If you own a car, you are definitely aware of the fact that a car insurance policy is mandatory for your vehicle. However, most of us treat a car insurance policy as something which is just mandatory. We usually end up making the premium cost of the policy the only factor of decision-making and more often than not, we end up getting a policy which does not provide enough coverage for the car.
Buying the right car insurance is very important. Here are a few things to keep in mind while choosing your car insurance policy. Checking the boxes for these will make sure that you make the best out of your insurance policy and keep your vehicle adequately protected.
Identify The Different Types Of Insurance Policy
Vehicle insurance policies are of two types – Third-Party Liability Policy and Comprehensive Coverage Policy. A third-party liability policy is a bare minimum that you need to be able to drive your vehicle on public roads. The Indian Road Safety Act and Indian Motor Vehicles Act mandates the issuance of the insurance policy for a vehicle to be able to ply on the roads. However, as the name suggests, the former provides coverage only against the losses incurred by a third-party. It will not cover any damages incurred by you or your vehicle.
A Comprehensive Coverage Policy, on the other hand, provides coverage against a host of things such as third-party losses, own damages, loss of vehicle, accidental benefits, and so on.
Compare And Buy
Once you have decided on the type of insurance policy that you need, it is advisable to compare the offers available in the market. There are a number of online platforms which allow you to compare the features, benefits, and premium costs of the policies. Comparing the offers gives you a better idea of the different offerings and thus, it becomes easier for you to choose an insurance policy for your vehicle.
Usually, a third-party liability policy is provided by the automobile dealership at the time of buying the vehicle. The premium for the same is included with the price of the vehicle. You can also pay the difference and opt for a comprehensive cover at the same time.
Look Into Personal Accident Cover And Additional Covers
Even though you might have opted for a comprehensive cover, you might want to enhance the policy with certain additional covers. For example, a personal accident cover helps you gain sufficient protection against any kind of disability or physical loss which might arise in the unfortunate event of an accident. In addition to that, you can also assess the risk factors which are associated with your driving style and buy some add-on covers for better protection.
Lookout For The Words “IDV” And “NCB”
IDV stands for Insured Declared Value. The premium cost for your car insurance policy will be directly linked to the IDV of your vehicle. By definition, IDV is the maximum amount of claim that you can place against the insurance policy. The IDV depreciates with every passing year. It is not always recommended to go for the highest possible IDV as it is likely to turn up the premium cost to a great extent. However, it is recommended to choose a policy after comparing the offers and choosing an optimised one which will offer a fair IDV along with a reasonable premium cost.
NCB, on the other hand, stands for No Claim Bonus. The NCB is an additional discount which is offered by insurance providers on the premium at the time of policy renewal. The NCB will be applicable if you do not raise any claims during the previous policy tenure.
Be Aware Of What Can Make Your Insurance Policy Void
Many like to make their rides stand out in the crowd, owing to which they tend to make a lot of changes to the vehicle. Some prefer only cosmetic changes for the vehicles which do not usually affect the insurance coverage. Others might want to go for full-blown performance kit modification which might not be covered under a standard insurance policy. It is advisable to get in touch with your insurance provider before getting the car customised.
It is essential to get a car insurance policy which suits all your requirements and thus, it is always better to compare and buy the same.
The author is CEO, BankBazaar.com, India’s leading online marketplace for loans and credit cards.