Guide on How to Choose Car Insurance for Your First Car

Q: Q1. Is car insurance mandatory for a first-time car owner in India?

Ans: Yes. As per the Motor Vehicles Act,1988, every car owner in India must have at least a third-party car insurance policy to legally ply on the Indian roads.

Q: Q2. Should I buy third-party or comprehensive car insurance for my first car?

Ans: The choice between third-party vs comprehensive insurance is definitely your choice. However, it is important to note, while third-party insurance is cheaper and legally required, it only offers cover for third-party liabilities. On the other hand, a comprehensive car insurance policy covers third-party liabilities and even damages to your own car, due to theft, natural or man-made disasters, etc.

Q: Q3. What should I consider before choosing car insurance for my first car?

Ans: As a first-time buyer, you should consider the type of car insurance, claim settlement ratio of the insurer, network garages, add-on covers, and premium amount, before finalising your policy.

Q: Q4. How much coverage is ideal for a first car insurance policy?

Ans: For a new or first car, opting for comprehensive policy with maximum coverage along with add-ons like zero depreciation, return to invoice, engine protection, etc., is advisable, as it offers wider financial protection and helps policyholders have a peace of mind while driving their vehicles.

Q: Q5. How to select IDV while buying car insurance for my first car?

Ans: For your first car, the Insured Declared Value (IDV) must be 5% less than the initial ex-showroom price for the first insurance. After that, it typically decreases by 10% based on your insurer. Choosing the correct IDV is extremely important as it is the maximum amount your insurer will pay in case of total loss or theft.

Q: Q6. Do I need add-on covers for a first time car?

Ans: Add-on covers are optional but highly useful for first-time car owners. Covers like zero depreciation, roadside assistance, and return to invoice help reduce out-of-pocket expenses during unexpected situations.

Q: Q7. Can I buy car insurance online for my first car?

Ans: Yes. Buying car insurance online is quick, transparent, and often more cost-effective. It also allows first-time buyers to compare policies, coverage, and premiums easily before making a decision.

Q: Q8. How can I reduce the premium on my first car insurance?

Ans: You can reduce your premium by choosing the right IDV, installing ARAI approved safety devices, selecting only relevant add-ons, and comparing plans online. In addition to that, you can also reduce premium by maintaining a clean driving record and accumulating up to 50% NCB for 5 consecutive claim-free years.

Q: Q9. What mistakes should first-time car buyers avoid while choosing insurance?

Ans: First-time buyers should avoid selecting a policy based only on low premium, ignoring add-on covers, choosing incorrect IDV, and not checking policy exclusions and claim process details.

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How to Choose the Right Car Insurance for Your First Car?

Buying your first car is no less than a milestone for many. Saving up for the day by doing detailed research and finally buying the first car feels like a dream come true. Just as buying a new car is essential, it is also important to financially protect it against unforeseen incidents, such as a road accident. However, choosing the right car insurance for your first car can be quite overwhelming and confusing. If you are facing the same dilemma, continue reading so that you do not make a mistake while buying your new car policy.Read more

5 Tips to Choose the Right Car Insurance for a New Car

Here are some of the common tips to choose a new car insurance for your first new vehicle:

Assess your Needs

Before investing in a four-wheeler insurance plan for your brand new car, know your needs. Check your budget and requirements to decide the type of car insurance you need. For instance, if you only want coverage for third-party liabilities, you must invest in a third-party car insurance. However, if you wish a full coverage, you can go with comprehensive car insurance.

Compare Plans Thoroughly

This is a very important tip that can help you get the right coverage for your car. When you get car insurance online, you get an option to compare plans with ease from different insurers or from an aggregator website like Policybazaar.com.

Thus, always compare multiple plans from different insurers based on coverage, inclusions, exclusions, add-ons, deductibles, and discounts before finalising your car insurance.

Choose Add-ons Wisely

Just because it's your first car doesn't mean you have to get all the additional covers offered by insurance providers. Car insurance add-ons enhance the coverage of your policy but also come with an extra cost. So, you must only choose the add-ons that your new car needs. Some must-have add-ons for a brand-new car include Zero Depreciation, Roadside Assistance, Engine Protect Cover, and NCB Protect cover. Therefore, make sure to choose add-ons wisely.

Know Your Insurer

Knowing the credibility of your car insurance company is a crucial step in choosing the right policy for your first car. One of the easiest ways to know the credibility of your insurance provider is by checking their claim settlement ratio, discounts offered, cashless facilities, and network garages.

Compare the Online vs Offline Option

Many car owners, just to avoid the hassle, blindly trust their dealers and purchase car insurance from them at a higher price. Moreover, it is also not compulsory for you to buy insurance for your first car from the dealer. In fact, it is your choice to decide whether you want to buy car insurance online or offline. In case you buy your motor insurance online, you can compare quotes from multiple insurers and choose the best coverage at the best price.

Importance of Having the Right Car Insurance

Buying car insurance for your brand new car is not only crucial but also mandatory as per Indian motor laws. It allows you to cover your car financially from unforeseen expenses and save you from being caught by the traffic police.

There are majorly two types of brand new car insurance policies offered in India. The third-party insurance, being the mandatory one, covers any third-party liability caused by the insured vehicle. On the other hand, comprehensive car insurance offers broader coverage, including third party liabilities and own damages sustained by the insured car.

Choosing a motor insurance policy totally depends on your requirements. However, for a brand-new car, it is always advisable to get comprehensive insurance with full coverage.

How to Buy Car Insurance for Your First Car?

Buying a four-wheeler insurance is not a rocket science. Once you have decided on the plan or insurer, you can, either buy car insurance online or offline. Both these methods have their own pros and cons. However, we recommend you purchase car insurance after comparing prices from various car insurance companies online.

When you purchase brand new car insurance online, you get the following benefits:

Minimal to Zero Paperwork

No Insurance Agent Required

Instant Policy Issuance

Convenient to Compare Plans Online

Easy to Check Insurer's Credibility

Faster Purchase Process

Faster Claim Settlement

Wrapping Up!

No matter if you are buying an SUV, sedan, or hatchback as your first car, it's imperative that you protect it from unforeseen damage. A motor insurance policy acts beyond just complying with the law. Your first car is your biggest asset, so you should also look after its well-being by covering it with a car insurance policy. The above-mentioned pointers will help you choose the right insurance for your first car so that you don't have to pay for heavy repairs from your pocket.

FAQs

Q1. Is car insurance mandatory for a first-time car owner in India?

Ans: Yes. As per the Motor Vehicles Act,1988, every car owner in India must have at least a third-party car insurance policy to legally ply on the Indian roads.

Q2. Should I buy third-party or comprehensive car insurance for my first car?

Ans: The choice between third-party vs comprehensive insurance is definitely your choice. However, it is important to note, while third-party insurance is cheaper and legally required, it only offers cover for third-party liabilities. On the other hand, a comprehensive car insurance policy covers third-party liabilities and even damages to your own car, due to theft, natural or man-made disasters, etc.

Q3. What should I consider before choosing car insurance for my first car?

Ans: As a first-time buyer, you should consider the type of car insurance, claim settlement ratio of the insurer, network garages, add-on covers, and premium amount, before finalising your policy.

Q4. How much coverage is ideal for a first car insurance policy?

Ans: For a new or first car, opting for comprehensive policy with maximum coverage along with add-ons like zero depreciation, return to invoice, engine protection, etc., is advisable, as it offers wider financial protection and helps policyholders have a peace of mind while driving their vehicles.

Q5. How to select IDV while buying car insurance for my first car?

Ans: For your first car, the Insured Declared Value (IDV) must be 5% less than the initial ex-showroom price for the first insurance. After that, it typically decreases by 10% based on your insurer. Choosing the correct IDV is extremely important as it is the maximum amount your insurer will pay in case of total loss or theft.

Q6. Do I need add-on covers for a first time car?

Ans: Add-on covers are optional but highly useful for first-time car owners. Covers like zero depreciation, roadside assistance, and return to invoice help reduce out-of-pocket expenses during unexpected situations.

Q7. Can I buy car insurance online for my first car?

Ans: Yes. Buying car insurance online is quick, transparent, and often more cost-effective. It also allows first-time buyers to compare policies, coverage, and premiums easily before making a decision.

Q8. How can I reduce the premium on my first car insurance?

Ans: You can reduce your premium by choosing the right IDV, installing ARAI approved safety devices, selecting only relevant add-ons, and comparing plans online. In addition to that, you can also reduce premium by maintaining a clean driving record and accumulating up to 50% NCB for 5 consecutive claim-free years.

Q9. What mistakes should first-time car buyers avoid while choosing insurance?

Ans: First-time buyers should avoid selecting a policy based only on low premium, ignoring add-on covers, choosing incorrect IDV, and not checking policy exclusions and claim process details.

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