Car Insurance

Things to Consider Before Buying Car Insurance Policy

By Admin
Apr 28, 2021

Buying car insurance can turn out to be an easy and hassle-free experience if you follow the right approach. There are some essential key parameters that you should always keep in mind before buying a car insurance policy. Doing so will make you enjoy a seamless journey.

So, without wasting any time further, let’s just know those important pointers below. 

Things to Consider Before Buying Car Insurance Policy

1. Policy Type: The most crucial factor before purchasing a policy is to know which type of policy is apt for you. Always keep in mind your needs and budget, take a final call. With various car insurance policies such as third-party, comprehensive and pay as you drive, you can select the type of policy meeting your requirements. Depending upon the type of policy you choose, your coverage, benefits, premium, and other factors vary. So be selective in your choice and choose a policy type that works for you.   

2. Premium: The moment you decide to buy car insurance, one thing which you cannot miss is the premium. It is the amount that you would be paying every month to your car insurance company. Thus, it is important that your hard-earned money should be invested wisely. 

Before buying a policy, it is important to ensure that your premium should be affordable so that you can easily continue paying the same.  Just like what Avinash did when he calculated his car insurance premium before buying a car policy. With the help of using the car insurance premium calculator, he got to know about the exact calculations of his policy premiums. The policyholder cannot change this premium in the middle of a running policy. However, you can only have this option at the time of policy renewal. So, calculate your needs and then decide whether that premium is in your pocket or not. 

3. IDV: It is important for you to know the market value of your car. So that you can check whether your insurance company has calculated the right IDV or not. Based on the IDV calculation done by your insurance company, the premium of your car is decided. The higher the IDV, the better as you can get a maximum claim amount from your insurance company. However, your premium would be increased in case you want to go with a higher IDV.  

4. Know Make, Model and Variant of Your Car: It is crucial for a policyholder to be aware of the exact specifications of his car. You should know the Make, Model, Variant, and other specifications of your car. Doing so will help you to cross-check whether a policy document has been rightly created or not. In case, the specifications of your car do not match with what’s mentioned in your policy document, your policy will be considered invalid. Thus, it would not only turn into a punishable offense(as your policy will be invalid now) but you won’t be able to get the claims as well. 

5. One/Multi-Year Policy: Depending upon the tenure of your policy, the premium of car insurance varies. One can avail of car insurance either for 1 year or multiyear, based on his preference. Individuals opting for 1 year would be paying a higher premium as compared to someone who has opted for a multi-year policy. 

Also, once you have chosen a policy tenure, you cannot change the same in the middle, as you can only have this option at the time of policy renewal. Thus, it is important to select your policy tenure wisely. 

6. Deductibles: Deductibles are known as a certain portion of the claim amount that a policyholder would be paying from his pocket at the claim settlement. Thus, the insurance company will pay the rest of the claim amount to the policyholder. If a policyholder opts to pay a higher portion of deductibles, he would be receiving the less claim amount from his insurance company. As he has already paid the maximum portion of the claim amount from his pocket. Hence, in return, the policyholder will be paying less premium for his car insurance and vice-versa. 

7. Claim Procedure: Claiming is the most crucial aspect of your car insurance journey. To avoid any hassle in the future, it is advisable to know the claiming procedure of your insurance company before.

  • Under car insurance, you can either have a cashless claim or a reimbursement claim. The policyholder can choose between these options.
  • Moreover, it is also advisable to check the list of network garages of your company. Doing so will help in knowing whether that insurance company has a garage in your nearby location or not.
  • It is also advisable to check the Incurred Claim Ratio of your company. It is the number of successful claims handled by an insurance company. The higher the ratio, the better is the insurance company in settling the claims. So, make sure to compare the incurred claim ratio, before purchasing your policy.

8. Read Terms and Conditions: Before you sign that dotted line, do carefully read all terms and conditions mentioned in your policy document. It is always advisable to thoroughly read, especially the inclusions and exclusions written in your policy. Doing so will help in clearing the confusion in your mind. 

Summary

Hope these factors above would help you in making the right decision. With the help of keeping in mind these important factors such as premium, IDV, policy type, and claim procedure you can choose the right car insurance policy. 

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