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All You Need to Know About Luxury Car Insurance

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For some, a car is just a means to go from one place to the other, but for some, it is about comfort and style. For those who fall in the latter category, the choice of car is usually a luxury car. It is a dream for many and, thus, their prized possession. These cars come at a big price tag; as they are expensive, they also need extra care and maintenance. Due to this, any damage to these cars can lead to many repair expenses. Thus, insurance for these cars are mandatory, but the question remains which is better, comprehensive or third party car insurance.

Though this question is valid for all vehicles, let us now discuss it with respect to luxury car insurance.

Need for Insurance for Luxury Cars

When it comes to the need for insurance for a luxury car, the first reason is that third party car insurance is mandatory as per the Motor Vehicles Act, 1988. This implies that all vehicles moving on the Indian road must have third-party insurance, which ensures there is no liability if there is any damage or luxury to a third party.

The need for comprehensive insurance arises for luxury cars because apart from the third party, this also includes own damage. Any damage or repair to any part of the luxury car is expensive. Most of the parts of a luxury car are expensive; thus, if there is any damage, the expenses are very high. If the car is insured, the insurance company will pay most of these expenses.

Cost of Insurance of a Luxury Car

The insurance pricing of any car depends on the following factors and thus, is the same for this segment of vehicles as well:

● Model of the car

● Manufacturer of the car

● Location of purchase

● Age of the vehicle

● No claim bonus

● Claim history

Once all these details are available, the pricing will also be determined by the insurance plan taken, like if only third party car insurance is taken or comprehensive and also the add-on coverage that is opted for.

Why is the Insurance of a Luxury Car Expensive?

Luxury cars are expensive, and this is the main reason why the insurance for these is expensive is the same. The car's insurance depends on the price, called the Insured Declared Value or IDV. This is the maximum price the insurance company will pay for the car if there is a total loss, like in a theft case. As the price of the luxury car is more, the insurance for these is also expensive compared to a standard car.

Tips to Keep in Mind before Buying Luxury Car Insurance

Having only third-party car insurance is not the right choice, especially when it comes to luxury cars which are very expensive, and so is their repair in case of damage. Thus, buying comprehensive insurance is the right choice. While buying insurance, there are some basic things that should be kept in mind to ensure you get the right coverage at the right place. Some of these things are:

Choose Coverage & Add-on Carefully

Firstly, choose the coverage needed carefully, and then choose the add-ons which you will need and are appropriate for you. Taking add-ons

without putting your mind to it can either cause unnecessary spending or not having the right coverage. Both these scenarios are not good in the long run. Add-on covers are the coverage for things that are not covered or excluded in a standard car insurance policy. You should know about all options and choose the ones needed. Some good add-on covers are, return to invoice, engine protection, roadside assistance, and zero depreciation. Let us talk about these in short:

1. Roadside assistance:

This helps you in case you are stranded in the middle of the road. The insurance company sends a mechanic and, if needed, tow it away.

2. Engine Protection Cover:

If there is damage or fault in the engine of a luxury car, be prepared to pay a heavy amount for the repair. If there is an engine protection cover, the insurance company bears all these expenses.

3. No Claim Protection:

In simple terms, a no-claim bonus is like a discount that the insurance company offers if there is no claim in the year. But if there is a claim, this discount is not applicable. If you have opted for the no claim protection cover, then the bonus stays intact and you can claim it even if you have taken a claim.

4. Return to Invoice Cover:

The IDV can be less than the invoice value, and the insurance company is only liable to pay the insured declared value at the time of a claim. But if you have the add-on cover of return to invoice, then you will be paid the invoice value if there is a total loss.

Calculate Your Premium

There are car insurance premium calculators available, and you can calculate the insurance premium for the car. This will give you a sense of the premium that you will need to pay, and if it is more than you can afford, you can change the coverage or the add-on chosen and see the impact of the premium. This will also help you to decide which add-ons are needed and avoid unnecessary ones.

Compare Policies

Before you pay the premium, always check the policies of a few insurance companies to see the premium charged and the coverage offered. These two are very important aspects of any insurance policy and, thus, cannot be taken lightly. One needs to be sure of what they are opting for and the price they are paying for.

Insurance for any vehicle on the roads is essential, and when it comes to a luxury car, there is no debate on it. Though third party car insurance is mandatory by law, comprehensive insurance is the best choice. Luxury cars are known to be luxurious because of the features and quality; all of these come for a price. Any damage and repair to these cars can be a big financial strain after spending a huge amount on purchasing the same. So, be informed and choose wisely so that you can take care of your dream car.

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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