Buying new car insurance can be confusing. As a new car owner, this might be because you must be so overwhelmed with the process. Well, you must understand that car insurance is a contract between you and the insurance provider. Here you have to pay a premium of a certain amount for a fixed period, and the insurer will cover the damages caused to your vehicle in case of an accident, natural disaster, theft, etc. With the advancement in technology, buying new car insurance online is easier with only a few clicks. But before that, there are certain things you must know about a car insurance policy in India.
This article will discuss the five tips you should know to buy the best car insurance.
5 tips to buy the best car insurance for your new vehicle
It is important to know the right tips before buying new car insurance. We have curated a list of 5 tips to find the best car insurance for your new vehicle –
- Compare the car insurance policy: It is very important to compare car insurance online. By doing so, you will understand the features, advantages, disadvantages, exclusions, and inclusions of different policies. Buying a policy that offers you the best value for your money will also be easier. In addition, it will also help you know the discount provided by every insurance provider, which will ultimately help you save money.
- Look for a comprehensive plan: A comprehensive offers you extensive coverage and is the most preferred car insurance policy. This is because apart from covering you from the third-party losses, it also covers the damages caused to your vehicle. The primary advantage of picking a comprehensive insurance plan is that it protects your car from any unfortunate damages and losses caused by an accident, natural disaster, theft, or fire.
In addition, the premium for a comprehensive car insurance policy is quite high compared to the third-party insurance plan. But it is worth the premium because you get broader coverage and several other benefits, such as breakdown assistance, zero depreciation cover, and many more.
- Buy add-ons: Add-ons and a car insurance policy help you cover several damages. You are wrong if you think that comprehensive car insurance can cover all aspects. A comprehensive plan does not cover the cost of no-accidental damages such as damage to car tyres. Hence, you can buy add-ons from your insurance provider at the time of buying new car insurance. Some add-ons are – tyre cover, engine cover, NCB protector, return to invoice cover, and many more.
However, it is important to understand what add-ons you require. You can talk to your insurance provider, who might help you with the necessary covers.
- Check the CSR (Claim Settlement Ratio) of the insurance company: The claim settlement ratio is the total number of claims settled by the insurance company to the total number of claims raised in the financial year. It serves as an excellent indicator of the claim settlement rate of the company. It also tells you about the insurance company’s financial stability because you do not want to go through the hustle-bustle of the claim process when you are already stressed. Moreover, an insurance company is more unlikely to breach its compensation agreement if it has a significantly high CSR.
- No Claim Bonus (NCB): No claim bonus is a discount given to you by the insurance provider if you drive safely and make no claims during your policy period. This is considered a reward given to you for your safe driving habit. The major benefits of no claim bonus are –
- The insurance company will offer you a discount when renewing the policy, which would help you save some pennies. This means you will have to pay less than the premiums you would have to pay if you had raised claims for damages incurred.
- If you do not raise claims for consecutively five years and renew your policy within the deadline, you are entitled to a massive discount on the policy renewal for several years.
- NCB is transferable. If you have not raised any claims during the policy period, you can carry forward the NCB if you plan to buy a new car and sell the existing one. It is also transferable to another insurer if you plan to switch.
Some additional tips for buying the best car insurance for your vehicle
Below are some other tips that will help you buy a new car insurance plan –
- Choose an online insurance provider, as it will help you understand the plan by comparing and going through all the policies simultaneously.
- Evaluate the cost-to-feature ratio of a policy before finalising one. This will give you a better estimate of the value of your money.
- Avoid raising claims for certain scratches and minor damages, as it helps you get up to 50% of the discount when renewing the policy.
- Lastly, ensure the insurance provider has network garages so that you can opt for a cashless claim facility. This will help you save money, and the settlement will be done between the insurer and the garage.
Now that you know the tips to buy the best car insurance policy plan, you can make an informed decision so that you can save your money and choose the plan suited according to your needs. Though many insurance providers offer tailored plans, consider comparing them to see if they are all you need. Moreover, you can add some riders or add-ons to get extra coverage, though the premium for those plans would increase slightly. But it would be worth it.
Disclaimer – The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.