While for some, luxury cars are an easy buy, for others, owning one is a dream for which they work hard and save for years. Either way, it is incredibly important to insure your luxury car because, needless to say, it can cost you a bomb to do the repair work. With the right luxury car insurance plan, you can repair the car without facing any financial brunt!
Why is Car Insurance Important for Your Luxury Car?
To help you understand the importance of an insurance plan for a luxury car, let us take you through an example. Imagine you own an Audi Q7, and it met with a small accident that caused a dent at the back and shattered the tail light. The repair work for this itself will cost you more than INR 20,000, with the tail light alone costing you close to INR 14,000. Now, comparing this with a budget car, say a Hyundai i10, the repair work for the same issue would have cost you around INR 3,000.
Clearly, even the smallest of issues can cost you a lot when it comes to a luxury car. Similarly, engine spare parts too are quite expensive with some of them going into lakhs. Now think of a situation where your car gets heavily damaged! Won’t that cost a bomb?
This is where an insurance plan comes into play by providing cover for such damages. Such plans help you with financial stability.
Note: It is mandatory to have car insurance for all types of cars.
Comprehensive Car Policy Premium with Zero Depreciation
The biggest advantage of buying a car insurance policy with zero depreciation cover is that you virtually do not have to pay anything out of your pocket when it comes to paying for damages. Since the plan does not include a clause regarding providing settlement based on depreciated prices, your expenses narrow down to almost nil. This way, you can save yourself from a financial loss.
Such a policy also provides you extensive cover against all damages, be it third-party damages or damage caused due to your own fault.
What Happens If You do not Have Car Insurance for Your Luxury Car?
Not having car insurance for your luxury car is not a smart move as driving a car without a valid insurance policy is a punishable offense. Moreover, in an event of an accident, you will have to end up paying for the damages out of your own pocket. The expenses can vary from tens of thousands to tens of lakhs, depending on the model of the car and the damage done to it.
if you bought the car on an EMI basis, you not only have to pay the monthly installments but also the compensation for the damages. All this can take a toll on your savings. Therefore, you must definitely buy a comprehensive insurance policy for your luxury car, preferably one with zero depreciation.
What Kinds of Claims are Covered?
In a comprehensive car insurance plan for a luxury car, you get all the basic covers that you get in a plan for a budget-friendly car. You get complete cover against third-party liabilities, including the damages done to the car and the rider, and damages are done to your own car and yourself. It also covers the damages done to your car due to natural calamities like earthquakes, floods, hurricanes, and more. In case your car gets stolen, you will get compensation for the same.
What is not Covered?
If you think that buying comprehensive car insurance for your luxury car will save you from all the expenses for damages in the future, you are mistaken. There are certain things that are not included in the policy and hence, you will have to pay out of your own pocket in such cases.
Here are few such instances:
- Mechanical or electrical breakdowns: Imagine a situation where your car is parked in a flooded area and you start the engine to move it out of there. If the car breaks down, the damages done to the engine will not be covered under the plan.
- Loss due to natural wear and tear: If there are any losses because of the natural wear and tear of spare parts, they would not be settled by the company. This holds true for the depreciation cost as well, which makes the IDV (Insured Declared Value) revised downwards.
- Full compensation only for a limited time: During the event of the total loss of the vehicle, you get paid more than 75% of the IDV. To counter this, you can buy an invoice cover, which gives you back the full IDV as compensation. However, the catch here is that the invoice cover is only valid for the first two years of the policy.
- Extended cover for passengers: Never forget the fact that the insurance policy is only for the driver-owner and the car, and not for the passengers or a hired driver. So, if there are any bodily injuries on the passengers, they will not be compensated.
Factors to Keep in Mind Before Getting Insurance for a Luxury Car
Buying car insurance for a luxury car is not a small thing, as it requires investments of tens of thousands of rupees on a yearly basis. Therefore, it is absolutely important that you consider multiple factors before making the final decision.
- Go for a comprehensive plan: For a luxury car, it is always advisable that you buy a comprehensive plan and not a third-party liability plan. It is because, more often than not, the damage done to your car will require expensive repairs. You can choose between getting a zero depreciation plan or a regular comprehensive car insurance plan.
- Select suitable add-ons: Add-ons always help reduce the out-of-your-pocket payments during claim settlement, so it is always good to have them included in the plan. However, make sure that you do not include too many add-ons because then your already-high premiums will shoot up even further.
- Install anti-theft devices: Be it the proximity sensors, a break-in alarm system in your car, or a CCTV at your garage, all these have a huge say in affecting your premium prices. Therefore, installing them before buying the policy can help you bring down premium prices considerably.
- Compare policies: Never buy an insurance policy without comparing it with others, no matter how good it sounds. You must compare the premium prices, the add-ons available, and the discounts that a certain policy provides. The best way to compare is to do it online. You can easily compare multiple insurance plans at the same time and get the best deal for you, based on the make and model of your car.
- Make sure you are capable of paying the premium: The premiums can get slightly out of hand for luxury cars, and if you already have a few debts, then it would be best that you go for a basic plan with lower premium prices. You need to budget the plan accordingly.
Must-have Add-on Covers for Your Luxury Car
Selecting the right add-ons can very well turn out to be a make-or-break moment for you. Here are add-ons that you must definitely include:
- Engine Cover: For any car, its engine is hands-down the most expensive part and if that gets damaged, paying for it out of your own pocket can cost you a lot. Moreover, the price just shoots up when we are talking about a luxury car. Therefore, it is advisable that you include engine cover in the list of must-haves.
- Zero Depreciation Cover: By adding a zero-depreciation cover, you can get the compensation that equals the amount for which you bought the car in the first place. Note that different companies have different clauses for this cover, so make sure you read them carefully.
- Extended Accidental Cover: As you know, the insurance claim is just for the driver-owner, so it would be a sensible decision to add an extended accidental cover and include your passengers as well in the plan. You can also get insurance for a hired driver but will have to fill out a separate form.
- Invoice Cover: Invoice cover ensures that you get the compensation that equals the IDV if your car is stolen. However, note that this cover is valid only for the first two years of the policy term.
Apart from these options, you have other add-ons as well in the shape of No Claim Bonus cover, roadside assistance cover, and more. These should be kept in your list and you can add them based on your needs.
How High are Luxury Car Insurance Premiums?
Here is a list of some of the top luxury cars in India along with the average premiums you will have to pay for them. Note that these prices are based on models manufactured in 2020 and are valid for Delhi.
|BMW 5 Series
|BMW 3 Series
Now that you have gone through all the points, you must have got an idea about the fact that car insurance for luxury cars is a necessity. It helps you stay protected from a financial crisis in the future. Therefore, you should compare multiple policy plans online and buy the one that best suits the bill!