5 Important Tips for a Car Insurance Beginner

Once you buy the car of your dreams, the next step is to adequately secure it with the right car insurance policy. However, buying four-wheeler insurance can seem like a daunting endeavour for beginners, so we have created a first-time car insurance buying guide with important points to remember. Here are the top five things to know about car insurance:

Check the Coverage Offered

The most crucial aspect of any car insurance policy is knowing how much coverage is being offered by your insurance provider. There are essentially two kinds of motor insurance coverage: third-party car insurance and comprehensive car insurance. Third-party insurance is the mandatory cover that every vehicle owner is expected to have to legally drive on Indian roads. It covers damages and liabilities to the third party in the event of an accident. These liabilities include damages to the property of the third party and death or injury to the third-party person. However, a drawback of third-party coverage is that it does not compensate for any damages to the insured vehicle.

Comprehensive car insurance, on the other hand, compensates for liabilities to both the third party and the insured vehicle. It offers rounded protection as you don’t have to bear the cost of damages to your vehicle from your pocket. Comprehensive car insurance is necessary for financial security, as without this cover, car owners will have to bear the cost of damage themselves, which can burn a hole in their savings. Although comprehensive four-wheeler insurance is not mandatory, securing your car with this well-rounded protection is always advisable. Before selecting a policy, carefully analyse your requirements to know what should be included in car insurance.

Know the Difference Between Insurance Premium and Insured Declared Value

Insurance terminologies and jargon can confuse you, and where matters of money and security are concerned, you must always seek clarity. With a surface-level reading, insurance seekers and beginners might confuse the terms ‘premium’ and ‘insured declared value.’ Needless to say, there is a vast difference between the two.

Insurance premium refers to the amount that is payable by the policyholder to the insurance company in exchange for the latter providing the insurance service. In other words, a car insurance premium is an amount that is paid to purchase insurance coverage so that it secures you against the damages your vehicle may sustain. The premium amount is influenced by several factors, such as the age of the driver, driving and claim history, make and model of the vehicle, etc.

Insured Declared Value (IDV) is the current market value of the vehicle that is being insured. It is the total value that the policyholder will be compensated with in case their vehicle is stolen or suffers a total loss. The two factors influencing the IDV are the current market value and the depreciation borne over the years by the car.

Acquaint Yourself with the No Claim Bonus (NCB)

The no-claim bonus (NCB) plays a pivotal role in lowering the premium for your motor insurance. And so every insurance holder must know what the term means. Essentially, the NCB is a discount on the premiums given by your insurance provider for not raising any claim during the policy term. Every time you renew your car insurance coverage, you can make use of the NCB to lower your premium.

If a policyholder does not raise a single claim for five consecutive years, they may get a discount of as much as 50% on their premiums. Learning about this enticing benefit early on can help an individual save a lot of money in the long run.

Get Add-ons to Strengthen Your Coverage

Even your comprehensive car insurance cannot secure you against everything. And for that reason, insurance providers offer additional benefits that can be purchased to enhance the basic coverage. These benefits can be availed by an insurance seeker by paying an extra premium. If you have newly purchased your car and need additional layers of security, you can invest in add-ons such as Engine Secure, NCB protection cover, return to invoice cover, etc. The comprehensive four-wheeler insurance by Tata AIG comes with a choice of 12 unique add-ons to enhance your basic coverage and offer you better road security.

Prior to choosing a motor insurance policy and strengthening it with an add-on, it is always advisable to carefully analyse your insurance needs. This way, you can find suitable coverage that will afford you security and peace of mind.

Don’t Shy Away from Voluntary Deductibles

Deductibles refer to the amount the policyholder is expected to pay every time he/she raises a claim. The insurance provider pays the balance amount to compensate for the damages. Deductibles were introduced to prevent raising fake claims.

Voluntary deductibles are the amount the policyholder agrees to pay from their pocket while raising a claim. Individuals can opt for a zero voluntary deductible policy but will have to pay a higher premium. Contrarily, if you opt for a higher voluntary deductible, your car insurance premium will be lower.

As a new insurance seeker, knowing everything about buying insurance right from the beginning is impossible. However, researching before investing in a cover can help you save a lot of money and learn important aspects, such as what should be included in car insurance. Following the aforementioned tips can help insurance seekers invest in reasonable coverage. Before wrapping up, a bonus tip is to always buy insurance online because it enables easy comparison of policies and lowered premiums payable.