5 Factors To Consider When Buying Vehicle Insurance

Buying vehicle insurance is not just a legal requirement but also an important way to protect yourself from unforeseen expenses related to accidents, theft, or damage to your vehicle. With numerous options available, selecting the right insurance policy can feel overwhelming. To simplify the process, here are five key factors you should consider when buying vehicle insurance.

1. Type of Coverage

The first and most crucial factor to consider when purchasing vehicle insurance is the type of coverage you need. In India, there are two primary types of vehicle insurance:

• Third-Party Insurance: This is the minimum legal requirement. It covers damages to a third party in case of an accident, including property damage, injury, or death. However, it does not cover damage to your own vehicle.
• Comprehensive Insurance: This policy covers both third-party liabilities and damages to your own vehicle due to accidents, theft, fire, or natural disasters. Comprehensive insurance provides broader protection and peace of mind.

If your vehicle is relatively new or high-value, opting for comprehensive coverage is often more beneficial, as it covers a wider range of risks.

2. Insured Declared Value (IDV)

The Insured Declared Value (IDV) of your vehicle is the maximum amount the insurance company will pay you in case of total loss or theft of your vehicle. It represents the current market value of your car, accounting for depreciation. Understanding IDV is crucial because it directly impacts both the premium and the claim amount.

• Higher IDV: A higher IDV means better coverage in case of a total loss, but it also comes with a higher premium.
• Lower IDV: While a lower IDV reduces your premium, it also decreases the compensation you would receive if your vehicle is stolen or totaled.

Make sure the IDV offered by the insurer reflects the accurate market value of your vehicle, ensuring you get appropriate compensation without overpaying on premiums.

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3. No Claim Bonus (NCB)

The No Claim Bonus (NCB) is a discount offered by insurance companies to policyholders who do not file any claims during the policy period. This discount can significantly reduce your premium and can increase with each claim-free year, up to a maximum limit (usually 50%).

When choosing an insurance plan, look for:

• NCB Benefits: Ensure the insurer offers a good NCB structure. The more years you go without filing a claim, the greater the discount on your renewal premium.
• NCB Protection Add-On: Some insurers offer an NCB protection add-on, which allows you to retain your NCB even if you make a claim during the policy period.

NCB can save you a lot of money over the years, making it an essential factor to consider when purchasing vehicle insurance.

4. Add-Ons and Riders

Vehicle insurance policies offer several add-ons or riders that enhance the coverage of your standard policy. Some of the most common add-ons include:

• Zero Depreciation Cover: Without this, the insurer will account for depreciation when settling a claim, meaning you’ll receive less than the actual repair costs. This add-on ensures full reimbursement for repair or replacement of parts.
• Roadside Assistance: Provides services such as towing, flat tire assistance, and emergency fuel delivery in case of breakdowns.
• Engine Protection Cover: This add-on covers engine damage caused by waterlogging or oil leakage, which is typically not covered by standard insurance.
• Personal Accident Cover: Provides coverage in case of accidents causing disability or death of the owner-driver.

While add-ons increase your premium, they can offer valuable benefits in times of need. Carefully consider which add-ons suit your driving habits and the conditions in which you use your vehicle.

5. Claim Process and Insurer Reputation

The final but equally important factor to consider is the claim process and the reputation of the insurer. In the event of an accident or damage, a smooth and hassle-free claim process is essential. When evaluating an insurer, focus on the following:

• Claim Settlement Ratio: This indicates the percentage of claims settled by the insurer against the total claims filed. A higher ratio suggests a more reliable insurance provider.
• Claim Process: Opt for insurers that offer a straightforward and efficient claim process, including options for online claim submission and cashless settlements at network garages.
• Customer Reviews: Research customer feedback and reviews to gauge the insurer's reputation for claim handling, customer service, and overall experience.

Choosing an insurer with a good claim settlement record and positive customer reviews will ensure that your claims are handled promptly and without unnecessary delays.

Conclusion

Buying vehicle insurance is a critical decision that requires careful consideration of several factors, including the type of coverage, IDV, NCB, add-ons, and the insurer's reputation. By evaluating these factors, you can choose a vehicle insurance plan that offers comprehensive protection for your vehicle while also providing value for money.

For expert guidance and personalized insurance solutions, reach out to Bhartiya Beema. We can help you find the best vehicle insurance policy tailored to your needs, ensuring your car is protected on the road, no matter what.