How to choose the right insurance for your car: Key tips

  • Choosing the right car insurance is important to ensure peace of mind and a balance in finance.
Choose and buy an insurance policy wisely, as it could otherwise impact your financial balance.
Choose and buy an insurance policy wisely, as it could otherwise impact your financial balance.

There are a wide number of banks and non-banking finance companies in India that offer insurance for vehicle owners. Also, there are tons of different car insurance policies available in the market. But, choosing the right policy can be challenging. In Inia, insurance companies offer different plans with different features, and the insurance policies come at various price points. Hence, it is important to research thoroughly before picking the right policy that suits the consumer's needs best.

Here are a few key tips to help you to choose the right car insurance policy.

Also Read : How to keep your car safe from fire: Essential tips

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Know your requirement

Before you start searching for car insurance and the best insurance company, try to self-assess your requirement. Also, learn what type of policy you want to purchase. In India, there are two types of car insurance policies - Third-party insurance and comprehensive insurance.

Third-party insurance is mandatory by law. It covers only damages to the third party. You won't receive any compensation under this coverage. If your vehicle is involved in an accident, this insurance will cover the damages incurred by the other party. The comprehensive policy, on the other hand, covers both third-party liability and damage to own car.

If you are driving a premium car, consider buying a comprehensive policy, which would help you reduce financial liabilities in case of damages due to an accident. Otherwise, you can think about a third-party liability plan only, which would help you with affordable premiums.

Search and compare plans

Once you are sure about the type of car insurance you want to purchase, always opt for comparing multiple policies from different insurance companies. Compare the plans in terms of the sum insured, inclusions and exclusions of the policy, etc. This would help you narrow the search for the best car insurance policy.

Ask for add-ons

Add-ons or riders are additional coverage elements that one can purchase by paying an additional premium over the quoted one. This facility is available only to comprehensive insurance policyholders. The add-ons widen the overall coverage of the insurance policy and provide coverage against specific damages that are not included in the standard plan. While purchasing the policy, always ask the insurance company about the add-ons available and choose from them as per your requirement.

Know how to claim

A primary objective of purchasing a car insurance policy is to get immediate financial assistance after an accident for the damages. Hence, it is paramount to have a policy that comes with an easy, quick and streamlined claim process. Surely, you don't want the hassle of a complicated procedure to get compensation for the damages. Hence, before buying the policy, always know thoroughly about its claim process.

Check claim settlement ratio (CSR)

Always check the claim settlement ratio (CSR) of the insurer from whom you will purchase the policy. This is a very important factor before you select and buy an insurance policy. The CSR indicates the number of claims the insurance company has successfully settled against the number of claim applications received in one year. It is always recommended to purchase a policy from an insurer with high CSR. This would ensure that you have better chances of getting your claim approved.

Don't hide or provide wrong information

Many car insurance buyers often provide incorrect information about their age and driving history to reduce the premium amount. While this strategy may seem lucrative, it can prove to be a costly mistake while filing a claim. If the insurance company finds the information provided is wrong, it can cancel the insurance, which will make all coverage void. It is always recommended to be honest and provide accurate information while applying for an insurance policy.

Read the terms and conditions

We often neglect the terms and conditions written in fine print in the police documents. However, they actually provide vital information about the insurance scheme. Hence, it is suggested to take time and read the terms and conditions thoroughly before buying the policy.

How to right car insurance
Step 1 :

Know your requirement

Step 2 :

Search and compare plans

Step 3 :

Ask for add-ons

Step 4 :

Know how to claim

Step 5 :

Check claim settlement ratio (CSR)

Step 6 :

Don't hide or provide wrong information

Step 7 :

Read the terms and conditions

First Published Date: 22 Jan 2023, 15:28 PM IST
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