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Important Facts About Buying Insurance for Your New Car

by Byrne Anderson
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The Motor Vehicles Act in India has made it compulsory for all vehicles to have valid third-party insurance. In an accident, third-party car insurance will help you recover costs for damage to the third-party car. Third-party car insurance essentially covers damage you may accidentally inflict on another person’s car. Under a comprehensive insurance policy, you can get coverage for your car as well as against theft, fire, and other natural and manmade disasters.

Let us learn a few keywords & features of a car insurance policy:

  • Insured Declared Value (IDV): The IDV of the vehicle affects the car insurance premium. The IDV is simply the car’s current market worth, and it directly relates to the car’s insurance cost. Consequently, a lower IDV and a cost-effective insurance premium go hand in hand. * 
  • No Claim Bonus: The No Claim Bonus (NCB) component would be disclosed in the policy document when purchasing car insurance. This is the saving your insurance company offers you for a year of no claims. This reduces the future policy year’s premium. The promised savings on the premium amount typically ranges from 20 to 40%.

As long as the policy renewal remains uninterrupted, one appealing aspect of the NCB is that it accumulates over time. * 

  • Zero depreciation add-on: A typical auto insurance coverage reimburses the claim after deducting the car’s depreciation. If you selected a zero depreciation add-on, your claim would be fully reimbursed. This add-on is usually only permitted for the first few years. It is a good addition to a new car insurance policy as well. * 
  • Cashless services: With a cashless insurance policy, the car owner is responsible only for a small part of the repair costs.

Numerous car care companies across the nation are affiliated with insurers. These are called network garages. Suppose the vehicle is fixed at one of the network garages. In that case, the insurance provider pays the shop directly, leaving the vehicle owner to pay only the required fees. The rapid and simple car repair process and the fact that the owner contributes only a minimal effort towards it are appealing aspects of the cashless policy. *

  • Extra covers: Most car insurance policies make it quite clear which circumstances or driving behaviours are not covered by the policy. Wear-and-tear costs, damages sustained while the vehicle was being used illegally, while the driver was drunk, and purposeful damages to the car are a few of these exclusions. 

However, you can cover wear-and-tear by purchasing add-ons with your car insurance policy.

Various add-on features can be asked from the dealers, but please note that these would be charged extra. We suggest you use the online car insurance calculator to understand how these may affect your final premium amount. *

  • Voluntary excess: Voluntary excess is the sum that the car owner must pay when filing a claim. If you choose this option, you might have some savings on your own-damage insurance rate. The amount of voluntary excess is typically smaller than the amount of NCB to which you will be entitled the following year. * 

* Standard T&C Apply 

Buying car insurance online is less expensive. Thus it is recommended to do so via the insurer’s website directly or from a financial services aggregator. Additionally, do a lot of research and compare a few car insurance prices before you decide. 

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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