Buying a car is a big-time dream for a lot of people. A car is an essential asset to have in present times. It simply makes life easier and more convenient for us. Hence, it is essential to ensure its safety. This is where car insurance comes into play and safeguards our vehicles. Car insurance plans offer the needful financial cover to a vehicle against damages, theft, as well as third party liabilities. It is mandatory by law to have at least Third-party Car Insurance for driving a car in India. While having valid car insurance is a must, there are a few other things to be careful about while getting car insurance.
Let us look at the most crucial 7 things to inspect while getting car insurance.
There are different types of car insurance policies offering a different set of coverage. Third-party insurance offering protection against damages to a third party by the insured vehicle is mandatory by law. Simultaneously, Comprehensive car insurance covers damages done to one’s own vehicle as well as third-party damages. Hence, be mindful of your needs and the type of coverage you need while getting Car insurance.
Understanding the car’s maintenance and probability of risk is important. Doing so will help you narrow down to the correct premium amount for your car. Conducting online comparisons is also advised for getting quotes from various insurers while getting car insurance. This will help you navigate your way to the most affordable and well-suited plan for you.
The Insured Declared Value or IDV is the car’s current market value calculated by eliminating the depreciation amount. It is often misunderstood as the current market value of the vehicle, but it is actually the maximum Sum Assured provided by the insurer in case of theft or total loss of the vehicle. The IDV is calculated by deducting the car’s depreciation from its listed selling price.
No-Claim Bonus or NCB is a discount in premium provided to the policyholder for raising no claims in a policy year. In a way, it is a reward given to the insured for attentive driving. It is available at the time of renewal of the policy. Therefore, having NCB can help in reducing the total renewed premium.
Some specific factors and situations are not covered under Car Insurance plans. Hence, to avoid any unpleasant surprises during the claims process, it is best to go through the policy documents thoroughly and check their exclusions. Some common exclusions are breakdowns, consequential loss, wear and tear, losses incurred while driving under the influence of drugs or alcohol.
Another thing to look out for is the Claim Settlement Ration or CSR. It is the percentage of insurance claims settled by an insurer against the total number of claims received. Ideally, one should opt for a policy offered by an insurer with over 90% of claim settlement ratio. Therefore, choosing an insurer with a low claims ratio is not advisable while buying a Car Insurance policy.
The first and foremost aim of getting Car Insurance is to get protection against any financial emergency that arises from any damage or loss to the vehicle. Generally, most insurers provide cashless services or compensation only if the insured car is repaired at a network garage. Hence, choose an insurer offering maximum network garages.
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