Basics of Car Insurance Every Beginner Should Know
November 13, 2019
Just like all the other types of insurance, there are a few important things that one should know about vehicle insurance. If you have purchased your first car and are looking for insurance, some of the most important things that you should know are discussed in this post.
If you are planning to purchase a car, it is essential for you to first understand your needs as well as that of your family. Right from the type of car, model, economy, colour, to its cost, you will have to go through several factors very carefully to make the right buying decision. Once you have finally made up your mind, the next step is to pick car insurance.
Just like you have made sure that the car you are buying perfectly suits your requirements, you also need to make sure that you purchase car insurance as per your needs. There are now several insurance providers in India and many different types of vehicle insurance policies that often make selection difficult, especially for first-time buyers.
Understanding car insurance is the first step in making the right decision. If you want to purchase car insurance, here are some of the most important things you should know about:
How does Car Insurance work?
When you purchase Car Insurance, you sign an agreement with the insurance provider wherein, you agree to pay the premiums, and in return, the insurance provider will cover your car against damages or losses. Based on the year of purchase, car model, type of policy, and a few other factors, the insurance provider will calculate the maximum insured amount for your car.
This is the maximum amount that the insurer will pay against the losses or damage caused to your car. But the policy will only remain valid as long as you continue paying the premiums on time.
What are the different types of Car Insurance?
There are basically two different types of Car Insurance available in India - third party and comprehensive. A third party policy will only cover damages/injuries caused to the third party in an accident involving your vehicle. As per the Motor Vehicles Act of 1988, third party insurance is mandatory for every car in India.
As this insurance is mandatory, Car Insurance quotes for this type of policy are more or less the same. With a comprehensive policy, third party, as well as your damages/injuries, are covered. There can be a considerable difference in the premiums of comprehensive policy offered by different insurance providers.
How to buy Car Insurance?
You can purchase Car Insurance offline or online. For offline purchase, you can get in touch with an insurance provider or insurance agent. With online purchase, you can visit the official website of the insurance provider to purchase the insurance on your own.
As compared to offline purchase, online purchase is known to be more convenient, and the premiums of online policies are known to be cheaper too. Moreover, with detailed Car Insurance comparison online, you can make sure that you are selecting the right policy.
How to select the right Car Insurance?
There are a few important things that you should look into when purchasing Car Insurance. Some of the most important ones are-
- Reputation of the insurance provider
- Type of policy
- Insured Declared Value (IDV)
- Inclusions and exclusions
- Features and benefits
- Voluntary or compulsory deductibles
- Cashless facility at network garages
What is No Claim Bonus?
No Claim Bonus (NCB) is the bonus you get for not filing any claim in a year. You get a <20>% discount on your Car Insurance premiums for the first no-claim year.
Until the sixth no-claim year, the NCB can reach up to <50>%. The NCB cannot be more than <50>% of the policy premiums. You can use the NCB even when you switch between insurance providers.
Ready to purchase your first Car Insurance?
Now that you know the basics of Car Insurance, it is time for you to start comparing the policies online and pick one as soon as possible. In case of any queries, you can always get in touch with the insurance provider.
Prefer online Car Insurance and select a reputed company to make sure that your expensive purchase remains adequately protected at all times.
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