According to a mandate passed by the Government of India, under the Motor Vehicles Act, 1988 if you own a vehicle and wish to drive it on the roads of India, then it is important that you have a valid car insurance policy.
You must conduct proper research and compare various plans before purchasing a car insurance policy. If you are purchasing a car insurance policy for the first time, then it is important that you are aware of what car insurance is, the types of policies, and the benefits and features that you can avail. We will have a look at what makes a car insurance policy important and what are the things that you must look for when purchasing a scheme for yourself.
- Insured Declared Value (IDV): Insured Declared Value (IDV) is the amount that you will receive in case you file a claim if your vehicle gets stolen or damaged. The IDV will depend on factors such as the age of the vehicle, the region in which you are driving your vehicle, etc. It is important to note that higher the IDV higher the premium rates and vice-versa. Hence, it is important that you evaluate your insurance needs and financial capabilities and based on it, you choose the IDV of your vehicle.
- Types of Car insurance policies: There are two types of car insurance policies based on the coverage that you can purchase for yourself. They are:
- Comprehensive car insurance policy: A comprehensive car insurance policy is a type of policy which provides you coverage in case your vehicle gets lost or sustains any kind of damage.
- Third-party liability car insurance policy: As the name suggests, under this type of policy, you are protected from any sort of legal liabilities which may arise if your vehicle is involved in causing any damage to a third party. In case of any damage caused to the property of a third party, you can file a claim. The claim amount can then be used to compensate the victim for the loss.
- No-Claim Bonus: A No-Claim Bonus (NCB) is nothing but the discount that you can enjoy on your premiums provided that you do not make any claims for a certain period of time. For example, if you do not file any claims during the first year of your policy, then you may get a 20% discount on your future premiums. The discounts are incremental in nature and you may enjoy a rebate of up to 50% on your premiums if you do not make any claims at the end of your sixth policy year. You must also note that you can also transfer your NCB if you decide to port your policy.
- Roadside assistance: One of the most important features that a good car insurance policy provides is roadside assistance. In case your vehicle breaks down in the middle of the road, you can ask your insurer to assist you. Not only will your vehicle be taken to the nearest network garage for repairing and its expenses covered by the insurer, you will also be provided coverage for the taxi fare and your stay in the nearest hotel for the time when you will be without your vehicle.
- Other add-on features: You must look for a plan which offers different types of add-on features which can be helpful to you such as hydrostatic cover which provides cover in case your engine breaks down due to waterlogging, or the zero-depreciation cover which is a must if your vehicle is new.
- Bundling up your insurance: If you own multiple cars then it can be extremely expensive for you to buy multiple car insurance policies. Hence, you can bundle up your insurance policy under which all the cars are provided cover. This way, your premium does not get high and you are not required to shell out an extra amount.
- Renew your policy on time: Do not forget to renew your policy. In case you fail to renew your policy, you will have to purchase a new policy and you will not get any benefits from the previous car insurance policy. Hence, never ever forget to renew your policy on time.
- Go for voluntary deductibles: It is recommended that you go for voluntary deductibles when you have purchased a policy. Under a voluntary deductible, you agree to pay a sum of money out of your pocket in case of any damage or loss to your vehicle. Higher the deductible, lower will be the premiums.
Hence, these are some of the things that you must know about a car insurance policy. It is important that you properly compare various car insurance plans and evaluate your insurance needs. Once you have properly compared the car insurance policies available, you can go ahead and purchase the policy which you believe will be suitable for you.