When purchasing a new car, people take into account various factors such as colour, engine, features, mileage and price. However, it is also crucial to consider a suitable car insurance plan as it provides financial assistance for repairs in case of accidents or damages.
Car insurance plans have evolved in response to changing needs of customers. Incorporating several important aspects before making car buying decision can help customers. If you have purchased a new car and exploring insurance plans, the following are 10 key factors to consider:
Consider the Brand
Even if you’re not particularly fixated on brands, chances are you considered the make of the car when purchasing your four-wheeler. Similarly, take a moment to ponder on the insurer’s brand. If you resonate with their promises and values, consider sealing the deal and starting a new partnership by insuring your car with that company.
Compare the Brand
For beginners, it’s essential to actively gather details about the car insurance company and the plans you’re considering. Make sure to cross-check different plans offered by various insurers, compare them thoroughly, and delve deeper into each brand before embarking on a new partnership. This proactive approach will help you make a well-informed decision tailored to your needs.
Range of Cover
You have two options when purchasing insurance, you can either buy it just to fulfil the mandatory requirement or purchase it with the intention of saving money in case of mishaps and meeting legal obligations. Opting for the latter is usually the wiser choice.
When you invest in a Comprehensive Plan, you not only comply with the law but also secure insurance coverage for the inclusions specified in the policy. Additionally, you can enhance coverage further with add-ons.
Add-on Covers
When buying add-on covers, prioritise practicality. Consider these as small additions that you can attach to a Comprehensive Plan. Each add-on comes with its own price, which may vary insurer to insurer. Therefore, avoid splurging on add-ons. Select only those that hold importance to you. Otherwise, you might be shocked by your insurance bill.
IDV and Premium Relation
The Insured Declared Value (IDV) of a vehicle is akin to its current market worth. For instance, if a car was bought a year ago for Rs 7 lakh, its IDV after two years might decrease to Rs 5 lakh due to wear and tear. It’s not the same as its resale value.
Digital insurers let you choose IDV of the car to be insured from a given range. Opting for a lower IDV means you pay a lower premium to insure the car compared to paying more for a higher IDV. This means that the higher the value of the asset, the higher the premium needed to insure it.
Also Read: This Car Insurance mistake will cost you thousands of rupees
Claim Settlement Ratio and Reviews
The Insurance Regulatory and Development Authority of India (IRDAI) regularly updates the Claim Settlement Ratio of insurance companies on its website. This ratio, reflecting the number of claims settled compared to those raised, offers valuable insight into an insurer’s ability to handle claims.
However, it’s essential not to lean solely on this metric. Factors like fraudulent claims and documentation issues can skew the numbers. To get a more well-rounded view, consider checking out online reviews, testimonials, and hearing from peers about their experiences with the insurer.
Cashless Facility
In insurance, ‘cashless’ means you don’t have to pay upfront when settling claims. For example, if your car repair bill is Rs 10,000 and the insurer offers a settlement of Rs 8,000, they’ll pay Rs 8,000 directly to the garage. You’ll only need to cover the remaining Rs 2,000. This works because the insurer has partnered with the garage for Cashless Claim Settlement. So, insurers with lots of garage partnerships can offer this convenient cashless service.
Online Insurance
Even for individuals with a preference for traditional methods, procuring insurance online presents superior advantages. It outperforms the conventional offline approach in terms of pricing, convenience, and service provision. Online insurance companies operate with leaner infrastructure, reduced physical office space, and a smaller employee base compared to their traditional counterparts.
Consequently, this reduction in operational overhead enables them to offer policies at more competitive rates without sacrificing coverage quality.
Stress-free Claims
Merely providing low-priced policies is inadequate, insurers must also establish a reputation for facilitating stress-free claims. What is the value of acquiring a policy at an affordable rate if one encounters obstacles in promptly initiating a claim due to a convoluted claims process? Online insurers maintain an advantage in this aspect as well.
Policy Terminological Framework
Modern insurers prioritise simplifying the insurance process. Through responsive websites, user-friendly apps, and helpful customer service representatives, both policy seekers and holders feel less intimidated when purchasing or renewing car insurance online.
However, it’s imperative to actively read the fine print before purchasing a policy or submitting a claim. Insurance constitutes a contractual agreement, and understanding its terms remains paramount.
Conclusion
Car insurance is a vital aspect of responsible vehicle ownership, providing financial protection and fostering safety on the roads. With coverage options like liability, collision, and comprehensive policies, it shields drivers from unforeseen accidents and liabilities.
As technology progresses, insurance adapts to address emerging risks, ensuring the resilience of our automotive ecosystem. Despite costs and complexities, car insurance remains essential for maintaining security and confidence in driving for years to come.
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