The moment you buy a brand new car, you are on cloud nine. To buy a car is a great achievement indeed. You allot a budget; make a list of your requirements and shortlist cars in accordance with that. You go for the test drive(s) and finalize the car that met your expectations.

After purchasing a car, some people follow this tradition. They go the preferred place of worship to seek the blessings of the almighty. The priest performs a ritual. In Hinduism, they place a lemon under each tyre and run the car over it, as it is considered as a good omen.

In India, it is mandatory to buy an automobile insurance too. So, you have to have car insurance. Before you buy motor insurance, here are the things that you should keep in your mind.

Types of Motor Insurance

There are two types of automobile insurance plans offered by insurers.

1. Liability Only - The first one is a liability-only policy. The government has made it compulsory for all the vehicles to have this policy at the very least. This policy provides the coverage against legal liabilities that may arise due to injuries, death or property damage of a victim (a third party).
2. Comprehensive Motor Insurance - The second type of insurance policy is Comprehensive Motor Insurance. It provides coverage for own-vehicle damage as well as for third-party liability. It also covers damages related to manmade tragedies, such as riots, thefts, vandalism, malicious activities, terrorist activities etc. In addition to that, it covers damages caused by natural disasters like floods, earthquake, landslides, storm etc.

As third-party insurance is compulsory in India, it is a wise decision to opt for a comprehensive motor insurance, as it provides an adequate coverage. When it comes to buying insurance, never be underinsured.

Imagine this scenario - after parking your car, you went into a restaurant. When you came back, you noticed that there is a dent on your car. It broke your heart a little when you saw that. When you went to the mechanic to get the dent fixed, the repairing cost broke your heart a little more.

The bottom line is, when you have comprehensive motor insurance, you are safeguarded against these expenditures.

You may like to Read: Third party Car Insurance

The following are the factors that you should consider before buying car insurance.

1. Daily Allowance - When your car is under repair, you get money by your insurer for hiring another mode of commuting.
2. Lock/ Lost Key Replacement Cover - You get the cover to replace your car keys if you lost them or it is stolen. Also, you get cover for lock replacement if your car was broken into.
3. Stay at a Hotel - If your car has become immobile because of an accident, you are entitled to get a hotel stay on your insurance provider’s behalf.
4. Invoice Cover Return - There is a difference between ‘claim amount receivable’ and ‘purchase price of vehicle’ under the coverage when there is a loss because of some accident. When this happens, the rider bears the difference amount from his pocket.
5. No Claim Bonus - When you don’t file a claim, you receive no claim bonus (NCB). To get that bonus, some people don’t file a claim, as they don’t want to miss out on NCB. If you just make one claim during the policy tenure, you retain the existing NCB. In this way, your no claim bonus is safeguarded.
6. Depreciation of Reimbursement Cover - This is add-on feature that offers full claim without any deduction as depreciation on the cost of replaced parts.
7. Repair of glass, rubber, plastic and fiber parts - In the case of damaged glass, rubber, plastic and fiber parts, you can get them repaired without affecting your No Claim Bonus.
8. Lost Personal Belongings and Baggage Cover - You get coverage by your car insurance company if you don’t have any anti-theft device that is approved by the ARAI (Automobile Research Association of India).

Companies Might Not Cover You For

• Normal depreciation and usual aging of the vehicle
• Major decrease in car’s value
• Technical and electrical problem
• Depreciation of tyres and tubes
• Damage caused by/to a person without driving license
• Damage caused by/to a person driving the vehicle under in influence of alcohol or drugs.

Note: Always check the above points when purchasing a car insurance policy.