The moment any vehicle hits the road, the owner of that vehicle is liable for making the insurance policy. As per the Motor Vehicles Act 1988, it is mandatory for everyone to take the car insurance policy. The car insurance policy may cost you in the start but it protects you from the huge cost which arises in case of a peril situation.
Car Insurance is a policy which indemnifies the cost caused due to any unforeseen accident and damages to the car. The policyholder is responsible to pay a fixed amount (premium) to the insurer as per the terms and conditions of the car insurance policy.
Let us understand the factors which will help to choose the best car insurance.
Types of Policy
Generally, the car insurance company offers the following two insurance policy,
Third Party Liability Insurance
This plan is mandatory for all the vehicles plying on Indian roads. This policy covers the damages to property, accidental death or bodily injuries caused to the third party in a mishap.
A comprehensive car insurance Policy covers both own damages and legal liability of the third party. It protects the car from damages due to natural calamities, man-made disasters, and external accidents. It also offers coverage for theft and in-transit damages to the car.
Understand your needs
Initially, an individual should be aware of his needs and requirements for the insurance policy. The premium cost of the car insurance policy depends upon the coverage you decide for the car. Make it clear about what things you want to protect. Sometimes covering less important thing could increase the premium cost.
Insured Declared Value (IDV)
IDV is the current market value of your car set by the insurer. You receive the amount similar to your IDV if your car gets stolen or damaged beyond repairs. The different insurance company offers different IDV for your car. Before checking the IDV offered by your insurer, keep a number in mind that is approximately equal to the current market value of your car. You can find the premium of any policy by entering some straightforward information into an online car insurance calculator.
Buying add-ons is an option you get with the comprehensive car insurance policy. As they are the additional coverage, every insurance company don’t offer you the add-ons as per your requirements. However, the most useful add-on covers are zero depreciation insurance and personal cover.
Zero Depreciation insurance
This policy covers the entire cost while repairing the car without any depreciation costs and other accidental costs that insurance companies do to reduce their liability. It means if your car gets damaged in a collision, then your insurer will claim you the total repair cost without depreciating the value of the car.
In the normal comprehensive insurance cover, the insurer includes the depreciated value of the car.
No Claim Bonus
Most of the time, the insurer miss taking this factor into consideration at the time of buying car insurance. If any policyholder doesn’t file a claim in the entire year when the policy is active, the insurer rewards the policyholder with No Claim Bonus. The policyholder gets some benefits on the premium cost by the insurer in NCB. Also, if you are switching the insurer, you can ask your current insurer to help you avail the NCB with another insurer.