When it comes to buying an auto insurance policy or renewing an existing one, many car owners make a hurried decision. They buy car insurance as a formality without giving it enough thought. Most of the times, low premium costs are the only deciding factor while picking a car insurance policy. Hence, we end up with an insurance policy that only serves the legal aspects as devised by the vehicle insurance laws. But, it fails to provide reasonable benefits to the car owner.
Buying car insurance should be given as much thought as buying a vehicle. A well-researched decision to choose an auto insurance policy will provide the policyholder adequate protection cover in case of an accident or damage. Insurers today have a wide variety of insurance options to choose from, each of which provides certain added benefits. It is wise to go online and study different facets of insurance products and compare them by several parameters including premiums, service, and add-ons. A little understanding of car insurance can optimize your insurance purchase and provide you greater benefits.
Here is a compilation of important aspects you need to look out for when finalizing a car insurance plan.
Know the insurance:
There are some important features that you need to look for when choosing a car insurance policy. One of the characteristics is the type of insurance and premium. Car insurance policies are broadly categorized into two types:
- Third-party car insurance policy
- Comprehensive car insurance policy
In some cases, you might only need third-party car insurance which covers third-party liability in case of an unfortunate event. A third-party is anyone who is neither insured nor the insurer. It only covers damages to others in case the policyholder faces any mishaps such as a car accident. It may not provide any benefit at all to the owner should the need for a claim arises.
However, if you drive a heavy vehicle over long routes for longer times, you need to choose a comprehensive insurance policy. It costs more but may provide cover to both the victim and the owner of the vehicle in case of an accident. Additionally, a comprehensive insurance policy will protect your car against theft, accidental fires and other damages selected in the insurance plan. If the risk is more, it is better to choose comprehensive policies. This will provide more protection to the policyholder and others involved in a mishap.
Know the coverage:
There are several insurance options available, each one of them offers different coverage at different levels. Some of the coverage options available to a car owner are liability coverage, medical payment coverage, collision coverage, and personal injury coverage. While you can opt for the coverage of your choice, it is essential to know that the type of coverage you take will impact your insurance premium. The more coverage you seek, the higher the premium that you will have to pay. Carefully understand these factors before applying for car insurance.
Check for the insurer declared value:
Insurer declared value or shortly IDV is the maximum amount you can claim for your car. This is in case of theft or complete damage where the car ends up at a garage of scrap car buyers. The agent may lure you into lower premiums and may lower the insurer declared value for your vehicle. You need to be vigilant and ensure that the IDV is no less than what it should be. An optimum car insurance deal is the one that provides the highest IDV at the lowest possible premium.
Many insurers provide special facilities to assist the policyholders. Individuals who are open to more spending on a vehicle’s insurance policy should compile a list of the features they want in the insurance plan. These features include breakdown assistance, wherein the insurance policy provides a helpline and roadside assistance. You can also get assistance in case you lose your car key.
Other features include personal accident cover for the family of the policyholder in case of disability or death. You can also opt for natural calamity cover. This will protect you against damages caused by certain defined natural calamities such as floods and storms. Car insurance policies are generally calculated based on the depreciation value of the vehicle as it gets older. Choosing a zero depreciation cover assures the entire claim amount without considering the depreciation sum.
No Claim Bonus (NCB):
Many insurance agents provide benefits, generally in the form of discounts on the annual premium payable. This is offered to the car insurance policyholder in case they don’t file any claims during a year. Before zeroing down on an insurance policy, one must learn about the NCB to get the most out of the policy. For instance, a damage that would cost you less than the no claim bonus can be paid out of your own pocket. Therefore it makes you a contender for the no claim bonus. Being aware of the NCBin a car insurance policy helps you to decide on whether or not to file a claim.
Opt for voluntary deductibles:
In some cases, the policyholder agrees to share the cost of repair in case of any claim. This can significantly lower the premium for your insurance plan. If an insurer opts for higher deductibles, they agree to pay the remaining amount of damages in case of an accident. A higher deductible will also lead to a lower premium.
Insurance companies take into account your driving record, the type of vehicle and your place of living when making a risk profile. However, insurance companies receive different claims, and their experience will affect how they assess you. So, the rates may vary from one insurance service provider to another for the same insurance coverage, vehicle, and driver. Take out time to research and get quotes from multiple insurance companies and choose the one that offers the best deal.
While buying car insurance, make sure you understand these aspects of your insurance plan and compare them to your requirements. This detailed checklist will simplify the daunting task of buying car insurance for teenagers. It will help you arrive at a comprehensive plan that is cost-effective and suits your needs.