Quick Tips on How to Apply for Car Insurance in India 

In India, car insurance is one of the most misunderstood financial products. A lot of people have many confusions while purchasing car insurance. This write-up lists down a few tips to help you buy the best car insurance policy. 

Buying a car is a significant achievement. As a car owner, you would surely want to keep it protected if from all possible damages, and the best way to protect your asset is to purchase a car insurance policy. In India, as per the Motor Vehicles Act, 1988, every car owner must have at least a valid third-party car insurance policy at all time while driving the car. Car insurance, apart from complying with the law, is vital to protect your vehicle from damages, or theft. 

So, if you are looking for tips to purchase car insurance, you must be first aware of the types of car insurance available in India. Most insurers offer two types of car insurance policy – 

  • Third-party insurance 

It is the most basic type of car insurance and legally required. It protects you against the damages or injury you may cause to the third-party in an accident.

  • Comprehensive insurance 

You can purchase comprehensive insurance voluntarily. It provides coverage against both third-party liabilities as well as damages to your car. 

Buying a car insurance policy may seem to be an overwhelming task if you are buying insurance for the first time. There are several factors you must consider, which are discussed below: 

Compare the plans 

Before you make your final decision to purchase car insurance, you should compare the different car insurance India plans offered by different insurers. You must compare the premium, claim settlement ratio, network garages, add-ons provided, etc. and choose the right plan that suits your needs and has an affordable premium. 

Choose the right add-ons 

Add-on covers or riders are additional coverage options that you can purchase to extend the coverage scope of your policy. However, when you buy an add-on, your premium increases. Determine your needs first before choosing the add-on in your insurance plan. Some of the most popular add-on covers include engine protection cover, roadside assistance cover, zero depreciation cover, etc.

Opt for voluntary deductible 

When you file for a claim, the insurance company does not compensate the 100% of the amount claimed; you must bear a certain percentage of the repair cost before the insurer pays the remaining amount. This is known as a deductible. Generally, the insurers offer two types of deductibles – voluntary deductible, wherein you have the flexibility to choose the deductible amount, and pre-defined deductible. You should opt for voluntary deductible based on your affordability. 

Determine your vehicle’s IDV 

IDV or Insured Declared Value is the maximum amount that the insurer will provide if your car gets stolen or gets damaged beyond repairs. You must get the IDV assessed beforehand. While buying an insurance policy, if you are tempted to buy a policy with a lower premium, be careful, the insurer might be providing lower IDV. In such a situation, you may get much lower compensation in the event of car theft. 

NCB – No Claim Bonus 

A lot of car insurance buyers do not understand the significance of NCB. If during a policy year, you do not file for a single claim, the insurer may reward you with NCB in terms of reducing your premium amount or increasing your sum insured at the time of renewal of the policy. Hence, it is advisable that you avoid filing a claim for small repairs or you may lose the accumulated NCB.