Four wheeler insurance is a mandated insurance cover for all vehicle owners in India. Every vehicle, whether a car, truck, tractor, or two-wheeler, should be covered by its insurance policy. Its primary goal is to provide absolute protection against any damage or loss incurred to the insured vehicle due to natural and man-made disasters and any third-party liabilities arising from the insured vehicle.
It is critical to understand various aspects of car insurance before purchasing a policy for your new car. You can make wise purchase decisions when you are well-informed about these topics.
The five essential aspects of car insurance for beginners are listed below.
- Recognize the available coverage:
The policy’s coverage is one of the most important aspects of car insurance for beginners. India has two types of motor insurance policies: third-party liability and comprehensive coverage.
A third-party liability car policy will compensate you for any third-party accidental liability caused by your vehicle. These liabilities include third-party demise, injury, or property damage. Furthermore, this policy coverage is legally required for all car owners in India. However, third-party liability insurance will not protect your vehicle from damage.
- IDV vs premium:
You must have come across the terms premium and IDV while looking for a four-wheeler insurance policy. Both terms can perplex a beginner because they appear similar but are not.
Your car’s IDV, or Insured Declared Value, is the current market value of the insured vehicle. It is the amount that your insurance company agrees to compensate you for if your insured car is totalled. The current selling price and the depreciation borne by the vehicle over the years are used to calculate the IDV. Thus, before purchasing a motor insurance policy, understand these terms and make an informed decision.
Advice: Using an online car insurance premium calculator can help you identify the prices, premium and requirement better in order to find an affordable premium rate.
- Recognize the no claim bonus:
Before purchasing a car insurance policy, you should understand the No Claim Bonus, an essential tool for lowering your premium. A No Claim Bonus (NCB) is a reward on your policy renewal premium if you avoid filing a claim during the policy year. You can use the NCB to lower your premium when renewing your auto insurance policy.
- Purchase add-ons for expanded coverage:
A comprehensive auto insurance policy does not cover specific damages. For example, standard car insurance does not cover the cost of repairing non-accidental damage to your car’s tyres. You can, however, pay an additional premium to your insurer to obtain add-on coverage for these damages. If you own a brand-new car, you can include add-on covers in your car insurance policy, such as tyre cover, engine cover, NCB protector, return to invoice cover, and so on.
However, as a beginner in motor insurance, you may purchase all your insurer’s add-ons even if you don’t need them. This will eventually raise the car insurance prices of your four-wheeler policy. As a result, only purchase add-ons that you believe will be useful for your new car.
- Recognize voluntary deductibles:
Voluntary deductibles are another vital aspect of car insurance for beginners to understand. A motor insurance deductible is the portion of the claim amount you agree to pay as a policyholder at the time of claim settlement. If you choose a zero voluntary deductible, your insurer will pay the entire claim amount, resulting in a higher premium.
However, the four wheeler insurance company will pay the rest if you agree to pay a deductible. You can significantly reduce the cost of your four-wheeler insurance policy by choosing a higher voluntary deductible.
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.