Buying a car is your next best investment after buying a house. Once regarded as a luxury, now it is almost a necessity in every household. Lending institutions have further made it accessible by providing secure finance options for the buyers. Also, the manufacturers have started to roll out new models suited for different income groups too. This makes it further easier to purchase a new car.
However, your responsibility does not end the moment you book your dream car. You have more boxes to tick-off your checklist. One of these is getting in insurance cover. A typical buyer may seem perplexed with the idea of buying a car insurance policy. It is furthermore confusing with the plethora of choices available. Here we have compiled a detailed guide to assist you in buying a car insurance policy that suits you the best:
Step 1: Select the right type of policy.
Motor insurance policies are essentially available in two types – liability only and comprehensive insurance cover.
Liability only cover is also popularly referred to as third-party car insurance. This policy offers coverage to the policyholder in case of any damage to property or injury to another person. Moreover, it saves the owner-driver from any legal liabilities that might arise in due course from an accident. A comprehensive insurance policy compensates its shortcomings.
Comprehensive car insurance, on the other hand, is the one extending cover to the owner in case of damages to the car as well as for injuries sustained. All of this while including a liability cover too. When you buy car insurance online, you can compare extensively & choose the right coverage for your vehicle & your requirements.
Step 2: Select the right add-ons.
Once you have determined the type of insurance policy, the next step is selecting add-on for your plan. You may note that add-ons are only available in case of a comprehensive insurance cover and not third-party policies. There are multitudes of options when you select add-ons. These additional coverage facilities are available at a fraction of your base policy and come handy. When buying add-ons, you must analyse your needs and select the ones that suit your requirement. Some of the essential add-ons are –
Zero Depreciation Add-On: When the insurer settles your claim, the depreciation for the spares replaced or repaired is accounted for and only the balance amount is paid to the policyholder. When using a zero depreciation add-on, this depreciation is not considered, and the reimbursement is for the full value of the parts replaced or repaired.
Engine Protect Add-On: A standard car insurance policy does not include damages to the engine. Using an engine protect add-on, you can insure the damages to your engine and other ancillary parts too.
Roadside Assistance Add-On: Roadside assistance or as popularly referred to as RSA is an add-on cover to your insurance policy where you get the support of a towing facility in case of a breakdown or mishap. A convenient add-on that saves you from the hassles of finding a towing service when you’re stuck in a breakdown situation.
Step 3: Compare the available plans
Once you have shortlisted the plan and its add-on, make sure you compare these with other insurance companies. You can get better deals at affordable prices or more coverage at the same cost. Here you can make use of a car insurance premium calculator to compare among the different plans and policies.
Step 4: Opt for deductibles.
Once you have shortlisted your car insurance policy along with suitable add-ons, take a careful look at the deductible portion of your insurance policy. There are two types of deductibles – compulsory and voluntary deductible. The compulsory deductible is a fixed portion of your policy which the insured has to bear, whereas the voluntary component will influence your premium amount.
Step 5: Make a note of IDV.
IDV or insured declared value is the maximum amount that the insurance company pays in case of total loss or damage to your vehicle. This amount is the closest estimate of the market value of your car. Some insurance companies allow you to modify the IDV of your vehicle depending on the accessories fitted. Declaring the right IDV is crucial as it affects your premiums.
Step 6: Do not forget NCB
At the time of car insurance renewal, do not miss out on taking note of your no claim bonus. It is a concession in your premium at renewal for making no claims during a policy tenure. NCB percentage starts at 20% and goes up to 50% for every consecutive claim-free policy year.
These are some of the steps that can be useful when buying car insurance online. After all, online is the new trend!