“Speed thrills but kills”, “speed is a knife that cuts lives”, “hurry makes worry”, and “three enemies of the road: liquor, speed, and overload” – are the warning signs that often welcome us on Indian roads. The negligence on roads has cost several lives and it is vital that we are responsible and vigilant on the roads, following all the rules prescribed by law!
What is Third-party Liability Car Insurance?
Third-party motor insurance is mandatory as per the Motor Vehicles Act, 1988. It is liability insurance that provides the owner of the automobile protection against the claims of another party. Third-party insurance guarantees only a basic level of protection to the insured.
What is a Comprehensive Cover Plan?
This insurance policy covers eventualities such as theft, third-party claims, riot damage, arson or vandalism, natural disasters, etc, and combines the best features of first and third-party insurance covers.
The benefits of a comprehensive policy are –
- Covers both own damages and third-party liabilities.
- Also, the insured can claim a no claim bonus at the end of the term in case there have been no claims made against the policy.
- The insurance policy will also provide basic legal assistance (including basic investigation and verification) to the insured.
Dos While Buying a Car Insurance Policy
Compare Online Before Buying
Ensure that you compare the terms and conditions of different policy documents – the key information that one must look out for includes the premium charged, term of the policy, benefits offered, deductibles, and add-ons.
Check for Add-ons
Additional covers help customize your insurance policy and are useful in ensuring that your car gets a 360-degree indemnity. Add-ons such as zero depreciation cover, engine protection cover, consumables add-on, roadside assistance cover, etc, are important if it is a new car, fresh out of the showroom. These add-ons can only be availed for comprehensive car insurance policies.
Only Buy from a Reliable Insurance Company
A background check regarding the insurance company is a must. Trusted brands will ensure that they create value for customers and offer timely services, causing little or no trouble to the insured. Make sure that you check the claim settlement ratio of the company to know the number of claims that it settles in a particular year- a higher ratio indicates that a higher number of claims have been accepted and processed by the insurer.
Make Sure the Claim Settlement Process is Easy
This is best learned by doing two things – checking the entire process theoretically, by looking into the policy documents, and practically, by asking policyholders of the same insurance and getting to know their experiences during the claim settlement process. Collect as much relevant data as possible before opting for a particular policy.
Mention All the Details Including NCB Correctly
The NCB or No Claims Bonus is a benefit that the insured gets for having a claim-free year. Ensure that this is transferred in case you change the insurance policy by procuring an NCB certificate from your existing insurer. In case of renewal of the policy, ensure that the NCB amount is correctly written in the requisite documents.
Check for Available Discounts
Different insurers offer different kinds of discounts in order to attract customers. For example, purchasing a multi-year long-term plan might entitle you to receive a discount, or purchasing digital car insurance might result in the insurance company giving you a discount. Make use of these to reduce the overall costs associated with your car insurance.
Renew Car Insurance Before the Policy Expires
Technology might prove to be a real boon when it comes to this aspect of renewing one’s car insurance. Keep reminders and offer standard instructions to the bank to ensure that you do not default on paying premiums or renewing the car insurance policy.
What are the Don’ts While Buying Car Insurance?
Do not Settle for a Low-cost Insurance
The cheapest insurance might give you some short-term satisfaction of having purchased a policy cover for your car but will not serve its purpose when you are in real need of it. The cheapest coverage might even fail to provide you with the most basic of services. Always look out for the benefits and additional coverage offered by the insurance company before opting for the policy and not simply the cost.
Do not File Claims for Small Things
Filing a claim for small accidents must be avoided since there would be a loss of the NCB, a discount offered by the insurer at the end of the claim-free year. Most NCBs offered start at the rate of 20% for the first claim-free year and steadily rise to 50% maximum for every subsequent claim-free year thereafter. Therefore, in order to benefit from this, one may avoid making claims for every small dent or scratch caused to the car and instead choose to pay it out of one’s pocket.
Also, recurrent filing of insurance claims adversely impacts the claim history of the insured. This may result in an increase in the renewal premium rate.
Do not Let the Insurance Lapse
Renewing your car insurance policy will keep you out of trouble and prevent you from losing out on the NCB. In the case of a lapsed policy, the insurance premium will be calculated all over again, which literally means a policy with a high premium.
Do not File False Claims
Filing false claims might not just result in rejection but also vitiate the policy itself. Therefore, it is always advisable not to file a false claim as insurance companies are very particular or serious about the claiming procedure.
No amount of caution is sufficient when it comes to guarding things that are of value to you. Therefore, the choice of a car insurance policy requires careful consideration of the terms and conditions of the policy. It is prudent to keep these above pointers in mind and invest sufficient time and energy in this process before you invest money into it.