Vehicle insurance is more than a legal requirement offering protection to your vehicle. Not only it helps avoid hefty fines, but it also helps protect against repairs that may result in financial losses arising due to accidents or collisions. Apart from accidents, theft, natural calamities, and man-made perils are some other situations when a motor insurance comes handy. But considering the plethora of alternatives, it can often be confusing selecting the appropriate insurance cover for your vehicle. This article aims to simplify the buying of your motor insurance plan and provide you a checklist to follow the next time you are buying one:
- Familiarise with the type of insurance plan
The first point when making a choice of motor insurance policy is to ensure the right type of policy is bought. Motor insurance plans are of two types—third-party plans and comprehensive plans. While you have the option to select either policy, a third-party coverage is the bare minimum as per the Motor Vehicles Act. So irrespective of the insurance policy you buy, it must include coverage for third-party liabilities.
A third-party cover offers protection against legal liabilities that may arise as a result of accident or damages. Not just property damage, but injuries to such third person are also covered by a third-party plan. Since this coverage is the most basic motor insurance for all vehicle owners, its premiums are regulated by Insurance Regulatory and Development Authority of India (IRDAI). You can visit the official website of IRDAI for further details.
Contrary to third-party plans, comprehensive policies are an alternative for vehicle owners who want more than the basic insurance coverage. These comprehensive policies provide protection not just for third-party liabilities but also those repairs that are required to your vehicle. *
- Setting the right IDV
IDV or insured declared value is an important point to tick off not only during insurance purchase, but also at the time of vehicle insurance renewal. It is the maximum amount which the insurance company compensates in the event of a complete loss or damage to the insured vehicle. Understating such IDV will result in a financial loss during the claim. Consequently, overstating will push up the premium. Thus, it is crucial to set the right IDV. *
- Know the insurance coverage
After selecting the right insurance plan and setting its IDV right, it is essential to know which perils are covered in the policy’s scope. A thorough reading of the insurance policy’s terms will help you understand what is included and excluded. *
- Check for add-on covers
Add-ons are insurance covers that can be purchased over and above the standard comprehensive insurance policy. It helps to strengthen the scope of the policy and the include more events in the policy coverage. While there are myriad add-ons that can be purchased, selecting only the ones that add value is essential. Excessive purchase of add-ons not just increases the premium but offers no real benefit. Add-ons are not available for purchase when you buy a third party insurance plan. *
- Understand which factors impact the premium
Once you have shortlisted all the coverage and add-ons to purchase, make sure to understand the impact of each of them on your premium amount. This way, you can balance the cost vis-à-vis the benefits offered by your insurance cover. *
* Standard T&C Apply
Apart from those mentioned above, as a smart buyer, you must also look for the network coverage for cashless repairs as well as the claim settlement ratio of the insurer. These pointers help to buy a robust policy that offers a 360-degree protection to your vehicle keeping financial worries at bay. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.