Which insurance is best for a car is one common question that often comes to every car owner's mind being so many insurers available.
By understanding the types of coverage, assessing your needs, shopping around for the best rates, checking for discounts, reviewing the insurer's reputation, and understanding the terms and conditions, you can find the right policy to protect yourself and your vehicle.
Let us start with some important statistics about the car insurance scenario in India as per the annual report shared by IRDAI.
1. Insurance Penetration
Only about 70% of vehicles on Indian roads are insured, despite it being mandatory by law.
2. Claims Ratio
The claim settlement ratio for motor insurance in India varies from 70% to 90% among different insurers.
3. Premium Costs
The average annual premium for car insurance in India ranges from INR 3,000 to INR 7,000 for a basic third-party policy and from ₹10,000 to ₹25,000 for a comprehensive policy.
What to Know Before Buying Car Insurance?
Several car insurance policies are available in the market offered by various insurance companies. However, different car insurance policies offer different types of coverage, for which the car owner needs to keep a few things in mind before purchasing car insurance like his own vehicle needs, and requirements.
Understand Your Car’s Needs
A car owner needs to assess the risk from all angles and keep in mind all possible risk factors for the car, like theft, natural disasters, or regular damages to the car due to too much traveling. For new and expensive cars, comprehensive insurance with zero depreciation cover is advisable. For older cars, a basic third-party policy might suffice.
Understand the Types of Coverage
- Third-Party Liability Insurance: This is the most basic and mandatory insurance, covering damages to third parties (both property and injury) caused by your vehicle. It does not cover damages to your own vehicle.
- Comprehensive Insurance: Provides broader coverage, including third-party liability as well as own damage (theft, accidents, natural disasters, fire, etc.). It also covers personal accident claims.
- Zero Depreciation Cover: This add-on ensures that you receive the full claim amount without any depreciation deduction on the parts being replaced.
- Personal Accident Cover: Covers medical expenses and compensation for injuries or death resulting from a car accident.
IDV Vs Premium
As we talk about things to know before purchasing car insurance, we must know the difference between premium and IDV. A premium is a sum paid by the policyholder to the insurance company for the coverage it provides against any damages to the car. A car owner can increase or decrease the premium according to his/her budget. Now, IDV or an Insured Declared Value of the car is the present market value of the insured car over which the insurance company agrees to compensate if there is a total loss of the insured car.
Checking over Voluntary deductibles
While checking which insurance is best for a car, it is important to understand all about the voluntary deductibles. A voluntary deductible refers to the part of the claim amount that a policyholder agrees to pay at the time of claim settlement. In case, you do not opt for a voluntary deductible in your insurance policy then your insurance company will pay for the whole claim amount and will charge a higher premium for the same.
Understand the Terms and Conditions
Before purchasing a policy, thoroughly read the terms and conditions. Pay attention to details such as coverage limits, deductibles, exclusions, and the process for filing claims. Seek clarification from your insurance agent on any points you do not understand.
Also Read: Benefits of Adding Key Replacement Add-on Cover in Car Insurance
How a PoSP Insurance Agent Can Help in Choosing the Right Car Insurance Policy
Point of Sale Person (PoSP) insurance agents play a crucial role in helping individuals navigate the complex world of car insurance. They are trained professionals who can provide personalized assistance and guidance, ensuring you choose the right policy that fits your needs. From providing expert knowledge and personalized recommendations to assisting with documentation and claims, their services ensure you get the best coverage tailored to your needs.
At PBPartners, we are equipped with a team of the best Motor Insurance agents who can help you in navigating the best car insurance plans.
Wrapping Up!
Navigating the car insurance market in India can be a daunting task due to the multitude of options available. But by understanding the types of coverage, assessing your needs, comparing premiums and features, checking the insurer’s claim settlement ratio, and understanding the terms and conditions, you can choose the right car insurance policy to protect yourself and your vehicle on Indian roads.
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Frequently Asked Questions
Q. What is zero depreciation in car insurance?
A. It means that the insurance company will cover the full cost of repairing or replacing car parts without factoring in depreciation. Zero depreciation is an add-on that minimizes the policyholder’s out-of-pocket expenses during claim settlement.
Q. How to check car insurance validity?
A. The policyholder can visit the insurance company’s website or App to check the car insurance validity.
Q. What is IDV in car insurance?
A. In car insurance, an IDV or insured declared value refers to the maximum sum assured that the insurance company will pay in case of total loss or theft of the car.
Q. What are the factors affecting the car insurance premium?
A. The car insurance premium is primarily affected by factors including the driving record, vehicle type, location, usage, credit score, and chosen deductibles by the policyholder.
Q. Why is it essential to compare the car insurance quotes?
A. It is pivotal to compare car insurance quotes because it helps the policyholder find the best coverage for his vehicle and that too at the most competitive rates, ensuring the policyholder gets the best value for his money along with protection for the vehicle in the long run.