Are you planning to buy car insurance? In this day and age, having car insurance isn't just important, it's essential. Accidents happen, and you want to make sure you're covered when they do.
But here's the thing, finding the right car insurance can be a pain in the rear end. There are so many options out there, and each one seems to have its own set of confusing terms and conditions. Let’s dive into the details below.
What Is Car Insurance?
Car insurance is basically a deal you make with an insurance company. It protects you financially in case of an accident, theft, or other damage to your car.
Essentially, you pay a monthly or yearly fee, known as a premium, to the insurance company, and in exchange, they agree to cover the costs of any damages that may occur.
Why Is Car Insurance Necessary?
Now, you might be wondering why you even need car insurance in the first place. After all, isn't it just another expense? Right?
Well, here's the thing, car accidents happen at any time, and they can be incredibly costly.
So, without insurance, you could be on the hook for thousands of dollars in repair or medical bills if you're involved in an accident.
However, car insurance can cover these expenses, depending on the type of policy and deductible.
If you have car insurance, you can have peace of mind and avoid significant financial losses in the event of an accident.
Another reason why car insurance is important in India is, it is mandatory for car owners to have at least third-party liability insurance.
This insurance covers the damage caused to third-party property or injuries to third-party individuals in case of an accident. Failure to have this insurance can result in fines and legal penalties.
Types Of Car Insurance
In India, there are mainly 3 types of Car Insurance. Each insurance policy is tailored to meet the unique needs of customers. Also, it provides them with the most suitable coverage.
1. Third-Party Or Liability Insurance
As we spoke before, Third-party insurance is mandatory and covers damage or injury you cause to another person or their property while driving. It doesn't cover your own car or any injuries you might suffer yourself.
2. Comprehensive Insurance
Comprehensive car insurance provides broader coverage than mandatory third-party insurance.
It covers the costs of damages or injuries caused by you to a third party, as well as damages to your own car caused by theft, fire, malicious activity, natural calamity, or an accident.
You can also avail of cashless repair services at network garages. Not only that but also you can enhance the policy coverage with add-on benefits like roadside assistance, zero depreciation, etc by paying an extra premium.
3. Standalone Or Own Damage Insurance
Own damage car insurance covers only the damages to the insured car.
To get complete coverage for your vehicle, you can purchase this insurance policy in addition to an active third-party vehicle insurance policy, which is mandatory by law.
With both policies, you can protect your car from financial losses due to unforeseen events.
The premium for own damage insurance is calculated based on the Insured Declared Value (IDV) of the car.
What are some things you should keep in mind While Buying Car Insurance?
- Determine the coverage you need based on your car's age, make, and model, and your driving habits.
- Compare the premiums and benefits of various policies offered by different insurers.
- Check for add-ons like zero depreciation, roadside assistance, and personal accident cover.
- Look for the claim settlement ratio and customer reviews of the insurer.
- Read the policy document thoroughly to understand the terms and conditions, deductibles, and exclusions.
- Check the type of policy coverage and its inclusions and exclusions.
- Note the processing time of the insurer.
- Check for no claim bonus and other discounts offered.
- Evaluate the add-on coverages and network garages.
- Check the IDV.
- Compare the premium of different policies for the same coverage benefits.
- Consider the customer assistance factor.
Factors Affecting Car Insurance Premiums And Exclusions
- Your car insurance won't cover damages caused when you were drunk or high.
- If you don't have a valid driving license, any damages to your car won't be covered.
- If you use your personal car for business purposes, your insurance won't cover any damages.
- Your insurance won't pay for damages resulting from a contract you signed.
- If you let your car insurance expire, you can't make any claims for damages.
- Any mechanical or electrical failures of your car aren't covered by insurance.
- Any damage arising out of the specified geographical limits is also excluded from policy coverage.
- Damages to the engine, tires, and tubes of the insured vehicle are also not covered.
- Any damage that your car has suffered before buying this car insurance policy online.
Note: It is always important to carefully read and understand the terms and conditions of the car insurance policy before you make a decision to buy it.
When Can You Claim Your Car Insurance?
Third-Party Liabilities: Coverage against damages caused to a third person's body, property, or vehicle.
Personal Accident Cover: Coverage in case of the insured's demise or permanent total disability due to an accident.
Accidental Damage: Coverage against damages caused due to accidents.
Fire Damage: Coverage fire explosion, self-ignition, or lightning.
Theft: Provides coverage if the insured car is stolen.
Natural and man-made calamities: Coverage against damages from both natural and man-made calamities.