Insurance plays a huge role in making up for financial losses that occur when least expected, such as an accident or a natural calamity. It is that one friend, indeed, which is ready to bail you out of such crises without burning a hole in your pocket. Additionally, a car insurance policy also covers personal injuries suffered in an accident.
Here are seven questions you must ask yourself before purchasing a car insurance policy:
- What type of coverage do I need?
There are two types of car insurance coverages available: third-party liability cover and comprehensive policy.
Purchasing third-party liability cover is mandatory as per the Motor Vehicles Act, 1988. However, this plan only covers injury or death caused to the third party and/or damage to their vehicle. On the other hand, a comprehensive plan provides you with broad coverage. It covers the costs of your car along with the third-party. This is the fundamental question to ask for starters.
- How will my car be valued?
The value of your car is determined by several factors such as its make and model and the IDV, which is the present market value of your vehicle. Hence, if you own a luxury car, its cost of insurance will be expensive as well.
- What deductible should I pay?
A deductible is a pre-decided amount that you have to bear from your pocket once a claim has been approved. The insurer pays the remaining amount after you have borne the cost of the said deductible. The quantum of the deductible that you would need to bear is negotiated and decided at the time of purchasing a policy. If you choose a higher deductible, your premium will be reduced.
- Do I need to ask for concessions?
Concessions are attractive and most insurance companies offer them. You must ask for prevailing offers and check if you’re eligible for the same. However, always remember to check the coverage provided when availing a concession on your policy. Some companies also offer discounts upon online purchase of car insurance on the websites.
- What extra (add-on) covers would I need?
If you’ve purchased a comprehensive car insurance policy, you can choose from the various add-on coverages available. These are extra benefits offered by the motor insurance companies at an added cost. For example, if you’re fond of long drives or road trips, there is a possibility of your car breaking down in the middle of nowhere. In situations like these, you can make use of a 24×7 spot assistance add-on cover. There are many other add-ons available such as consumable expenses, key & lock replacement, zero depreciation cover, engine protector, etc., that you can avail.
- Do they have a 24-hour claims service?
Imagine you get involved in a car accident and there is no way for you to reach out to the insurer to raise a claim. Situations like these can get stressful. Therefore, most insurance companies provide you with 24×7 claim reporting support. You can directly contact your insurer through phone or visit their website. Hence, it is important to check if the insurance provider of your choice also offers this service.
- If my car is in an accident, will the insurer pay for original manufacturer parts?
People assume that car insurance pays for all original parts after the accident. However, this is not the case. The value of your car parts reduces (depreciates) with time. If your car is involved in an accident after a year of purchase, then the depreciated cost of your car parts will be compensated by the insurer.
Still wondering what is the right policy?
For those looking at travelling with companions and are okay with spending higher, they can opt for a comprehensive car insurance policy. Under such policies, you can also choose add-ons like passenger cover, engine protection cover, consumable expenses cover, etc., for better policy benefits. If you just drive your car to and from work, then a third-party liability cover coupled with a personal accident cover should ideally be enough for you. Either way, consider your requirements before making a choice. Calculate the premium online using a car insurance premium calculator to find a policy that suits your needs best. Always compare policies online before purchasing one.