Car insurance coverage comes in different packages. It is perhaps easy to determine what you need to purchase by arriving at a comprehensive list of things that need to be protected. Most of us purchase a car insurance policy to guard against the financial damage that is caused in the event of an accident.
A car insurance policy has 3 basic purposes:
- Third-party coverage
- Vehicle damage coverage
- Personal Accident coverage
As per the Indian Motors Act, it is mandatory for a car owner to own third party coverage, while it is upon the discretion of the car owner to buy vehicle damage coverage and personal accident coverage. The type of coverage you take will have an effect on your car insurance premium. The more coverage you seek, the higher will be the premiums.
Since there are finer details in every insurance policy which are relevant and important for a hassle-free claims experience, here are some important things that you should check out before you buy a car insurance policy.
1. What is the compulsory Deductible and is there a voluntary deductible?
If you choose to buy a comprehensive cover that protects you from third-party liability and vehicle damage both, make sure that you check what the compulsory deductible for your policy is. A compulsory deductible is an amount that you need to pay out of pocket in case you were to file a claim for vehicle damage.
There is a chance that your agent may lure you with lower premiums by incorporating a voluntary deductible over and above the compulsory deductible in your policy. The voluntary deductible as the name suggests is the amount of money over and above the compulsory deductible that the Insured agrees to pay in case of a claim.
By agreeing for a voluntary deductible the liability of the customer in case of a claim increases. Insurance companies charge a lower car insurance Premium for those policies which provide for a voluntary deductible.
2. Check for the Insurer Declared Value (IDV)
In order to entice you with a lower premium, the agent may lower the insurer declared value for your car. You need to ensure the IDV is not less than what it should be otherwise. IDV is the maximum amount that you can claim in case of vehicle theft or complete damage that is beyond repair. IDV is generally calculated by deducting Depreciation from the previous year IDV. While hunting for the best car insurance deal your aim should be the highest IDV at the lowest possible premium.
3. Claim Settlement History
It is always wise to choose an insurance provider that has the best claim settlement ratio. Also, make sure that the company has authorized repair agents in your town who would allow you a hassle-free cashless claim.
4. A comparison of policy terms and premium
The car insurance market is competitive. If you make it a point to do an online comparison before buying car insurance you can perhaps strike a good bargain. Just going by the lowest premium offered is not correct as there are likely to be differences in the benefits that you are getting. For an apple to apple comparison hunt for the lowest premiums once you have finalized the features/benefits that you would need
While shopping for car insurance, make sure all the aspects of an accident are covered. The above-detailed checklist gives you an explanation of what is covered in your car insurance policy and what different policy parameters mean. Use this simple checklist to arrive at a comprehensive plan that is cost-effective and suits your vehicle insurance needs. Make sure you do comparison shopping before you finalize your policy.