Car Insurance

Factors to Consider Before Choosing a Long-term Comprehensive Policy

By Juhi Walia
May 11, 2021

A car owner has numerous options to choose from while purchasing car insurance – ranging from a simple third-party insurance plan to an own damage cover to a comprehensive cover. All these options are available as annual plans as well as long-term insurance covers. Interested to know about the latter? Read on!

What is a long-term comprehensive policy?

A comprehensive car insurance policy is a wide-ranging, inclusive cover that offers the insured protection for the damages caused to the car as well as covers for third-party liabilities. It protects the automobile from natural disasters such as floods, earthquakes, etc, and from theft of the vehicle. One can opt-in for add-ons to enhance coverage of the policy. This can be purchased for a time period of three years making it a long-term policy.

The advantage of taking such a policy cover is that the premium rate will be the same for a period of three years and the price hikes that happen on an annual basis will not be applicable to you.

What are the factors to consider before making the deal?

One must factor in a wide range of considerations before sealing the deal. They are highlighted as follows–

  • Ownership: The period for which you will have your car in your possession will be a material factor in deciding whether to opt-in for a long-term policy or not. Selling a car during the tenure of the long-term policy will not be beneficial for you and will result in the loss of the said cover. A long-term policy will make sense if the car is there with you at least for the tenure of the policy.
  • Add-ons: Add-ons lead to customisation and comfort, but oftentimes with the passage of time, these add-ons lose relevance or importance. For example, owning a passenger cover is a good choice when you travel with your spouse to work or share the car with fellow passengers on your ride to the office, but will cease to be of use when you change your job and no longer have people accompanying you in your daily commute. Similarly, a road assistance cover is a good option if you frequently make long trips with the car but is of no use if you use your car once in a couple of months. Such a long-term policy is not beneficial in monetary terms.
  • Additional features: Keep a lookout for the various features that are given by insurers and choose the features that benefit you the most in these long-term policies.
  • The credibility of the insurance service provider: The credibility of the insurance company is of utmost importance at every step of your interaction. The purchase of the policy must be simple and easy, the renewal process completed in no time, and the claim-related process must be stress-free – all of which can happen if you have chosen the right insurance service provider. As it is a long-term policy, there is little chance to opt-out in case the services are unsatisfactory in the three-year period.
  • Car insurance comparison: Such a process of comparison of the different policies available, the premium amounts, the terms, and conditions, etc. must be done to see if investing in a long-term policy offers more benefits to the policyholder than an annual plan.

FAQs about long-term comprehensive policy

1. Can I renew a long-term policy?

A long-term insurance policy can be renewed like all other insurance policies. In this digital age, one has the option of renewing the policy online in a quick and efficient manner.

2. Where can I clarify doubts about the long-term comprehensive policy?

There are numerous means by which one can clarify his or her doubts regarding the long-term insurance cover –

  • Contact the insurer via their toll-free number or customer care number.
  • Contact the insurance company via email (the details of which will be provided on their official website).
  • Ask your insurance agent for clarification.

3. Is roadside assistance an add-on feature?

An insurance policy can offer roadside assistance as a part of the policy or as an add-on. The cover guarantees services such as emergency services, towing, refueling, resolving technical issues, change of flat tyres, etc., all year round, 24/7. The insurance company sends the concerned person at the site where the assistance is needed and goes a step further to offer emergency accommodation and allied utility benefits if the insured is stranded in a desolate location with no alternate arrangements in place.

4. What effect does a long-term policy have on the premium?

The premium rates will be decided by the insurance company and not the Insurance Regulatory and Development Authority of India like in third-party policies. The premium changes for the own damages part of the policy and the add-ons will affect the premium rates of the long-term policy.

Conclusion

Ensure that your investment in a long-term policy is need-based and augments your financial portfolio by offering comprehensive coverage. Conduct the necessary background check and due diligence on the insurance company and the policy before taking a decision about the purchase of the policy.

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Juhi Walia
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