What You Should Know Before Choosing the Right Car Insurance Policy

Before choosing the right car insurance policy, you should know about coverage types, deductibles, discounts, and much more. This is because selecting the right insurance policy for car goes beyond just meeting legal requirements. It is about protecting yourself from financial risks on and off the road.

Moreover, by choosing the right insurance, you can save thousands not only while buying the insurance but also at the time of making a claim. So, let us explore in detail the 9 primary aspects you should know before choosing the right car insurance policy.

What are the Key Aspects to Know Before Buying a Car Insurance Policy?

India has nearly 25 car insurance companies. With so many options to choose from, one can easily overlook important details.

So here are the 9 aspects you need to know and consider before you decide to get the right car insurance policy:

1. Coverage Type

You should be aware of the various policy types and what is included in each. There is a wide range of insurance policies for cars, including comprehensive, third-party, standalone, and pay-as-you-drive options. Each of these policies provides a different range of coverage for your vehicle and can be helpful in various scenarios.

The most recommended vehicle insurance is a comprehensive policy, as it provides complete coverage for damage to your car and to third parties.

2. Insured Declared Value (IDV)

IDV of your car represents its current market value. It is the maximum amount your insurance will provide you in case of your car's total loss or theft.
So, before finalising the car insurance policy you want to buy, you need to decide on a specific IDV for your car. Selecting a higher IDV can increase the premium for your car insurance. So, choose the appropriate IDV.

3. No Claim Bonus

No claim bonus or NCB refers to the discount you can get on your car insurance premium. You can claim this bonus while policy renewal, and the discount can go up to 50% for five consecutive claim-free years.

You need to know if your current NCB will be transferable to a new vehicle. Moreover, you will also need to understand what the NCB clauses are for your chosen insurance company.

4. Add-On Covers

You will need to know what add-ons your car will need. You can decide on the riders on the basis of your driving habits, location, and more.

For instance, if you are planning to go on a road trip in your car, getting roadside assistance add-on cover can help you if you need emergency fuel or towing services.

5. Deductibles

Deductibles refer to your out-of-pocket expense during a claim. This amount is chosen by you at the time of policy purchase; a higher deductible can lower your premium.

So, you need to know what the best deductible amount is that you can opt for. It is advised to choose an amount you can cover, even in emergency situations.

6. Insurer’s Reputation

You need to know the insurance company from which you will be buying your car insurance. Get a good idea of an insurer’s reputation from the way they treat their customers and whether they are a recognised company.

You can easily check the customer reviews online and get a good idea. Moreover, if a company offers 24/7 customer support, it is a positive sign.

7. Claim Settlement Ratio (CSR)

Companies with high CSR have a high success rate in claim settlement. Generally, a CSR of above 90% is considered good. There are insurance companies in the Indian market with CSR as good as 99%.

So, make sure that the insurance company you are choosing has at least a CSR above 90%. This will indicate a smooth claim process for you in the future.

8. Network Garages

You will also need to know about the network garages your insurer owns. A wide network of garages indicates a higher chance that a network garage of your insurer will be near your location.

This will enable you to get a cashless claim settlement. In India, there are insurance companies with more than 4,000 network garages, which makes the policyholders’ work much easier.

9 .Discounts

You need to ask and know about potential discounts for your car insurance. Many insurance companies provide discounts to their customers for factors such as a good driving record or anti-theft devices.

For instance, you can install anti-theft devices that are approved by the Automotive Research Association of India (ARAI), such as steering locks, car alarms, immobilisers, and GPS trackers.

Bottom Line

Before choosing a car insurance policy, you should understand coverage, evaluate the insurer, and analyse the insurer’s reputation and claim settlement process. Understanding all of this, along with key terms and potential discount options, is crucial to helping you make an informed decision.

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