Choosing the Car Insurance the Hard Way

I have understood the importance of having the right car insurance now. But this realization came only after making many mistakes.

I have always loved cars. I still remember how I stood in front of toy shops admiring those small cars. During my teenage days, I constantly nagged dad to let me drive his car. So, once I was settled after a job, my first big purchase was, naturally, my dream car. The buying process was lengthy, but I could not control my excitement when I got the keys of my first car. I must admit that I stretched my budget a bit, but it was worth the car. Being already out of the budget, I gave little importance to insurance and was in no mood to spend extra pennies on it.

Instead of going for comprehensive car insurance, I opted for a third-party cover. But it was my biggest mistake, as only a few months later I met with an accident. Although I escaped with minor scratches, my car was not that fortunate. I had to shell out plenty of money for the expensive repairs, and it left a massive dent in my pocket. So, if you are planning to buy car insurance, here are some mistakes you should avoid:

1. Not choosing adequate level of cover

There are two types of car insurance policies. First is the third-party cover, which is cheaper and offers minimal coverage, and the second one is a comprehensive cover which costs a bit more but provides extensive coverage. I went for third-party coverage without having an idea of what I will be missing out (I paid for this mistake as well). Hence, you should know what both the plans include and then select an adequate cover from the best of motor insurance companies in India.

Just like me, if you opt for third-party car insurance, you will be covered for the damages, injuries, and death caused to the other party in the event of an accident. However, you will not be given any help in case of damage caused to your own vehicle or injury to yourself.

However, a comprehensive car insurance plan will cover damage caused to you or your car (along with third party liability), in case of an accident. It will offer you a wholesome protection as it also includes damage caused by theft, natural calamity, fire, etc.

2. Not engaging in proper research

This was my first mistake while buying the insurance for my car (apart from saving money). You may feel that spending hours on research before you buy car insurance online is a futile task. But believe me, it is essential to find out about car insurance plans being offered by various motor insurance companies in India. Doing extensive research will help you compare these policies in terms of coverage, cost and benefits provided. Look for the following features while selecting your car insurance company:

  • A good claim settlement record
  • Extensive coverage
  • 24*7 customer support

3. Incorrect Insured Declared Value (IDV)

IDV is the amount you get in the event of a total loss or theft of your vehicle, and it is usually based on the car manufacturer’s listed selling price minus depreciation. IDV is mostly auto-generated by the insurance company, but you have the option to increase or decrease it by a certain percentage.

So, while making a claim, make sure the Insured Declared Value declared for your vehicle is correct. Although a higher IDV means higher premiums, a low IDV (to save premium costs) could result in higher financial liability in the event of a claim.

4. Ignoring Add-ons

Add-ons are the additional benefits you can avail by paying some extra cost. Even if you are required to shell out some money, these add-ons prove to be extremely helpful. For example, towing facilities, road-side assistance, and engine protector add-ons can provide support when you urgently need it.

5. Not reading the fine print of the car insurance plan

Failure to understand the policy document can leave you ignorant about specific clauses. So, check the insurance document and ensure that all details are mentioned correctly. Any error in your name, address, phone number, and vehicle number could cause significant complications during the claim process.

Conclusion:

Many people are ignorant about insurance and buy car insurance blindly, without even weighing its benefits and drawbacks. So, before signing the insurance document, read the terms and conditions thoroughly to avoid disappointment later. These simple things will not only save you the trouble but also more money than you can imagine.