Buying a car and car insurance go hand in hand. Many people in India do not know that a car insurance policy is ticked off as mandatory by law. This is why you can find several uninsured cars plying on the roads. Also, a good count of car owners only buys insurance to keep up with the requisites as per Indian Motor Vehicle Act.
The best way to safeguard a car is by buying comprehensive car insurance online. If you are planning to purchase a new car, you must know well about the importance of car insurance and follow the tips to buy the policy online.
In this quick guide, we will discuss various facets of car insurance to help you understand how to buy a policy.
Types of Car Insurance Policies
No matter which insurer you choose, you can find two types of car insurance policies:
- Third-party Car Insurance – Buying this type of car insurance online or offline is mandatory as per laws. In case of an unfortunate accident, the policy covers the expenses of the vehicle you dashed into. The third-party will receive reimbursement for the losses incurred during the accident, thus saving you from any financial burden.
- Comprehensive Car Insurance – During unforeseen events, your car may also get damaged and repairs can be expensive. Third-party insurance only covers damages to the car you bumped into. This is where you need a comprehensive insurance policy which not only safeguards your car but also includes third-party insurance component. In other words, you can get both own damage and third-party cover on buying comprehensive car insurance online.
Terms Related to Car Insurance You Must Know
Insurance policy documents contain several terms and jargon, which are not easy to understand for a layman. To understand the documents better, you must know about some of the most common car insurance terms.
- Insured Declared Value or IDV
IDV of your car is its current value as per market rates that the insurers consider while calculating the premium. It is also the maximum amount you will receive from your insurer in case of theft or total loss of your car. The total loss here means the car is damaged beyond repair.
- Zero Depreciation Cover
All vehicles depreciate in value over time, which is what insurance companies consider while determining the amount payable in case of a claim. However, you can get a full claim without any depreciation deduction by including zero depreciation cover. It is an add-on that you can choose voluntarily while buying car insurance online.
- No Claim Bonus or NCB
NCB is the incentive you receive from the chosen insurer for every claim-free year. It means that if you happen to file no claim during the policy tenure, you become eligible for NCB in the form of a discount while renewing car insurance online for the time ahead.
- Deductible
A deductible is an amount or percentage you agree to pay from your pocket at the time of claim settlement. For instance, if the claim amount turns out to be Rs. 30,000 and you have bought car insurance online with 10% deductible, you will have to pay Rs. 3,000 while the insurer covers the rest.
Ways to Reduce Premium of Car Insurance Online
- Compare car insurance policies before buying one
- Choose adequate coverage
- Select a high voluntary deductible
- Be a safe driver and avoid claims to get NCB
Importance of Choosing the Right Insurance Company
Many insurance companies in India offer car insurance online at different rates. As a smart insurance buyer, you must dig deeper to know about various insurers before buying from any of them. Check their Claim Settlement Ratio (CSR), ask about the time taken to process claims and look for genuine reviews from customers. Tata AIG General Insurance Company is a renowned name in the Indian insurance sector you can bank upon. They offer comprehensive car insurance policies with personal accident cover and several add-ons to choose from. Furthermore, it is a good practice to read insurance policy wordings and follow various tips to buy car insurance before buying one.
