6 Questions that will help you buy the best car insurance policy
Purchasing car insurance is not a decision to be taken lightly - it is crucial to assess your needs and the various insurance plans that are available in the market to pick one that best suits your needs.
Asking these questions can ensure you get the ideal car insurance plan
To know how, where, and when to buy car insurance, here are some questions you should know the answers to:
What is a car's IDV, and how is it determined?
IDV or the Insured Declared Value of your car is the sum insured or the maximum amount you will get in case of a claim. Since every motor vehicle depreciates over time, your IDV will keep changing over time. This is why insurance companies calculate the IDV every time you purchase or renew a plan to calculate your car’s true worth and provide an adequate cover for any damages caused to it.
A car’s IDV can be calculated with the following formula:
Showroom price of the car + cost of accessories (if any) – depreciation value (As per IRDAI).
Bear in mind that the IDV for a new car would be higher (as it has not undergone depreciation yet) and so would its premium. Conversely, the older the vehicle, the lower will be its IDV and premium.
Why is it important to get comprehensive coverage?
As per the law, only third-party insurance is mandatory. Such plans cover loss and damage incurred by a third party in case of an accident. However, comprehensive coverage offers you better protection against any financial liabilities in case of an accident. A comprehensive car insurance plan could include damage/loss caused by natural calamities like floods or cyclones, as well as human acts like theft, robbery, terrorist activity, etc. It also offers benefits such as personal accident cover, zero depreciation cover, etc. which can be availed at a nominal addition to your premium.
What is NCB, and how is it useful?
NCB or No Claim Bonus is an essential factor to be aware of if you wish to know how to save on car insurance. It is a discount the insurance company offers you on the policy premium if you make no claims each year. It is a way for insurers to judge how responsible you are as a driver. If you make no claims, it reflects how safely you drive and how good you are at taking care of your vehicle. This presents you as a low-risk candidate to the insurance company. However, there are a few claims you can make over the year that will not affect your NCB, so make sure you check with your insurer as to what those are.
An important thing to know about NCB is that it is associated with the driver (you) and not the car, so it can be transferred to a new policy when you buy a new car. You can get up to a maximum of 50% NCB, which you can claim while renewing or transferring your policy.
What are add-on covers?
Add-on covers are riders that can be bought to enhance your existing insurance plan and provide additional coverage. Some popular riders include:
- Key loss cover in case you lose or damage your car keys.
- Replacement for loss or damage to your personal belongings if they are damaged due to a covered accident.
- Engine secure cover to offer protection against any damage to your car’s engine.
- Roadside assistance cover for emergency services like a mechanic consultation, refuelling, towing, flat tyre assistance, etc.
- Depreciation reimbursement cover to claim the real value of your car and not its depreciated value.
Add-ons can be purchased at a nominal cost that is paid along with the premium of your insurance policy. It may seem like an unnecessary expense, but it can save you a considerable amount over the years.
Where to buy car insurance?
It is possible to purchase car insurance online and offline. No matter the method you choose, pick a policy only after comparing them based on your needs, budget and preferences. Make sure you pick an insurance company that is dependable and has a trustworthy brand image, such as Tata AIG and its car insurance plan.
Why is the Claim Settlement Ratio important?
The Claim Settlement Ratio (CSR) of an insurance company shows the percentage of claims that have been settled out of total registered claims. It’s important to know this so that you know the probability of your claim being approved or rejected, and it is ideal to choose a brand that has a high CSR.
As long as you understand the basic questions covered above, you will know how to buy car insurance and be able to pick a policy that offers you complete protection against all possible contingencies. So, #ThinkAhead and choose a policy that will offer you and your family the protection you need.