In India, you must have motor insurance to take your car out on the road. In fact, you must be covered from the moment your car leaves the showroom. Since it is important to get insurance along with the purchase of the new car, you may or may not get the opportunity to invest time in buying an insurance plan that suits you best, and may end up with something dissatisfactory. Although you have the option of changing your plan or the insurer at the time of renewal, you can avoid this situation by taking some time out to research, compare and choose a plan that meets your needs and fits your budget. Here are some questions you must find answers to before buying an insurance policy for your car.
- What exactly would the policy cover?
If you want to buy car insurance online, go through the features carefully. You will find that policies with low premiums do not cover most situations. Initially, you may save on your premium, but in case of damage, you will have to pay a major part of the expenses out of your own pocket. Before deciding on a plan, ask what the insurer will cover, or inclusions of the policy. Select a policy that would provide maximum coverage even if the premium is high.
- Which add-on covers are available with the insurer?
A standard comprehensive insurance policy may not cover all the damages faced by your car. Ask your insurer about the add-on covers that you can opt for with a comprehensive cover. Some of the popular add-ons are zero-depreciation, roadside assistance, engine cover, no claim bonus protector and so on.
- What would be the maximum IDV (Insured Declared Value) of the car?
The Insured Declared Value is the current market value of the car minus depreciation. IDV will decide the sum insured (SI), which is the amount the insurer must pay if your car is stolen or damaged beyond repair. Ask the insurer to show you how they calculate the IDV. Take care to see that the insurer does not fix a low IDV or increase the depreciation amount, as it will lead to a low claim amount in future. The premium may go down, but you will be at a loss in terms of the SI in the face of a mishap.
- Is there any deductible attached to the policy? If yes, what is the amount?
Deductible means the amount that you agree to pay during claim settlement. If you increase the deductible, the premium amount will go down, but during claim settlement, you will receive a reduced claim amount. This is a two-way loss as you pay the premium throughout, but at the time of any damage to your car, you will end up paying the major share of the repair cost. So, ask about the deductible before you purchase the plan.
- Can the insurer show you the reviews and feedback of previous and current policyholders?
Select your insurer carefully. Go through the websites of several insurers before choosing one. Research and compare their claim settlement ratio, feedback and reviews, exclusions of the policy, claim settlement process, list of network garages, additional services provided and so on. Answers to these should give you a fair idea about an insurer’s reputation.
- What are the terms and conditions of the policy?
Before buying a comprehensive policy, it is important to go through the terms and conditions, and exclusions of the policy. If you do not find the required details on the policy document, ask your insurer regarding the same. Most of the time, claims get rejected as policyholders are either unaware or confused about the extent of the cover or policy terms.
- What is the process of filing a claim?
The claims process plays an important role in your experience with an insurance company in the time of need. The process should be easy and simple without a lot of paperwork. Ideally, the insurer should allow you to file a claim online without even having to visit their office in person. Also, the claim settlement ratio of the insurer is an important factor. An insurer with a high claim settlement ratio means that your future claims may get settled without any problem.
- What is the amount of sum insured for theft cover?
Theft cover is important as a car faces the risk of being stolen at all times – be it while on the road or when parked in your garage. Certain places in India are infamous for car thefts, and the chances of recovery are very less. So, you should check whether the insurer provides adequate financial compensation for such losses or not.
- What are the conditions related to the No Claim Bonus?
You should check with your insurer regarding the terms and conditions related to the No ClaimBonus or NCB. NCBs are generally accumulated after every claim-free year and are given as a discount in the renewal premium. This is the standard rule, but it may vary among different insurers. So, check the eligibility conditions related to the NCBs before purchasing a comprehensive policy.
The above tips would help you choose a suitable policy for your car. Do not look for the cheapest plan but assess the features of the plan such as the coverage, NCB and terms and conditions. The policy should give you maximum protection and extra benefits. Do not make assumptions in case of doubts and reach out to the insurer to know the exact details, particularly about the exclusions.
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