Third-party car insurance in India is a mandatory requirement under the Motor Vehicles Act. This policy can help you avoid legal troubles but it leaves you and your vehicle exposed to financial loss incurred during an accident. Thus, it is very important to understand all aspects of a car insurance policy before applying for one.
You can also check out car insurance online and compare the different policies offered by various insurance companies. If you already have car insurance, then also it is wise to do your research before renewing your car insurance policy.
Here are 5 things that you need to know when renewing your car insurance policy.
5 Essential Things to Consider When Renewing a Car Insurance Policy
- Coverage plan type
Car insurance policies are of two types primarily: third-party liability coverage plans and comprehensive coverage plans. While the former can be easy on your pocket, it limits the coverage to only third-party liability.
Alternatively, comprehensive plans offer coverage for financial damages sustained by the policyholder. But this policy has higher premiums comparatively. However, comprehensive car coverages are better as they can save you from loss caused by financial damages to your own vehicle.
- Add-ons to the policy
When purchasing car insurance online, you must check the add-ons. These add-ons can offer additional benefits to the initial coverage. These add-ons widen the ambit of financial security for your vehicle and can be availed against a nominal increase to your car insurance premiums. Some popular add-ons to consider include engine protection cover, zero depreciation cover, and NCB cover, among others.
- Insured Declared Value or IDV
Insured Declared Value is the equivalent of the value of your car that the insurer agrees to cover. It is one of the most critical factors that you must consider when making your car insurance renewal. It should adequately cover any possible damages to your vehicle in the future. Policies with low IDVs can be tempting for their lower premiums but must be avoided as they may not provide necessary coverage.
- Network garages with a cashless claim facility
When choosing a car insurance provider, you must also check the network garages they have where you can get a cashless claim facility. This comes in very handy at the time of claim processing and settlement. Since the bill is settled by the insurance company directly, you do not have to break your savings.
- Deductibles applicable
Car insurance policies usually come as coverage options with mandatory or voluntary deductibles applicability. Voluntary deductibles often lead to cheaper premiums but they have a negative impact on the claim value of your insurance policy.
While these are the common considerations you need to make when renewing your car insurance, there are some other aspects too. For instance, you need to check whether the new policy comes with a suitable NCB or not. You must also check the claim history and claim settlement ratio of your insurance provider.
If you are opting for car insurance online, make sure to read the online reviews from other customers before buying the policy. In addition to this, talk to your insurer clearly, mention your requirements, understand what the policy covers and what it does not, check the ad ons, negotiate the premiums and finally, always renew your policy before the due date.