It’s okay to not be knowledgeable about car insurance when you are buying it for the first time given that there are a lot of things to know. But do you know what the good news is you?
You can always learn.
If you’re unfamiliar with car insurance, it might be confusing and daunting. So let’s begin by learning the fundamentals of the industry.
In this blog, we’ll go over some basic facts about car insurance that will help you better understand it and, ultimately, get the best policy for your vehicle.
So shall we start?
Car Insurance: That Meets Your Requirements
It’s important to remember that there are two types of car insurance policies: third-party and comprehensive. The former is required by Indian law, but the latter provides more coverage and benefits. Choose third-party car insurance if you simply need minimal coverage, such as protection against third-party liability. If you want to protect your car as well, a comprehensive policy is a way to go.
Car Insurance: Correctly Set the IDV
IDV is a car insurance jargon that you’ll hear a lot when you’re shopping for a car policy. The term IDV basically stands for Insured Declared Value. It is a rough estimate of your car’s current market value. It’s important to note that IDV isn’t your vehicle’s resale worth; rather, it’s a starting point for the present value. If you choose third-party car insurance, you will not be required to set an IDV. When purchasing a Comprehensive policy, the IDV range is the only option.
A Greater Deductible May Lower the Premium, But It Also Reduces the Amount of Money Available for Claims
A deductible is a specified amount that the policyholder must pay when filing a claim. The policyholder contributes a little amount as a share. In-car insurance, there are two types of deductibles: mandatory and voluntary. Under the voluntary deductible, you can choose the amount you want to pay at the time of claim. Setting a higher deductible for cautious drivers is often regarded to be beneficial. Setting a greater deductible, on the other hand, will result in a reduced claim amount. As a result, be cautious when deciding on a voluntary deductible.
Buy Only the Necessary Add-ons
If you choose a Comprehensive car insurance policy, you will have the option of adding additional coverages, sometimes known as add-ons. You can choose from a variety of add-ons if you have a new car, such as Zero Depreciation Add-On, Return to Invoice Cover, Roadside Assistance Cover, Engine Protection Add-On, No Claim Bonus (NCB) Cover, and so on. Every add-on must be purchased separately. Your insurance premium will rise as a result of this. You must only choose the add-ons that are appropriate for your needs. For example, if you believe you have a low possibility of filing a claim, you may opt-out of NCB Cover.
You Can Keep Your NCB Intact If You Renew Policy on Time
It is not only required to purchase insurance, but it is also necessary to keep the policy active at all times. A car insurance coverage typically lasts one year, but long-term policies are also available. Otherwise, your car insurance coverage will lapse if you do not renew it on time. An expired policy is useless and will not offer you or the third party any financial security.
You may also lose your accumulated NCB (No Claim Bonus) if you do not renew your policy on time. NCB is a discount on motor insurance premiums that you receive if you do not file a claim. Because this discount might be as high as 50% for five years of no claims, you must renew your policy on time to keep it. If you do not renew your insurance after 90 days, you will lose this advantage as well as pay a higher price when it comes time to renew.
