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December 08, 2016 12:02

The mandatory nature notwithstanding, car insurance policy buyers can be broadly segregated into two groups. One who just blindly go along with whatever is offered to them & the others who are particular about what they want out of their policy.

The best car insurance policy is the one that offers the most coverage at the least cost. But there’s more to this than just the two conditions and this is why you need to read further below:

The first thing to decide is whether you want a ‘Third Party’ policy or a ‘Comprehensive’ one. The former only covers damage caused to a third-party or someone who is not the insured occupant of the car. So, for example, if you are involved in a fender-bender with another car, then under this ‘Third Party’ policy, only the other motorist will get damages reimbursed. All the damage to your vehicle will have to be borne by you out of your own pocket. On the other hand, under the ‘Comprehensive’ policy coverage, you can claim damages to your own car as well.

The IDV or insured declared value is a key factor in the premium paid for the insurance policy. Many owners tend to understate their IDV for a lower premium, especially for more expensive cars. Car insurance companies have repeatedly stressed upon the dangers of this practice, which result in a major financial hit in the unfortunate case of a ‘total-loss’. When a vehicle is ‘written-off’ the value is reimbursed to the owner. Now, if the owner has gone in for a lower IDV, then they’ll be left with a bigger hit to their finances.

When buying a car insurance policy, smart buyers know how to drive down their premiums. The ‘No-claim Bonus’ or NCB is a firm favourite among them. Simply put, insurers give a certain discount at the time of policy renewal for not having made a claim in the previous year. This is akin to rewarding motorists for good driving behaviour. Accumulated over time, it can reduce premiums by close to 50%. And if that’s not sufficient, the NCB on an old policy can be transferred to a new car purchase. This, if used intelligently, can easily result in thousands of rupees saved on insurance purchases.

Voluntary deductibles too are a good way to get away with paying lower premiums. Insurers also reward motorists who settle small claims out of their own pocket, with premium rebates. Thus, that mirror replacement, or minor scratch repairs that can easily be paid for out of pocket, could result in close to 30% savings on premium.

Car insurance companies these days offer a decent grace-period on renewing policies. Thus, there’s no real excuse to not having a valid insurance policy in place for your car.

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