Is Car Insurance Worth It Despite Its High Cost?

Do you ever wonder if car insurance is worth the annual premium? The truth is that it provides significantly more value than it costs, especially since it's a legal requirement and an accident without it could bankrupt you. Car insurance protects your finances against various uncertainties by covering everything from accident-related repairs to theft and natural disasters. It serves as a safety feature, allowing you to drive with confidence and focus on the road ahead. Let's find out why car insurance is a good investment for every car owner.Read more

Top Reasons Why Car Insurance is Worth Investing in

One serious car accident, and it will cripple you financially. The right car insurance offers financial protection against such mishaps and saves you from bankruptcy. Let's explore the various benefits that a four-wheeler insurance policy offers:

1. Legal Requirement

   The Motor Vehicles Act, 1988, requires all vehicle owners in India to have at least third-party liability insurance. Driving without car insurance can result in a fine of Rs. 2,000 for the first offence and Rs. 4,000 for subsequent violations. The government has also proposed increasing these fines to ensure compliance.

2. Covers Repairs of Car Damages

   Comprehensive car insurance covers the repair costs of your vehicle in case of accidents, fire, vandalism, or natural disasters. Given the rising costs of repairs and spare parts, this coverage helps you avoid unexpected financial burdens.

3. Covers Theft of Your Car

   If your car gets stolen, your insurance company compensates you with the Insured Declared Value (IDV) of your vehicle. IDV is the current market value of your car and the maximum value your insurer will pay in the event of theft or total loss.

4. Coverage for Third-Party Liabilities

   Third-party insurance covers the legal & financial liabilities if your vehicle injures someone or damages their property. During stressful times, it provides essential financial support by reducing out-of-pocket expenses that could otherwise reach lakhs.

5. Multiple Add-ons Available

   Comprehensive car insurance allows you to enhance protection with useful add-ons, such as zero depreciation cover, roadside assistance, engine protection, and return-to-invoice. These add-ons ensure that your coverage is customised to your car's age, usage, and your driving habits.

6. Cashless Repair Services

   Most insurers have a broad network of authorised garages across India where you can use cashless repair services. You don't need to pay upfront; your insurer directly settles the bills with the cashless garage, making the process quick and hassle-free.

Simple Tips and Tricks to Make Car Insurance More Affordable

A car insurance policy doesn't have to be expensive. Here are a few smart steps to help you reduce your premium while keeping essential protection intact:

1. Buy/Renew Car Insurance Online

   Purchasing car insurance or renewing it online through trusted platforms like Policybazaar.com helps you save significantly on your premium since agent commissions and administrative fees are not involved. You can compare quotes from multiple car insurance companies and pick a plan with the right balance of cost and coverage.

2. A Higher Voluntary Deductible

   A deductible is the part of the repair costs you agree to pay yourself before your insurer covers the remaining amount. Choosing a higher voluntary deductible can lower your car insurance premium. This choice is ideal for confident, low-risk drivers who can cover minor repair costs themselves.

3. No Claim Bonus (NCB)

   If you don't raise a claim during your policy period, the insurer rewards you with a No Claim Bonus. It is a discount of 20% to 50% on your renewal premium. NCB is one of the easiest ways to make your car insurance coverage more affordable.

4. Avoid Raising Claims Frequently

   If the damage is minor and repair expenses are affordable without insurance, it's usually best not to file a claim. This preserves your NCB, potentially resulting in lower premiums later. It also avoids premium loading —a penalty for high claim frequency —at car insurance renewal.

5. Choose Important Add-on Covers Only

   Add-ons in car insurance can help expand the scope of your policy, but they also increase your premium. The key is to choose only the options that match your needs, like zero depreciation for a new car or roadside assistance for frequent travellers.

6. Buy Pay as You Drive (PAYD) Cover

   Pay as you drive insurance allows you to pay a premium based on your driving habits. If you drive occasionally, a PAYD policy can reduce your insurance costs while still offering comprehensive coverage benefits.

Also Read: Does Car Insurance Premium Increase After Accidental Claim?

Summing Up

As a responsible car owner, you should view car insurance as an investment rather than a cost. Accidents, natural disasters, and thefts can cause substantial financial losses if you're uninsured. By making a few wise choices, such as comparing policies, utilising your No Claim Bonus, and selecting appropriate coverage, you can maintain protection while keeping premiums budget-friendly.