When purchasing a car, insurance is a must to have for it in India. According to the Motor Vehicles Act 1988, it is compulsory to own a third-party liability car insurance policy to drive any car in India. Besides that, the owner also opts for owing a self-damage insurance cover. There are tons of different companies offering their insurance policies at different prices and with different features. Finding and choosing the right one among them is a tricky task.
When buying a new or a used car, the dealerships often help the consumer in finding the insurance policy. However, in many such cases, the cost of having an insurance policy goes higher. Hence, it is always better to buy the insurance policy yourself instead of getting help from the vehicle dealer. With a little bit of research, you can find the right insurance policy for your vehicle.
Also Read : Why Should One Purchase Comprehensive Car Insurance?
Here are some tips to pick the right insurance policy for your car.
Understand your requirement
Before buying an insurance policy, you need to take a self-assessment of your requirements. There are two different types of car insurance policies available in India – third-party insurance and comprehensive insurance. The third-party insurance policy is compulsory by law. It covers the damages incurred by the other party. On the other hand, the comprehensive policy covers both third-party liability and self-damage. A comprehensive insurance policy also covers the losses in case a car gets stolen. Before you move ahead to buy an insurance policy, learn and understand these policies and assess them on the basis of your requirements. Also, keep in mind your financial strength as well.
Search and compare different plans
Searching on the internet will bring tons of insurance policy results offered by various companies. Check those carefully with all the details. Always compare multiple plans and narrow the search based on your requirements. This will help you to find the most suitable plan for you.
Check for add-ons
Many insurance policies come with some add-ons, which are additional coverage elements that can be purchased by paying an additional premium value over and above the quoted amount. Remember that the add-on elements are only available with the comprehensive insurance policy plans and they are usually focused on self-damage coverage.
Check claim settlement ratio (CSR)
This is a major factor you should check before finally purchasing the policy. Always check the claim settlement ratio (CSR) of the insurer before buying the policy. This indicates the number of claims settled by the insurance provider against the number of claims the insurer has received in a year. Also, after narrowing down your search, check and learn how to claim insurance coverage from those insurers.
Read the terms and conditions
We often neglect the terms and conditions of the insurance policies mentioned in the fine print. However, reading those will reveal a lot about the policy you are about to purchase. Hence, it is always recommended to take time to read the terms and conditions carefully before signing up for the insurance policy. Also, it is important to understand every clause and condition of the policy. One thing to understand is the no-claim bonus rule. Many insurance companies offer a no-claim bonus or NCB, which is basically a discount on premium payments if the policyholder doesn’t make any claim during the previous year.
How to choose the right car insurance policy
Understand your requirement
Search and compare different insurance plans
Check for add-ons
Check the claim settlement ratio
Read the terms and conditions
First Published Date: 28 Sep 2023, 13:17 PM IST
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.