most crucial comparing elements that car buyers should consider when making a purchase. The number of claims settled by the insurance company versus the total number of claims received in a year is represented by this ratio. You should look for a policy that has a claim settlement ratio of over 90%. A low CSR suggests not only an unresolved insurance claim but also a time-consuming claim settlement process.
Get a clear picture of what you’re getting in a deal by cutting through the insurance jargon and policy wordings. The last thing you need after a mishap is to become entangled in a complicated claim settlement process. Choose an insurance with a good CSR and a simple, efficient, and painless claim settlement process.
Add-Ons That Work Best
 
Comprehensive coverage includes not only policy elements, but also optional supplementary benefits. At an additional fee to your premium, you can purchase several useful add-ons or riders.
Coverage with no depreciation (bumper to bumper)
When you file a claim, the insurance provider considers your car’s depreciated worth. As a result, the coverage is for the depreciated worth of the damaged parts rather than the current market value. This increases the cost of the harm to you. However, you can avoid this by purchasing a zero depreciation policy. The insurer will cover the entire cost of the policy and will not deduct depreciation.
Cover for the engine
Even the most basic comprehensive car insurance does not cover non-accidental damage to your engine. The engine, on the other hand, is subjected to a great deal of wear and tear over time. This is especially true in India, where water logging, drainage, and ditches are all too widespread. This rider will protect you if your engine is damaged by water, oil leakage, or other factors.
Rider for ambulance and medical expenses
Accidents result in harm to both the car and the drivers involved. With such high accident rates, the chance of sustaining a serious physical damage is very likely. This rider will come to your aid and cover emergency medical treatment if you require immediate assistance. Check with your insurer about the scope of your coverage.
Coverage for roadside assistance
Emergencies strike without warning and at the most inconvenient times and locations. If your vehicle breaks down in the middle of nowhere, you never know when you’ll need assistance. If you choose this rider, all you have to do is call your insurer for assistance. The insurance company arranges for a mechanic to come out and assist you right away. This rider is quite important, especially on lengthy road trips or when driving in remote locations.
Coverage for personal injuries
This insurance is required by law for car owners. Accidents can, sadly, be fatal, and even fatalities can occur. No one can predict such a disaster, so it’s best to prepare for it. In such cases, having personal accident insurance can be really advantageous. In the event of an accident, it pays compensation if the policyholder suffers physical damage, permanent incapacity, or accidental death. Because it is a legal necessity, it is included in the comprehensive insurance, along with third-party liability coverage.
Choose a Declared Value with a High Insured Value (IDV)
One of the most significant phrases in your auto insurance policy is Insured Declared Value, or IDV. It refers to the insurance company’s estimate of your car’s current market worth. The insurer will give coverage for this amount when submitting a claim for total damage or theft of the car. So, whether you’re buying a new policy or renewing a current one, it’s always a good idea to keep the IDV as high as possible based on your previous policy’s IDV. This has an impact on your premium, but it will be beneficial in the event of misfortune.
Renew your insurance policy on time.
Most vehicle owners aren’t thinking about renewal when they buy their car, but it’s crucial to understand what you’ll lose if you don’t renew your policy on time. In addition, given the current state of movement, it’s feasible to miss renewal deadlines. If you don’t renew your policy within the grace period, it will lapse. This means that your vehicle will be uninsured and you will be prone to financial losses. If you renew after the deadline, your insurer will expect you to repeat the entire process. You’ll also lose your no-claim bonus if you do it this way. It’s usually a good idea to renew your insurance policy ahead of time.
Customize Plans to Meet Specific Needs
Even while we are gradually returning to normalcy, Covid-19 remains active, and the new strain Omicron has been classified as a variety of concern. Remote employment and confinement to one’s home may once again be a possibility in these uncertain times. If you don’t drive your car very often, there are a few policies available that are tailored for situations like this and cover third-party liability, fire, and theft. They are available for a reduced price and may be purchased easily online.