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Factors to Consider When Buying a Car Insurance Policy

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The authorities in India have made it compulsory for you to get a car insurance policy as soon as you get a four-wheeler. In other words, you cannot drive a car on the streets of India unless the vehicle is insured. This is why you need to buy the best motor insurance plan for your car. While it is a legal mandate, getting car insurance is a good idea also because the cover keeps you and your vehicle protected in the best possible manner. There are many car insurance companies that offer very good policies. You need to compare car insurance to find the best option. However, when choosing, look beyond the premium, as the cheapest plan isn't always the best plan.

Factors that affect the premium of a car insurance plan

There are various factors that are responsible for the premium you pay for your car insurance policy. These include the number of add-on covers you have, the type of policy you own, the deductible amount, etc. You should be very careful about the small components within your car insurance plan to ensure you have the best cover. Even if the premium you pay is slightly high, you should not worry too much about it.

Lack of add-ons

Riders are add-on covers that you can attach to your car insurance policy. These add-on covers prove to be very beneficial as they enhance the scope of your overall motor in coverage. You need to pay extra for every rider that you choose. Some of the common car insurance riders include the

● Engine protection rider

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The engine of your vehicle is generally not covered under a comprehensive car plan. If there is any damage to the engine due to an accident, flood or a natural calamity such as an earthquake, you cannot make any claim. However, when you have the engine protection add-on cover, all the issues related to the car’s engine get covered too.

● Roadside assistance rider

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If your car suddenly breaks down in the middle of the road, all you have to do is call your insurance provider and assistance will reach you. A mechanic will fix the issue, and if that doesn't work, your car will be towed to the nearest garage. These benefits would be available when you purchase the roadside assistance rider along with your comprehensive car plan.

● Personal accident rider

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As the policyholder, if you die in a road accident, the insurance provider will pay a death benefit to your nominees. This is an important rider that you should get in order to secure the financial wellness of your loved ones after you are gone.

● Zero depreciation rider

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In an attempt to lower the bike insurance premium, many people drop the essential riders from their car insurance plans. This is an unadvisable practice. While the extra premium may be a concern, the extra coverage you get is priceless and proves to be very handy in the long run. So, think twice before you let go of the add-on covers simply to lower the car insurance premium!

Poor-after sales support

You need to be very careful when choosing a car insurance policy as the deal doesn't end with you paying the premium and buying the plan. Your association with the insurer starts at that point and this association can be of immense significance, especially when you make claims. A good motor insurance company has a good customer support team who always helps you. Their claim process is smooth and transparent too. They offer excellent after-sale services. You need to get the motor insurance policy from such an insurer, even if you have to pay a marginally higher premium. If you simply check the premium and buy the plan from any random insurer, you may face poor after-sales services and that would lead to several problems in the long run.

Higher Deductibles

Another important factor in deciding the car insurance premium is the deductible. The deductible is an amount that you, as the policyholder, pay at the time of a claim. It is a pre-decided amount. If your deductible is high, the premium will be lower and vice-versa. Choose a suitable deductible amount. Do not make the mistake of going for a higher deductible just to lower the car insurance premium. Doing so can prove to be very costly in the long run.

Inadequate coverage

As mentioned above, the premium of the car insurance policy also depends on the type of cover you choose. If you have a comprehensive plan, the premium will be higher as compared to a third party plan. However, getting the best and the highest possible cover is important. This holds especially true if you have a new and expensive car. When the car is old, you may opt for a basic third party plan, but do not compromise on the cover when you have a new car. If your vehicle gets involved in an accident, or if it is damaged or stolen, you will have to make a claim for the expensive repairs. Having substantial insurance coverage would prove to be helpful and economical at such a time. If you choose a third-party plan just to save on the premium, you will end up paying a much higher amount for the repairs. Therefore, look to get the correct type of motor insurance for optimum coverage.

Conclusion

Keeping all the points mentioned above in mind, you can surely understand just how important it is to get the correct car insurance policy. Never buy the cheapest plan without assessing the features it has on offer. Your ideal policy should be economical while being wholesome as well. Get some riders as they add some crucial benefits to your coverage. Also, adjust the deductible amount in a practical way. Do not forget to choose the insurance provider that has a good reputation among its existing clients with respect to customer support and after-sale services. Get a good car insurance plan after analysing these factors and you will surely have the best and the most appropriate vehicle insurance plan for your precious and beloved four-wheeler.

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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