5 Important Things to Know About Car Insurance Policy

A car owner must have a third-party liability insurance policy to abide by the traffic rules in India. Even though we live in a digital era and it has become easier to purchase a car insurance policy, yet sometimes it gets confusing to understand the technicalities of the plan. However, you can opt for the old ways of purchasing the plan by involving agents but that could increase the expenditure and complexity.

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*TP price for less than 1000 CC cars. All savings are provided by insurers as per IRDAI approved insurance plan. Standard T&C apply.

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Above-mentioned prices are for a 7-year-old Maruti WAGON R AVANCE LXI (998 CC) registered in Gurgaon and 15 days before expiry of previous policy

So, here we will mention some of the important things related to car insurance that you should know about.

You Can Save by Paying Premium in Full

Purchasing anything in monthly, quarterly, or half-yearly installments makes it easier for the buyer to afford it. Since we are talking about insurance policies and their premium payments, this might come as a shock to you that many insurers charge an extra amount to divide your premium payments into monthly, quarterly, and half-yearly installments.

So, the more you divide your payments, the more charges they would add up. It is recommended that you ask your insurer about the administrative fees they charge in dividing the premium payments into installments. If it makes sense to you and you can afford it then you can save a lot by paying the premium amount in full. You will not only avoid the added expenses but also you won’t have to worry about missing any payment.

Cashless Repairing at Network Garages

The insurance providers have a network of garages registered with them. In case you meet an accident and your car suffers serious damage, you can contact your insurance provider and ask them about these network garages. Then you can go to that particular garage where you will not have to pay out of pocket.

Once your car is repaired, you will only have to pay a percentage of the amount known as the deductible. The deductible amount and the fixed charges will depend on your insurance policy. Then the insurance company will take care of the rest of the payment.

Don’t Be Brand Conscious

Being brand conscious can cost you. It is one of the human natures that we set our minds onto one thing and stick to it for a long time. Well, it can be beneficial for you when you stick to any apparel brand but when it comes down to the insurance policies, it is recommended that while renewing your existing insurance plan, check if you are paying the right amount or any other company is providing the same benefits in lesser rates.

However, insurers sell their policies through their agents and brokers and their fees are included in your final payment amount. Therefore you can utilize the digital method of purchasing the insurance policy where you can directly search for the policy, compare different plans and purchase it online without any included agent’s or broker’s fee.

NCB Can Be Transferred From One Insurer to Another

NCB stands for No Claim Bonus is a feature in the car insurance policy. It is like a reward for the policyholders who do not raise a claim in a year. Starting with 10% for the first claim-free year, the highest no-claim bonus goes up to 50% for five years without raising any claim.

There is a kind of confusion among the policyholders that they need to stick to the same insurer to get the benefit of an NCB, however, No claim bonus is portable. It does not matter how long you have to stay without raising a claim and collecting the NCB percentage with one insurer, you can always transfer it to the next insurance company you choose.

Add-Ons Instead of Comprehensive Plan

Although purchasing a comprehensive car insurance policy provides you an overall coverage, you have an option of purchasing a standard car insurance plan and then add-on different riders according to your requirement. This way you can stay financially safe in case of car accidents.

There are car insurance add-ons available like Return to invoice cover, zero-depreciation cover as well as cover for engine and gearbox. Return to invoice and zero-depreciation cover will make sure that you get the reimbursement for the amount you have paid when you purchased the car in case of total wreckage during the policy period. Add-ons covers like engine and gearbox protection will counterbalance the deduction arising from depreciation.

Conclusion

Purchasing an insurance policy is different than understanding its technicalities. One can now utilize digitization and purchase a policy online. Purchasing a policy makes it easier for you to understand the technicalities and make the purchase cost-effective. You can compare different plans and calculate premium rates using an online car insurance premium calculator tool so that you can purchase the car insurance plan that suits your requirement and budget as well as make you satisfied with the purchase.

Written By: PolicyBazaar - Updated: 12 July 2021
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