How To Buy Car Insurance: The Ultimate Checklist

An accident can cause injuries and damage your vehicle, and the repair costs can be significant, too. According to a report by the Ministry of Road Transport and Highways, there were 4,61,312 road accidents in India in 2022. Hence, it is essential to have a motor insurance policy. But what are the things to know before purchasing a plan? Well, read on to know the important aspects that you must consider before you buy car insurance.

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What is Car Insurance?

Car insurance provides financial protection if your car gets damaged in an accident or is stolen. It covers the cost of repairs to your damaged car as well as third-party liabilities, such as injury, death, or third party property damages. It is an essential safety net in an unfortunate situation.

As per the Indian Motor Vehicles Act, third-party car insurance is legally mandatory for all vehicles to ply on the road. However, car owners can opt for a comprehensive car insurance policy to cover both third-party liabilities and damages to their own vehicle.

Since there are many insurance service providers in the market, it is essential to select the one that best meets your requirements.

The Ultimate Checklist to Buy the Right Car Insurance Policy

Several aspects must be taken into consideration before finalising car insurance. Have a look:

1. Type of Insurance

   There are three types of car insurance. Based on your preferences and needs, you can choose between the three. All types are explained below:

   • Third-Party Car Insurance: By law, third-party car insurance is mandatory for all vehicles. The policy covers the bodily injury, death, and property damage of a third party by your insured vehicle.
   • Own Damage Car Insurance: It covers the damage to your car in case of an accident. This is a standalone policy and only covers own damages.
   • Comprehensive Car Insurance: Comprehensive coverage covers both own damage and third-party damage. It is one of the best options for car insurance, as you can also include several add-ons to enhance the coverage.

2. Pick the Necessary Add-Ons

   Add-ons are the coverage you can purchase in addition to what you primarily get in a comprehensive policy. The add-ons provide coverage otherwise not included in the comprehensive car insurance policy. Below are some of the most in-demand add-ons:

   • Zero Depreciation Cover
   • Engine Protection Cover
   • Return to Invoice Cover
   • Key Replacement Cover
   • NCB Protect Cover
   • Roadside Assistance Cover
   • Personal Belongings Cover

3. Getting The Right IDV

   IDV, also known as Insured Declared Value, is the current market value of your car. The amount that you select as IDV is what you will receive when there is a total loss of your vehicle, either due to theft or due to an accident.

   If you opt for a higher IDV, the payout will be higher, but the premium will also be higher. Likewise, if you opt for a lower IDV, the premium will be lower, but the payout will be less. Hence, settling on a realistic IDV is essential, ensuring you're adequately covered without overpaying.

4. Check For Discounts

   Every car insurance provider offers NCB (No Claim Bonus) when the car owner does not claim during a policy year. You can get up to 50% NCB if there are no claims made for five consecutive years.

   Apart from the NCB, check other discounts that an insurance provider offers. Some discounts include:

   • Voluntary deductible discounts
   • Bundle discounts
   • Discounts for already installed anti-theft devices

5. Know The Claim Procedure

   Knowing what claim procedures are available in car insurance and whether you can get a cashless or reimbursement facility is essential. Look for insurance providers that offer a cashless facility so that you don't have to pay when you take your car for repair, and hence, you can be stress-free, come what may.

   Also, knowing what happens when you want to make a claim is essential. The claim procedure should be simple and easy to understand.

6. Know About the Renewal and Premium Payment

   Check the car insurance provider's renewal procedure to see if they offer online renewal or if you need to visit a branch to get a renewal done. Choose the one that offers flexible options for renewals.

   Also, look for an insurance provider that offers an easy mode of premium payments so that it does not feel like a burden.

7. Claim Settlement Ratio

   Talking about claims, an insurer's Claim Settlement Ratio (CSR) is a crucial aspect that you must look for before finalising anything. A claim settlement ratio is essentially the ratio of the settled claims to the claims received.

   The higher the CSR, the better the chances of seamless claim settlements.

8. Customer Support

   Customer support is an essential aspect of an insurance provider that you must consider. You will seek the right and prompt customer support in an emergency. Hence, make sure to see how good the customer support of an insurer is.

9. Go Through Customer Reviews

   The customer's review reflects how good an insurance provider is. Honest reviews from existing customers will provide useful insights and information into whether the insurer is right for you.

10. Compare Before You Decide

    Several insurance providers in the market have similar offerings. Hence, you must compare different insurance providers before making your final decision.

Conclusion

Getting car insurance is more than just a legal formality; it is an essential step towards a safe financial future. The right approach will ensure you choose the right insurance provider without much hassle. Sticking to the checklist and comparing to get the best coverage is recommended.