All You Need To Know Before Buying Or Renewing Car Insurance This Diwali

Posted on: Oct 22, 2021 | | Written by:

All You Need To Know Before Buying Or Renewing Car Insurance This Diwali

Published on October 13, 2022. EST READ TIME: 3 minutes

Diwali is around the corner, and it is one of the most auspicious times of the year. Apart from celebrating the festival with sweets, lights, and crackers, you must also secure your car with a car insurance policy. The policy will safeguard your car and your finances. If you are planning to buy or renew your insurance this Diwali here is all that you need to know.

Why Car Insurance Is Essential?

Buying car insurance should be a conscious choice and not because it is mandated by the laws. Irrespective of whether you drive a brand-new car, or it is a used car, buying insurance is essential. A car insurance policy will ensure that your vehicle is always safe. The Motor Vehicles Act mandates all vehicles to have valid insurance. And if you are caught driving without one, be ready to pay a hefty fine. An insurance plan ensures that your car is safe in the event of an unforeseen incident. The plan will offer financial security for repairs or damages due to accidents. The plan usually covers the expenses related to the replacement of parts as well. Not having an insurance plan can hurt you financially in the short term and long term.

Getting To Know Car Insurance

Knowing a bit more about car insurance policies will aid you in the process of picking a policy that meets your needs. Being aware of what your policy offers and what it does not offer can be quite crucial during the time of claims. Here are the different types of car insurance policies.

1. Third Party Insurance

The government mandates all car owners to have third party car insurance at the minimum. It is a vanilla plan that offers protection in the case of third-party liability. If your car meets with an accident and it results in injuries or damages to another property, vehicle or individual, the policy has your back. Due to its minimal coverage, it is also the lightest on your pocket.

2. Comprehensive Insurance

A comprehensive car insurance policy offers you better coverage. Apart from the benefits of third party car insurance it also offers coverage for damages to your car. The damages could be due to an accident, natural calamities or even man-made calamities. The higher coverage translates to a slightly higher premium than third party insurance. Also, you can enhance the policy’s coverage with the help of add-ons.

3. Pay As You Drive Insurance

This is a new type of insurance that is primarily for people who do not have a lot of mileage on their cars. You can choose a plan depending on the total number of kilometres that you drive during a year. A policyholder has the option to choose between 3000 km, 5000 km and 7500 km. Depending on your insurance provider, you might receive a telematics device to keep a track of the car’s health along with the distance that you cover during a year. The premium for the policy turns out to be a little less than a comprehensive car insurance plan.

Tips To Keep In Mind While Buying/Renewing Car Insurance This Diwali

Here are a few things that you must keep in mind while buying or renewing your car insurance policy. These tips will help you make the most out of your policy.

1. Compare Plans

One of the smartest ways to save money on policy premiums is to compare them. As you compare different policies, you will get to know the coverage on offer as well as the policy premium of the same. In the process, you will learn a lot more about your policy as well. These will help you buy a policy that suits your needs and is light on your pockets as well.

2. Retain No Claim Bonus

If you are planning to buy a new car, you can retain the no-claim bonus while selling your old car. You can transfer the NCB from the old insurance policy to the new insurance policy. The discounts due to NCB start from 20% for the first year to 50% for the fifth consecutive year. Transferring it to your new policy will result in considerable savings.

3. Network Garages

While renewing or buying your insurance, ensure that you go through the list of network garages near your house. Repairs at network garages are seamless and you will not end up paying anything from your pockets. Your insurance provider will settle the bills directly with the garage, ensuring that you do not pay anything from your pockets.

4. Inclusions and Exclusions

You must go through the inclusion and exclusion list of your policy. It will give you a better idea of when your policy will have your back and when it will not.

Third Party Or Comprehensive Car Insurance: How To Select?

The law mandates you to have third party car insurance at least on your car. Though the policy is the most affordable one, it offers limited coverage and might not be for everyone. A third party liability policy is ideal if you do not use your car much.

On the other hand, if you drive a lot, a comprehensive policy is what you need. Though the premiums are a little bit higher, it offers a lot more for the premium as well. Also, comprehensive plans let you pick add-ons for enhanced coverage, which is not possible with a third party liability plan.

You must consider your needs, policy premiums, and the availability of add-ons among some of the factors to decide between both policies.

Add-ons For Your Policy

You can opt for add-ons with your comprehensive car insurance policy or pay-as-you-drive car insurance policy. You can buy these additional coverages for your car by paying a small premium. Here are the most important add-ons to consider for your policy.

1. Zero Depreciation

This add-on will ensure that you receive the total claim amount without any deductions for depreciation. This includes repairs related to painting and denting.

2. Engine Protection Cover

The add-on will cover any expenses related to engine repair or replacement. Even parts of the engine such as pistons and connecting rods are covered as a part of the add-on.

3. Roadside Assistance

This cover is helpful for people who travel a lot. The insurer will send a mechanic if you are stuck somewhere due to a vehicle breakdown. The add-on usually covers loss of key and lack of fuel as well.

Conclusion

This Diwali does not forget to secure your car and your finances with a car insurance policy. If your policy is up for renewal, now is a good time to do so. The policy will ensure that you don’t have any financial liabilities in the event of any unforeseen events. Also, buying a policy online makes it that much easier and faster, since you do not have to interact with insurance advisors.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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