Home Auto Insurance Car Insurance Policy – What to know about car insurance be-fore you shop?

Car Insurance Policy – What to know about car insurance be-fore you shop?

18 min read

We put a lot of effort into selecting the best car according to our requirements but when it comes to selecting the right car insurance policy for that same car, Do we even put half of the fort? the answer is probably no for more than half of the readers. yes, it is understandable that selecting the right car insurance policy does require you to have some pre-knowledge which is exactly why people refrain from it. well, in order to make this process a bit easier, we have put together some useful information which can help you select the right car insurance for your car. have a look at it below:

 Classifying Car Insurance policies on the basis of coverage provided

Before we proceed to start discussing the topics of this section, there is one simple thing that should be discussed. see, right now there are two types of readers reading this article; one who has no Idea about car insurance policies and the other group is of readers who have a rough idea of car insurance policies. So, the latter group can easily skip this section and move to the next one and former group readers should stick around and learn about the most essential part of a car insurance policy i.e. Types of car insurance policies. Basically, there are two types of policies which are 3rd party car insurance and Comprehensive car insurance cover. the details about each of these types are discussed below:

  • Third-Party Car Insurance Cover

3rd Party car insurance is the most basic form of car insurance cover. and Motor Vehicle Act 1988 states that it mandatory for every car in India to have a 3rd party car insurance. the coverage under this cover is provided for any damage caused by you to a third party in an accident or a hit. every 3rd party car insurance reimburses a third party for the damage caused to his car, property or bodily injuries. the claim settlement process of this cover is a bit tedious. firstly, the third-party has to report an FIR in police station nearest to the spot of the accident and then file a case in the tribunal court. and until the court judgment is not announced, the third-party doesn’t get any reimbursement. one last thing you need to know about this cover and you might have already guessed it by now is that there is no personal coverage provided under a 3rd party car insurance. now, let us move to comprehensive car insurance cover.

  • Comprehensive Car Insurance Cover

Let’s accept one thing right here only, all the problems that we face while hunting for the right car insurance policy are for grabbing a good comprehensive cover for our car. the reason for this is simple, after all, personal and own vehicle damage is covered in this cover only. believe it, there are hundreds if not thousands of car insurance policies available both online and in the market from tens of car insurance companies like IFFCO Tokio car insurance and Bajaj Allianz car insurance. A comprehensive cover basically provides coverage for vehicle damage and personal medical expenses in case of a car accident. other protections include theft protections, malicious acts coverage and damage protection during natural calamities like earthquake, landslide, lightning, flood, and cyclone. there are add-ons and extensions available too but to enjoy those privileges, you have to pay an extra premium. extensions and add-ons will be discussed in the next section.

No Claim Bonus

There can be several reasons possible that make the people hunt for the right car insurance cover. but shaving some buck off the cost of car insurance policy will be on the list of almost every buyer and what can be more effective to avail huge discounts on car insurance renewal than No claim bonus. In simple words, a No claim bonus is a reward that you get in the form of a discount from your insurer when you don’t make any claims from your car insurance company. read the following points about a No claim bonus that will help you understand it better:

  • The minimum period for which you have to not make any claims from your car insurance company in order to get a no claim bonus during car insurance renewal is one year and the maximum cap is set to five years.
  • when you sell your car to a second owner or when you buy a second-hand car, the no claim bonus remains intact as it is associated with the policyholder and not with the vehicle insured.
  • During car insurance renewal, if you plan to switch your insurance company, then you have to get issued a no claim bonus certificate from your previous insurer and submit it to the new insurer in order to get the discount.
  • No claim bonus is not offered for the 3rd party car insurance.
  • In the table given below, details regarding the discounts offered according to different time periods are provided. Have a look at it:
READ  What if I’m not happy with the repairs, Ways to deal with badly done repairs:
Time Period Discount Offered
One Year 20%
Two Year 25%
Three Year 35%
Four Year 45%
Five Year 50%

Zero Dep Cover

There is a popular misconception regarding the reimbursement for damage repair by car insurance companies. A lot of people believe that they are going to get complete damage repair cost from their insurer for the complete term of their car insurance. But unfortunately, it is not like so in the real world. As your vehicle ages, the insurance company pays lesser and lesser part of the damage repair. not only this, the pace at which your contribution to the damage repair increases is directly proportional to your frequency of making claims. A Zero-Dep, in this case, is the best solution possible if you want your insurer to pay the complete cost of damage repair for up to five years. but there’s a caveat, you can get a zero-dep cover only for a brand new vehicle. not only this, you cannot extend the zero-dep cover period for longer than five years.

IDV of your Car

IDV stands for Insurance declared value of your car and it is set through a mutual agreement between the insurance company and the buyer of the policy before the purchase is completed. IDV specifies the amount that you will be getting form your insurer when your vehicle gets stolen or in the case of a total loss.

What is there for you guys to leaner about IDV?

See, at the time of deciding IDV, you have a choice of either keeping it high or you can keep it low. if you go for the former choice, you will have to pay a slight extra on your premium but if you choose to go for the latter option, then you can save a few bucks and at the same time keep in mind that you will be getting a lower reimbursement in the cases mentioned above.

Car Insurance calculators

Online car insurance calculators are a great tool that can help you find the right comprehensive cover for your car, especially, when you are a noob in the world of car insurance. these are simple tools that based on the information like your income and make and model of your car tells you how much you should spend on your car insurance. Along with this, you even get a list of insurance policies that fit exactly into your budget and fulfill all your specific requirements. it is these online car insurance calculators that make finding the right car insurance policy an easier task. you can get access to these online car insurance calculators on the websites of several car insurance companies like IFFCO Tokia car insurance.

Find Out how you can grab the best deal on car insurance policies

Now that we have learned a lot about the basics of car insurance policies, it seems that it is th3e right time now to discuss something interesting. in this section, we are going to list out some tips and tricks that can help you shave off some bucks from the cost of your car insurance policy.

  • First and foremost tip which is going to help you get the best deal is exploring all the options available both online and offline in the market.
  • now, everybody knows that no claim bonus is the best way to get a huge discount on car insurance renewal and therefore, the next tip is based on how you can save retain your NCB. try not to make claims for small damages and get them repaired by yourself as a no claim bonus goes a long way n helping you save some money on your car insurance policy.
  • Maintaining a good driving record is also a good way to get some discount on your car insurance premiums.
  • Get anti-theft gadgets installed in your car as it decreases the probability of your car getting stolen and therefore, car insurance companies offer some discount for the cars fitted with these gadgets.
  • when you purchase a car insurance policy, your payment is divided into two basic parts i.e. excess and premiums. excess if the lump sum amount that you pay to your insurer initially. So, if you keep your excess higher, your premiums automatically get lowered.
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