So finally you’ve shortlisted your dream car and are arranging finances for it, feels ecstatic right? But have you considered which insurance plan you should purchase? Car insurance isn’t something that you can select in a jiffy, but need to make a careful choice taking into consideration its coverage and features.
Purchasing a car insurance plan can be a daunting task. With a varied range of options, it gets more confusing in making the perfect choice of car insurance plan. To avoid any further confusion here, we have brought you some crucial tips that will aid you in the buying decision.
Exposure to risk
Your car insurance policy should be purchased based on risk exposure. Say, you are someone who often makes long travels to the mountains, then the comprehensive car insurance policy is a must for you.
On the contrary, if you infrequently drive your car, third party car insurance may be sufficient for you. Hence, whenever you purchase a car insurance policy, it is essential you look at the risk exposure. Road terrains, geographic location of your vehicle, etc. determine the exposure of risk.
Add-ons, as the name suggests, are not compulsory but optional. Once you analyze the risk, you will be able to select an appropriate add-on cover. For someone residing in a flood-prone area, an engine protection add-on is crucial whereas, a roadside assistance add-on comes in handy in times of unexpected vehicle breakdowns.
There are other add-ons too, like zero depreciation insurance, NCB protects, and more that you should consider at the time of buying your insurance policy. A car insurance calculator can come in handy in selecting the right add-ons depending on your need while considering the budget.
Deductible of your policy
A deductible is a small amount that you have to bear at the time of making an application for the claim. All policies have this component, and you need to be aware of the deductible portion of your policy.
There are two types of deductibles, compulsory and voluntary. While a compulsory deductible is pre-defined as per policy terms, a voluntary deductible can be adjusted to increase or decrease your premium amount. However, you need to be cautious in increasing the voluntary deductible as it will increase your contribution at the time of claim.
Insured Declared Value (IDV)
Car insurance premiums are calculated based on various factors like insured declared value (IDV), model and make of the car, year of manufacture, and more. Among these, the IDV plays a crucial role. It is the maximum amount that the insurance company pays in case of total damage or theft. Insurers also allow you to set the IDV for your car within a particular range. It does impact the premium of your car insurance policy.
Lastly, when finalizing the policy, make sure you consider the claim procedure too. A good and reputed insurance company will have an easy and efficient claim settlement procedure. Also, the claim settlement ratio of the insurance company will help you in further deciding whether to select a particular insurance company or not. It is the number of policies settled by the insurance company as compared to the applications received.
These are some of the cornerstones of your car insurance policy. Don’t forget to miss buying a car insurance plan. It can help you save time and money at the time of an accident or damages. Make sure to take an informed decision by researching the various policies and then purchasing the car insurance that suits you the best.
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