Purchasing motor insurance for the first time requires careful consideration and understanding of the available options. As a first-time buyer, making an informed decision that provides the right coverage for your new car is important. This story looks at the top five tips that can help you navigate the world of motor insurance while ensuring you choose the most suitable policy according to your requirements.
Understand your requirements: Before buying motor insurance, assessing your requirements is crucial. You must first evaluate factors such as the age of your vehicle (especially when buying a second-hand car for the first time), its usage pattern, and the budget for premiums. Consider whether you need comprehensive coverage or third-party liability coverage. Comprehensive coverage offers protection against damages to your vehicle and covers third-party liability. On the other hand, third-party liability coverage only covers damages caused to others. Hence, you should understand your needs and evaluate your budget to determine the type and coverage level that best suits you.
Research and compare: Always look for reputable insurers in the market with a good track record of customer satisfaction and reliable claim settlements. Do not zero in on the policy offered by a car dealer. Generally, car dealers have a tip-up with only a few insurers, and you might pay additional premiums for the same coverage you get from other insurers at a lower price. Hence, use online platforms for insurance policy comparison. Gather information about premiums, coverage benefits, and customer reviews.
Rahul M Mishra, Co-Founder & Director of Policy Ensure, said: “While comparing policies, pay attention to the coverage options, deductibles, and additional features provided. Compare premiums from multiple insurers to ensure you find a competitive price. Remember, the cheapest policy may not always offer the most comprehensive coverage, so balance affordability and the level of protection you require.”
Opt for the right add-on: You must consider add-on options that enhance your coverage. For instance, go for add-ons that include zero depreciation cover. This add-on ensures that your insurer reimburses the full value of damaged vehicle parts without considering depreciation. Engine protection cover can be beneficial, especially if you live in an area prone to waterlogging that can cause damage to the engine else; you may not require such an add-on as it will not add much value to your policy. Roadside assistance is another useful add-on that can provide support in case of breakdowns or emergencies, especially if you drive your vehicle on long routes regularly.
Check Insured Declared Value (IDV): It is essential to consider IDV when buying motor insurance. It is the maximum claim amount you will receive in the event of total loss or theft of your vehicle. Mishra said, “You must ensure that the IDV is accurately calculated based on the current market value of your vehicle. Overestimating or underestimating the IDV can have consequences during the claims process. You should consult with the insurance provider or use online tools to determine the appropriate IDV for your vehicle. This will help you receive fair compensation in case of a significant loss and avoid any financial setbacks.”
Understand policy terms: Before finalising your motor insurance purchase, you must thoroughly read and understand the policy terms, conditions, and exclusions. Familiarise yourself with the claim process, renewal procedures, and any limitations or restrictions the insurer imposes.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.