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Business News/ Money / Personal Finance/  Gear Up for the Unexpected: 8 key factors to consider when buying car insurance

Gear Up for the Unexpected: 8 key factors to consider when buying car insurance

Selecting the right car insurance involves understanding evolving options and mandatory requirements like third-party coverage. Consider factors such as IDV, deductibles, add-on covers, and innovative solutions like PAYD insurance.

A Guide to Choosing the Perfect Car Insurance in 2024Premium
A Guide to Choosing the Perfect Car Insurance in 2024

In the ever-evolving landscape of auto insurance, finding the perfect coverage requires a thorough assessment of policy options. The concept of motor insurance continues to evolve, driven by rapid technological advancements. This dynamic environment presents both opportunities and challenges for the insurance industry to meet the unique needs of millennials and Gen Z.

Driving without a valid car insurance can lead to a hefty fine and even imprisonment. To avoid such situations, it is crucial to have a third-party insurance policy. If you are struggling to choose the right car insurance after purchasing a new car here’s your guide! Before you decide about which car insurance policy to go for, it is important to know that according to the Motor Vehicles Act, 1988, having a third-party liability car insurance policy is mandatory to drive your car (old or new) on any Indian road. 

Also Read: 5 Simple Ways to Save on Your Car Insurance Premium

So, as a new car owner, one of your top priorities before hitting the road should be getting the right car insurance. Also protecting yourself from financial losses if you damage your own car or need hospitalisation due to an accident is equally essential.

However, with so many options available, it is difficult to decide which policy to ultimately buy. Choosing the right insurance policy involves considering several parameters and here are a few latest trends which you should consider before purchasing a policy.

With the emergence of innovative solutions like Pay-As-You-Drive (PAYD) insurance and the compulsory nature of third-party motor insurance, it is essential to understand your own requirements. No two drivers are alike in their driving habits and behaviour, leading to differing insurance needs. If you are a frequent commuter, a weekend driver, or someone who uses their vehicle sparingly you can actually buy a policy depending on your driving requirement. 

Also Read: How to avoid car insurance claim rejection? Here are 7 preventive measures

If you prioritise cost savings, comprehensive coverage, or additional perks such as breakdown assistance and zero depreciation cover, considering these crucial factors will help you to identify the most suitable insurance plan tailored to your lifestyle and preferences.

In addition to PAYD insurance, it's important to evaluate whether additional insurance features such as roadside assistance, rental car coverage, and accident forgiveness align with your needs and justify any potential increase in premiums.

When evaluating insurance options, consider key factors such as: 

Engine type: Insurance coverage need varies for petrol/ diesel and EV/ hybrid engines.

EV and hybrid vehicles have additional coverage requirements, check if your insurers offer coverage to include charging cables, connectors, adapters, and all standard charging accessories for protection against accidental damage and theft and comprehensive coverage for privately-owned charging stations solely used for charging insured vehicles, safeguarding them against fire, theft, and accidental damage.

Check if your insurer offers battery coverage for loss or damage to your insured vehicle caused by fire, self-ignition, or short circuit while it's either charging its battery or parked at a charging station and in case of consequential loss to battery or parts of battery due to water ingression due to insured peril/short circuit.

Also Read: Car insurance: Why should you opt for ‘Pay as You Drive’ cover?

Coverage Needs: Assess the level of coverage required based on factors such as the value of your vehicle, financial situation, and legal requirements in your area. While comprehensive coverage offers maximum protection, liability-only or collision coverage may suffice for some drivers.

Insured Declared Value (IDV): Choose a provider offering customizable IDV values to maximise your benefits. This is especially important for used cars as sometimes the market value of the car is higher than IDV, so customers should optimise their IDV value in such cases.

Deductibles and Premiums: Strike a balance between deductibles and premiums that aligns with your budget and risk tolerance. While a higher deductible typically results in lower premiums, it requires greater out-of-pocket expenses in the event of a claim.

One should consider buying comprehensive car insurance that covers financial losses for damages to your car due to a collision or accident, cover for theft of your car, protection against damages caused by fire, coverage for natural calamities like floods, earthquakes, cyclones, etc. personal injury, or death arising from an accident. In addition to these features, here are some extra parameters to consider when selecting a policy.

Add-On Covers: options like zero depreciation cover, breakdown assistance, tyre protection, engine, and gearbox protection, return to invoice cover, and more can provide additional benefits. Claim Settlement Process and Ratio: Look for a company with a high claim settlement ratio and an easy online claim settlement process.

24X7 Assistance: Opt for companies offering round-the-clock customer assistance for convenience.

Network Garages: Check the number of network garages under the insurer to ensure easy access to cashless facilities.

Streamlined Claim Process: Look for insurers offering streamlined processes like smartphone-enabled self-inspection to simplify claim raising.

By considering these factors, you can select a car insurance policy tailored to your needs and preferences. So, secure your car with the right insurance today!

Pooja Yadav, chief product officer, Zuno General Insurance

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Published: 22 Apr 2024, 09:13 AM IST
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