Insurance is an essential tool that safeguards you against financial losses. In the fast-paced lives of today, you have an option to insure your life, home, health, vehicles, etc. In India, it is illegal to drive a car without active insurance for the car. The Motor Vehicles Act, 1988, mandates all cars to have a third-party insurance cover. Apart from this mandatory cover, there are comprehensive policies, add-ons, and various other options available to allow car owners to customize the policy according to their needs.
Today, we are going to talk about the long-term car insurance policy and highlight its benefits to help you choose the right option before buying car insurance online.
What is Car Insurance?
Car insurance is an insurance policy where a car owner pays a premium to receive protection against financial losses arising from an accident, theft, or any other factor causing damage to the insured vehicle. There are two types of car insurance policies – third-party liability cover and comprehensive policy.
Here are some benefits a car owner gets when he buys insurance for a car:
- Third-party policy – all costs arising due to damages caused to third-party vehicles or persons are covered.
- Comprehensive policy – Third-party cover plus Own-Damage cover, which offers protection against losses arising due to damages to the vehicle of the policyholder. It also includes a personal accident cover for the owner/driver of the car. You can further enhance the coverage by including unique car insurance riders/add-ons to the policy.
- Worry-free driving – With our fast-paced lives and congested roads, accidents or mishaps are a common occurrence. If you have an adequate policy, then you don’t have to worry about financial losses during such times.
What is Long-Term Insurance for a Car?
Earlier, car insurance policies had to be renewed every year. With the launch of long-term insurance policies, car owners can now insure their new cars for three years at a stretch and not worry about renewals.
Benefits of Long-Term Insurance for a Car
Here are some advantages offered by a long term car insurance policy:
1. Hassle-free Car Insurance
Renewing your car insurance every year can be a hassle since you have to remember the date of renewal and ensure that the renewal process is completed in time. We live in busy times, and many people tend to miss the renewal date leading to exposure to various risks. Long-term insurance for the car is convenient since your car is insured for three years.
2. No Risk of a Lapsed Policy
Once a car insurance policy lapses, renewing it can take a lot of time. You might have to go through the process of getting your car inspected and IDV calculated again. Further, the premium can be higher if there has been a hike in rates. Further, if your car meets with an accident/mishap during the period when the policy has lapsed, you will have to bear the costs of repair yourself. Also, you can be fined since it is mandatory to have an active car insurance policy at all times. If you opt for a long-term car insurance policy, you are covered for an extended period of 3-5 years and don’t have to worry about your policy lapsing.
3. Discounted Premiums
Many car insurance companies offer discounts on long-term car insurance policies since the premium amount is higher than an annual policy. This means that you can get the same coverage at a discounted premium. You can use the car insurance premium calculator offered by most insurers on their sites to get a better idea.
4. Protection against price hikes
Usually, the cost of a car insurance policy increases every year. When you purchase long-term insurance for your car, you get a fixed premium rate for three years. You might end up saving around 20-40% on premium if you were to renew the policy every year.
5. Easy cancellation
You can cancel your long-term car insurance policy any time you want. There is no requirement to continue with the policy for three years. If you are getting a better car insurance quote, then you can cancel the policy, and the insurer will return the unused premium amount. You can also continue the NCB benefits by ensuring that you purchase a new policy before cancelling the existing one.
Car owners have many questions pertaining to car insurance. Here are some shared with us:
Q1. Can you insure a car older than 10 years?
Yes. However, it is important to remember that a depreciation of around 50% will be applicable to such cars.
Q2. Can you get insurance for 6 months on a car? Can you buy car insurance for 2 weeks?
You will have to check the websites of particular motor insurance providers to see if they offer short-term policies. Get in touch with the insurance company and put in your request. However, it is advisable to buy an annual or multi-year car insurance policy to prevent lapses and traffic fines.
Q3. Which car insurance is best in India?
This question cannot have a simple answer since each car owner has specific demographics and requirements. Also, each car is different, and the best car insurance can be different for different people. With car insurance plans, like the TATA AIG car policy, allowing people to buy car insurance online, you can compare plans, select add-ons, assess the claim process, and go through the policy’s terms and conditions and choose the best one for your site.