Do Older Cars Need Comprehensive Car Insurance?

Posted on: Aug 2, 2023 | | Written by:

Do Older Cars Need Comprehensive Car Insurance?

Published on July 31, 2023. EST READ TIME: 3 minutes

Having an older car in the house can offer a lot of benefits. For starters, you might have a lot of attachments and sentiments associated with it and a ton of memories as well. And if they still perform well and do what they are supposed to do, there isn’t, particularly a reason to change them. And most importantly, as a car gets older, its maintenance also reduces to a considerable extent, including old car insurance.

For those who are wondering whether their old car needs comprehensive car insurance or not, here is all that you need to know.

Prominent reasons to consider comprehensive plans for older cars

According to Indian laws, all vehicles must have at least a third party liability policy on them. Failing to have one will result in a penalty at the minimum and a lot of potential financial risk. Having comprehensive insurance can prove to be more than useful even for your old car. And here are some prominent reasons for it.

1. Third party cover

Comprehensive insurance plans include mandatory third party cover. In simple words, the policy has your back, if your vehicle is involved in an accident that involves third party individuals or vehicles.

2. Protect your finances

Even though your car is a bit old, it is still susceptible to damage and will require repair jobs. And not having a comprehensive plan will result in you ending up paying for the expenses out of your pockets. A comprehensive insurance plan will safeguard your finances in such occurrences. You no longer need to worry about hefty repair bills.

3. Add-ons

A big perk of comprehensive insurance plans is that you can opt for add-ons along with it. By selecting the right add-on, you can opt for a more robust plan by paying a small premium. Depending on your car and your needs, you can choose the right add-on. Add-ons such as roadside assistance and engine protection cover might be more viable for an older car. If your car isn’t too old, you can even opt for a zero depreciation add-on. It will ensure that during claims, you do not end up paying anything from your pockets.

4. Additional protection

While looking for old car insurance, one must consider the possibilities of other risks such as theft, vandalism, burglary etc. And a mere third party policy will not offer these. A comprehensive plan, on the other hand, will ensure that you get compensated if your car is stolen and cannot be recovered.

Factors that impact the policy premium

When buying old car insurance, there are a few factors that can influence the policy premium. The following are some of them.

1. Policy type

The type of policy that you choose for your car will decide the premium that you might have to pay. For example, a third party liability policy will be lighter on your pockets, albeit lower coverage. While a comprehensive plan will offer better coverage but at a slightly higher premium.

2. Car details

Your car’s manufacturer and model also play a role in deciding the policy premium. Even with older car insurance, a top variant will fetch a higher premium over a base variant. Insurance companies also look at the fuel type. A diesel engine car will translate to a higher premium than a petrol variant and likewise, a CNG variant will also result in a higher premium.

3. IDV

IDV in car insurance is the insured declared value of the car and is one of the leading factors that decide the policy premiums. It must be noted that the IDV value reduces with age, as depreciation kicks in. Thus, the IDV of the car will reduce for an older car.

4. Add-ons

Should you choose to buy add-ons with comprehensive insurance, it will increase the policy premium by a small margin, based on the add-on that you select.

5. Car registration

The RTO where your car is registered also plays a vital role in deciding the policy premium. If you live in a tier-1 city, you will almost certainly end up paying a slightly higher premium than someone having a similar car in a tier-2 or tier-3 city.

Factors to consider while buying old car insurance

While buying car insurance online , there are a few factors that you must keep in mind. The following are a few such factors.

1. Requirement

You must choose the policy type based on your requirements. If your old car is majorly parked and used only once in a while, it would make sense for a third party liability policy. however, if you are someone who frequently uses their car, comprehensive insurance would be a more sensible pick.

2. Cashless benefits

When you opt for comprehensive insurance, you can get the car repaired at a network garage in a cashless manner. For example, if your car needs repair and the final bill is Rs. 15,000 and the insurance provider agrees to settle Rs. 12,000, you will need to pay only the difference of Rs. 3,000 to the garage. The insurance provider will settle the remaining amount directly with the garage.

3. Insurance provider

It can be a sensible choice to look closely at your insurance provider before zeroing down on the purchase. Look for credible insurers that have a proven track record. You can consider the claim settlement ratio of an insurance provider for that matter.

Conclusion

Even though your car is a bit old, it deserves all the attention and care. And opting for comprehensive car insurance is one of the better ways to handle an ageing car. The policy will safeguard your finances and protect your car against all the risks.

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

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