How to choose the correct Insurance for your car?

First time car buyers are always being cheated by the companies when you take car insurance policies. When we buy a new car, most of the dealers will never disclose the insurance company name and detailed split up unless you ask for it. The reason is, they have a good margin and commission for giving a high premium insurance to the customer.

You will know about this when you go for a renewal next year.

These are some of the important points to remember when you buy or review a car insurance in India.

1. Understand vehicle value and depreciation every year. This helps in choosing right IDV (Insured Declared Value).  Normally a new vehicle can depreciate 20% in first year of ownership. Hence you make sure the 2nd year insurance IDV should match this.  From third year onwards, the vehicle value can be  depreciated 10% every year.  

Suggestion is, keep your IDV to the maximum whenever you renew insurance.  Agents will reduce the IDV and give you a lower quote, this is just to please you by giving low premium amount. Never believe it. 

2. Engine Cover and Extended Warranty, remember that you don't need an engine cover protection plan in the insurance when you already have extended warranty. Most of the cars coming now has more than 2 years of warranty and you have an option to extended it further too. Therefore no point of paying engine cover in insurance as well. You can opt that out when you renew insurance. 

3. Opt for the best online offers - Insurance always has online offers and credit/debit card offers, try opting then when you do it online. Insurance agents will collect commission and other service charges. As insurance is an unlucky winner's play, whatever you pay is going in air unless you end up in an unlucky situation and claim it. 

4. Always prefer 'Zero Depreciation Policy' otherwise called 'Bumper to Bumper Insurance' - Zero depreciation ensures no depreciation in the IDV value. Example, you took insurance in January and you are processing a claim in December, there wont be any depreciation in the car value and you get the full IDV benefits. If your car is fully damaged or stolen and requires a full claim, then you get your complete IDV value reducing the claim processing fee. 

Hence take zero depreciation policy if your car can be in risk where you use it, example metro cities where theft can happen or areas where natural calamities like flood or land slides occur.
5. Renew On-time - Try to renew your insurance a month back of expiry that gives you enough time to analyze, compare and check for offers. 

6. Look for the insurance company branches near your location for any direct communications required when there is a claim process happening. We cannot fully depend on customer support numbers always.

7. PA cover for driver - You can add additional cover for your driver and this will be checked when an agent renew your insurance, if you are the one who drives the car and you have separate health and life insurance policy. You can remove it from the car insurance as its an additional expense. 
8. Other features that you need to consider, that may or may not be applicable for you, 

  • Road Side Assistance - Prefer if your car company / brand is not providing you this during break down. 
  • Easy Claim Process - Check the normal claim process of the insurance company and see if that is convenient. 
  • Policies - Checkout all the insurance policies and what covers and what wont cover in a car insurance.
If you care these things before selecting an insurance, you win!! Understand the Insurance well before you go for it. Happy and Safe Riding!!!


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