Unlike a few decades ago, the Indian insurance market today offers a wide range of car insurance policy options to its customers. Insurers compete with each other on policy features, benefits, discounts, add-on options and more. You may buy the car insurance online or offline—based on your convenience.
However, policyholders frequently get confused while choosing a suitable plan for their car. Most of them end up picking the cheapest plan without really understanding the nitty-gritty of it. After all, you are paying for security from a mishap that may or may not occur in future. So, many people feel that there is no point in wasting their hard-earned money on insurance covers.
But choosing the plan with the lowest premium is a decision that may backfire at any time, and you may end up paying for a big chunk of the repair expenses from your own pocket in case of an unfortunate incident. Here are some things to keep in mind while choosing a four-wheeler insurance policy to ensure you make the right decision:
- Get a policy that provides extensive coverage
With the facility of purchasing car insurance online, you can go through the websites of several insurers and see the plans on offer without stepping out of your house. So, you save on your time and travelling costs.
If you compare the plans carefully, you will find that the policies with low premiums may have some limitations. Initially, you may save on your premium, but in case of damage, you will have to pay the major part of the expenses out of your own pocket while the insurer pays the balance amount. Before buying a policy, you should go through the exclusions and terms and conditions carefully to know what the insurer will cover. This would help you select a four-wheeler insurance that would provide maximum coverage even if the premium is high.
- A third-party car insurance policy provides limited coverage
A third-party liability policy is mandatory for a four-wheeler, and many car owners feel that it is sufficient. However, you must reconsider your decision if your car is less than 5 years old, no matter the model. The third-party policy premium fixed by the IRDAI (Insurance Regulatory and Development Authority of India) is intentionally made affordable as it is mandatory. The logic is that you are paying for something to avoid a liability towards a third party in the future. The liability itself can be unlimited in nature as it completely depends on the value of the third party’s property. This is fine as long as your car is not damaged in an accident. If your car is badly hit, you will not get any cover under this policy. The entire repairing or replacement cost has to be borne by you. A third-party policy is limited to cover all losses related to only the third-party property. So, it is better to get own damage four wheeler insurance or a comprehensive policy to protect your car.
- A basic own damage car insurance policy may not be adequate
Suppose you buy an own-damage policy by paying an extra premium to cover your car. You may think that it is sufficient as it covers both accidental and non-accidental damages. There would still be certain exclusions that you will find on the policy document. The exclusions include depreciation, regular wear and tear, certain non-accidental damages, etc.
You can solve the problem by buying various add-on covers that are customised according to your needs along with your own damage policy. You cannot purchase add-on covers with standalone third-party four-wheeler insurance. So, a comprehensive policy may be the best option available.
Comprehensive car insurance is the best.
A comprehensive policy has features of both third-party car insurance and own damage cover. You can also buy suitable add-on covers along with this policy. For imported or expensive cars belonging to the category of sedan or SUV, the cost of replacement or repair is usually very high. Most of the time, the car parts have to be imported. So, invest in a comprehensive policy with suitable add-ons to avoid future expenses. In case of damage beyond repair or car theft, this policy would help you get the entire sum insured which is equal to the IDV (Insured Declared Value) or market value of the car.
After going through the above parameters, you can decide which would be the best car insurance policy for you. Even if you have to pay a higher premium, it is better to go for a plan that offers maximum coverage.