It is quite common to see people ignoring the details while buying car insurance. Proper awareness regarding the major clauses with regard to insurance Coverage could help you take the right decision. Five things that you need to be watchful for while buying insurance are –
1) No-Claim Bonus – Insurance companies have a scheme to reward drivers with a good driving record. Those who have not filed for an insurance Claim during the tenure of an insurance Policy are eligible for a no-claim discount on their renewal premium. The discount is eligible on the Premium you pay for buying Risk cover against ‘Own Damage’. The discount is progressive and increases with the number of consecutive claim free years of insurance coverage. For the first claim free year, you are eligible for 20% discount, and if it is two consecutive years, the discount is 25%. The discount increases and you can get upto 50% discount if you have five consecutive claim free years. You are eligible for the NCB discount, even if you buy a new vehicle or renew your insurance before the expiry of your existing one from another insurance provider.
2) Voluntary excess – If you are a confident driver, and you wish to pay a lower premium, insurance companies have a clause under which you can significantly lower your premium liability, you can opt for a voluntary excess or Deductible - this is over and above the compulsory excess. A compulsory excess is the minimum amount payable by the Insured in case he files a claim against his insurance. The compulsory excess is usually INR 1000 for private cars not exceeding 1500 cc, while it is INR 2000 for private cars exceeding 1500 cc in capacity.
3) Renew your insurance before it expires
Make it a point to renew your insurance before the expiry of the existing one. Any delay beyond the expiry, besides exposing you to the risks of loss of coverage in case of Accident would also affect your renewal premium, as you may not be able to get a discount for the no-claim bonus.
4) Be selective when it comes to add-ons
Insurance providers offer optional risk coverage which is not included in the basic coverage. You may not need all or either of these add-ons. Ensure that you are aware of which add-ons you may be charged for. Some of the most common add-ons that insurers provide include zero Depreciation cover, invoice price cover, medical expense cover or hospital cash cover. There is a good chance that you would already be having coverage for some of these add-ons through an alternate policy, hence make an analysis before you pay for these.
5) Do not automatically renew with the existing insurance provider
Car insurance is a competitive space and you are likely to encounter multiple prices offered by different insurance provider for the same risk coverage. Hence, it makes sense to evaluate your options and buy cheap car insurance
that suits your needs. You can use insurance comparison websites to purchase online car insurance. This will provide you with a fair and transparent comparison between various insurance providers.