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Car Insurance Do’s and Don’ts You Must Know About

Car insurance is a mandatory requirement for car owners in India as per the Motor Vehicles Act, 1988. As per the new rule, driving your car on  Indian roads without valid car insurance will attract a penalty of Rs.2,000. However, with several insurance companies offering a plethora of insurance policies, buying a car insurance policy is not an easy affair. Here is a few Car insurance do’s and don’ts that you need must keep in mind while choosing an insurance policy for your car:

 Do’s

  • Go through the online user reviews of the desired policy as well as the insurance company before making the purchase. Consider the premium, add-ons, and value-added services that are provided under the policy. It is wise to buy an insurance policy directly from the insurer instead of getting it through an agent. If you make the purchase directly from the company, you will have a clear idea about the policy terms and there will no risk of getting scammed by fake agents. 
  • Before zeroing in on a policy, make sure to compare various policies offered by the top providers. Each policy comes with certain unique features and it is important to find a policy that caters to your unique requirements. Moreover, when you compare you will get to know about the positives and negatives of various policies and can make an informed decision. Hence, visit the official websites of the insurers and compare the policies offered by them before taking the final decision. You can also visit reliable third-party websites which have all the popular policies listed on their website under a single roof. Make your priorities clear and based on that do your research. You will surely get a deal best suited to your requirements.
  • Consider buying a policy that comes with easy terms and conditions. Most often insurers have hidden terms and conditions which they don’t reveal at the time of purchase. Hence, carefully read through the policy paper and pay attention to every minute detail. In case of any confusion get in touch with the company and get your queries addressed. You should have a clear idea about the policy and all its terms before buying it.
  • Check the claim settlement ratio of the insurer. It will help you to know how good the company is at settling claims. The higher the claim settlement ratio is, the more reliable the company is. Also, you must check the claim settlement procedure. It is better to choose a company that has an easy and fast claim settlement procedure with minimal documentation.

Don’ts

  • Most of the insurance agents have their agenda and peruse their customers accordingly. If you are buying a car insurance policy via an agent, then make sure to nod your head for a policy only if it meets all your criteria. Your agent may try to convince you to buy a specific policy just to earn good incentives. Be wary and don’t get carried away. Check each minute detail related to your policy on your own and only if you feel it is the ideal one consider buying it.
  • Avoid buying an insurance policy that doesn’t have a zero depreciation cover. If you have a zero depreciation cover, you will get a complete cover regardless of the depreciation in the value of your car. Since it leaves out the depreciation factor from the coverage you will get the entire cost of replacement of its body parts. In case of any damage caused to your car due to collision or other calamities, the insurer will pay the entire amount.
  • Don’t forget to ask your insurer about the No Claim Bonus facility. It enables the policyholder to get a discount on the premium in the event of not making a claim. If your policy has this facility and you don’t make a claim in a calendar year then the following year you will be eligible to get the No Claim Bonus benefits. Hence, before buying a policy ensure that it has this facility.
  • Never buy a policy without knowing about the deductible. This is the amount that you will have to pay when you claim with your insurer. Simply put, you will have to agree to contribute a certain amount toward the cost of a claim. The remaining amount will be covered by your insurer. Be very clear about the deductible and decide an amount based on your affordability.

Buying a car insurance policy is not an easy affair. It is an overwhelming task and you need to be very careful while picking up a specific policy. However, if you keep the above-mentioned tips in mind while choosing a policy the process will be much easier. Hence, remember to consider all these vital aspects before zeroing on one insurance policy for your car.

Written By

Financial Analyst at Farmer's Insurance with over 25 years of experience working in the Financial Industry

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