Having a car insurance plan is not just mandatory but quite useful too. When you have a car insurance policy, the insurance company where you have insured will pay for the damage and also repair. At first, you have to fill the amount of an annual insurance premium with a given time to get the benefits.In short, your insurer will cover your financial loses whenever your vehicle is involved in an accident thus lowering your financial complications in times of crisis. But, before you spend your money on buying a car insurance plan, you must keep a few tips in mind.
The following things should be considered
- Do your homework
In the market, one should know about all the available details of the insurance policies. Look out the correct online source and differentiate policies basis of different parameters like claim settlement ratio, coverage, additional benefits, low premium cost etc. To know quickly, one should make use of the online car insurance calculator and check which one offers more benefits at a reasonable price.
- Understand what is best for you
Claims settlement – There are three crucial insurance claim ratios one needs to perceive. They are:
Claims Settlement Ratio = number of claims settled / number of reported claims + remaining claims at the beginning of the year – remaining claims of the year
Claims Repudiation Ratio = rejected claims / total claims
Claims Pending Ration = outstanding claims / total claims
Claims data will help you in analyzing the insurance company’s history and its procedure for handling claims. Remember that insurance companies that are fairly new in the market will offer low premium rates. These claims’ data will help you in providing with vital information regarding your insurer. It will be the final determiner in choosing one particular company. If you are unsure between two companies, check their claims data.
- Understand the policy
An insurance policy document is a legal paperwork that contains technical words which laymen people find hard to understand. A complete detailed reading of the document before signing on the dotted line is essential if you want to avoid confusions and misunderstandings in future Points to check in your policy document before signing:
- Who is covered?
- Things covered, meaning, what it includes, excludes and limitations.
- When the agreement starts and ends?
- How much you will need to pay periodically for a certain period for this coverage (i.e. your premium)
Talk to an insurance expert about the different Types Of Car Insurance, their benefits, terms and conditions etc.
- Credit Score and Car Insurance
Insurers bring forward the most suitable and the lowest possible premium rates based on your credit-based insurance score. An ideal credit score is decided based on the following factors:
- Your previous payments, late payments and offences.
- Length of your credit history
- Different types and the number of credits, such as loans and credit cards
Age, wedded status, nationality, sex, address and income are never considered when your car insurance credit score is decided. So, you must keep your credit score good enough.
- Go for Personal Accident Cover
In India, around 1214 road accidents occur daily, so no one can guarantee their safety against any serious financial emergency in the upcoming times. Hence, it is better to have a personal accident cover. This kind of cover provides you with these benefits:
- Accidental death from an unfortunate accident
- Partial or total handicap from an accident
- Separation of limbs due to accident
- Injuries and death due to an act of terrorism
- Daily expenses when hospitalized
- Know about compulsory deductibles
The minimum amount every policyholder has to pay for every insurance policy is what we call a compulsory deductible. This minimum amount is from INR 500 for a four-wheeler. According to the rules of insurance regulatory and development authority of India, the amount is decided. For an old four-wheeler having higher claim risks, the policyholder might be charged a higher deductible. Also, cars having higher cubic capacities attracta high deductible.
Voluntary deductibles are not compulsory. Unlike a compulsory deductible, these help in lowering the amount of premium. If you avail this facility, you can share the repair expenses when a claim is made which lowers the insurance premium amount.
- Know about the No-Claim Bonus (NCB)
If you haven’t claimed your insurance policy for once during an entire year, you get an additional benefit known as a no claim bonus. This comes into play when no claims have been made. It helps you fetch about 5 to 10 percent of the IDV as a bonus when you renew your insurance policies. The maximum bonus on the last year’s premium you can receive is 50%.
- Go for a company offering cashless facilities
If the insurance company provides you with a cashless option, it’s a good choice to opt for. As in times of emergencies, you wouldn’t have to go around searching for the required cash amount. However, this shouldn’t be your deciding factor while choosing an insurance company. Take into account all the above-mentioned factors, and if you can avail this facility from your chosen insurance company, it’s a big plus.
- Check how many garages are in its cashless facility
See whether you have enough number of garages in close vicinity in tie-up with the insurance company that you are thinking of choosing. For this, you can go around, ask people and make an informed decision.
- Other factors
Living in a metro city will make you pay higher insurance premium amounts compared to the costs that you have to incur for the same model of your car if you reside in a rural or non-metropolitan area. Your car’s geographical location has a role to play in determining the premium you have to pay. Also, the higher the cubic capacity of your car’s engine, the higher will be your insurance costs.
These days, people generally prefer pursuing an insurance policy online since it is both affordable and a faster way to get your formalities done than by normal paperwork. Also, you can visit various sites before choosing the one that caters to your budget and requirements. Your insurance papers can be accessed from anywhere, anytime online.
