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Buying New Car Along With Car Insurance

By Vikas Chandra Das
21 July 2022, 11:46 AM

Buying a new car is nothing short of a big dream for many, and when it finally happens, it sure turns out to be one of the most exciting days of one’s life. Be it a hatchback, sedan, SUV, or a luxury car, buying a new car is a personal milestone that many people have. One thing which you should not forget amidst all the excitement is car insurance. You need to be very careful while buying car insurance with the whole process being dealt with a level head. So, to help you out, we have listed a few points that you need to keep in mind while buying a new car and corresponding car insurance.

Factors to Consider When Buying a New Car

You should never forget that the premiums of your car insurance depend on the type of car you buy. Therefore, it is important to look for ways to bring down the price of the premiums. Here are a few ways to do that -

  • Install anti-theft devices: While buying a new car, make sure that you install anti-theft devices in it. Proximity sensors and a break-in alarm system are just two of the basic devices that you should have. This will automatically bring down the premiums to a certain extent. Just like what happened with Roshini when she installed an anti-theft device in her car and informed about the same to the insurance company. Thus, on her next policy premium, she got a discount from her insurer.
  • Refrain from any major modifications: You have just bought a new car, so everything should run smoothly. Therefore, there should not be any need for major modifications. Go for the company-fitted sound system and do not make any alterations to the engine to make it more powerful. All these modifications and changes will add to the price of the premium, so be wary about that. Moreover, make sure that you inform the insurance company about the modifications you make to avoid any settlement issues later on.
  • Purchase a car that suits the terrain you are living in: It is very important to make sure that you buy a car that suits the terrain you live in. If you live in mountainous terrain, the ideal scenario would be to buy a 4x4 car, so that you avoid basic riding mistakes and accidents. This way, you need not make any insurance claims and enjoy No Claim Bonus benefits.
  • Choose the type of car wisely: One of the things that people often forget is the high premiums that come with luxury cars. Yes, you can buy them but be very sure about whether you will be able to pay the high premiums. The type of car you buy becomes a big deciding factor in the kind of premiums you will end up paying later on.

Why is Insurance a Must for Your New Car?

Do you know that 55 accidents occur in an hour in India? Yes, it is a number that is not too comfortable to digest but it is true! It includes both minor and major accidents. The damages that happen to you and your car and the financial loss you would have to bear can get a bit too much at times. This is where insurance is a must for your new car so that you do not face a financial brunt if you get involved in a car accident. Moreover, the government of India has made it compulsory for every car owner to have a valid car insurance policy. If you drive the car without insurance, then there will be a hefty fine imposed on you.

Factors to Consider When Buying a Car Insurance Policy for the First Time

  • Terms to understand: There are a lot of terms that you need to have a clear idea about so that you know all the details about the car insurance you are buying. Here are a few major terms that you must definitely know.
    • OD: Own Damage premium covers the damages done to your own in an accident. It is different from a third-party liability plan, which only gives compensation for the damages done to the third party.
    • NCB: No Claim Bonus is the kind of a gift that you get for a claim-free year. You get a discount on premiums for the next year.
    • Add-on: Add-on is the additional benefits that you can include in a car insurance plan. Roadside assistance, engine cover, and invoice cover are just some of the examples of the long list of add-ons that you can have.
    • Depreciation: Depreciation in car insurance means the drop in the price of the vehicle and its spare parts that the company calculates. As each part wears out over a period of time, the value of the same decreases. Therefore, the claim settlement you get is according to the depreciated value.
    • Voluntary Deductible: It is the amount of money you are ready to pay out of your own pocket during a claim settlement. The higher this is, the lower will be the premium.
    • Claims: Claim is the formal notification to the insurance service provider about the loss you have suffered. It depends on the kind of accident you have been in.
    • IDV: Insured Declared Vehicle is the maximum amount that your insurance service provider is ready to pay in case of your car is completely damaged or is stolen.
    • CSR: A customer service instructor plays one of the most crucial roles in you and your purchase of car insurance. He/she is your first point of contact, regarding anything related to car insurance. For this service, you will have to pay a certain amount of commission cost.
  • Choosing between the right policy type: The most important thing to do while buying car insurance is to select the type of policy you want. The two major types of car insurance are third-party car insurance and comprehensive car insurance.
CoverageProvides cover against only third-party damages.Provides a wide coverage for damages done to you and your car, along with the third-party damages.
PremiumsThe premium prices are low.The premium prices are high.
CustomisationYou cannot really customise the plan. You get what is there.You can customise the plan as per your needs, thanks to numerous add-ons that are available.

Ideally, you should always prefer the comprehensive car insurance plan over the other, as it provides you complete care even though the prices of premium are slightly on the expensive side.

  • Choosing the appropriate add-ons: Make sure that you only buy add-ons that make sense. Since there are a wide variety of add-ons available in any plan, you need to be careful about choosing the right ones because with every add-on, the prices of premium soar.
  • Comparing products online: Never buy insurance without comparing, and what better way to do that than going online. You can easily compare between multiple insurance plans online, without the need for an insurance agent of CSR in between. Moreover, with the right insurance calculator, you just need to put in the details, and you will get the ideal options just for you.
  • Choosing the pay-out method: Make sure that you choose the right pay-out method, be in the form of the lumpsum amount or monthly benefits. Similarly, you need to choose the method of premium as well.

Car insurance is a must for a new car, and for that, you need to go through various factors before finalising the deal. We are sure that this guide on choosing the right car insurance will help you with the same. Choosing the type of insurance plan and the add-ons should be the two most important things to keep in mind. Nonetheless, make sure that you compare multiple options online and only then make the final decision.

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