Here’s How to Get the Best Insurance Plan in 2021

You need to get car insurance if you own and use a car for daily commute. In fact, you can’t use a car in India without basic car insurance. However, the important point to understand here is the amount of car insurance you need to be safe while on the road.

There are many insurance companies now which offer a wide range of products and services like extensive cover, limited cover, add-on covers, etc. If you get a comprehensive cover, you can get add-on covers to get it fine-tuned to your needs. Limited covers have fewer benefits. Whether you are a car enthusiast or a teenager who is just learning to drive, there is a deal for you.

However, car insurance policy documents and brochures are notorious for having technical jargon which the common man cannot understand. In this article below, we are going to unravel such complications to help you make an educated purchase.

Understanding car insurance

In India, there are two types of car insurance plans. These are:

1. Third-party liability insurance plans: These are plans which offer protection from all legal liabilities coming out of events like third-party injury, death and property damages. The plan protects you from all legal issues in case you are responsible for the accident, leading to damages above. If you drive in India, it is the minimum level of cover that you need. If you are apprehended without this type of insurance cover, you will see heavy penalties, possibly even jail time.
   
   This insurance cover does not give coverage to the vehicle. That means if your car is damaged, you can’t make any claims with this insurance. Some insurance companies provide a Personal Accident cover for the car’s owner or driver, along with third-party liability insurance plans. It is cheaper than other types of motor insurance.
    

2. Comprehensive  car insurance plan
   
   This again has 3 main types of coverage:
   
   1. Owner-damage cover: It protects the car from damages like floods, lightening, landslides etc, man-made disasters like strikes, thefts, riots, etc, and in-transit damages.
   
   2. Third-party liability insurance: It covers the same as above.
   
   3. Personal accident cover: This protects the owner or the driver of the insured car. The protection is for accidental injuries and death. The downside is that this policy does not protect the passengers

You can enhance the comprehensive policy through add-ons. These add-ons can be obtained separately from the insurance companies. For instance, you can get add-on insurance cover on your engine damage cover.

Which plan do you really need?

This depends on several factors like your budget, driving skills, the area where you live, how far you drive, and more. There is no cookie-cutter solution. To choose the most suitable one, you’ll need to assess the insurance needs which are specific to you. To pick the ideal one, take into account:

1. The chances of accidents, car thefts and such instances where you life

2. Your confidence in your own driving skills

3. How much you use the car. If not much, then limit your insurance cover

4. Your budget- If you won’t have a lot to spare, just get a third party liability-only cover

5. Your need for add-on covers: If you really need them, get the ones necessary

Now, let us learn about how premium is decided.

How is car insurance premium decided?

The premium for your car insurance policy is determined by several types of risks.

1. Vehicle-related risks: Premium depends on the make and model of your car, its fuel type and cubic capacity, amongst others. If your car runs on diesel, be prepared to pay more premium. You also need to pay more if you have commercial vehicles and SUVs. The same holds true for older cars. 

2. Driver-owner related risks: Premium depends on the age and profession of the owner or driver.

3. Location-related risks: Premium is more if your area of operation is on highways, urban centers, areas where it is more likely to be stolen, and so on.

4. Claims history-related risks: Premiums can go up if you raise claims too many times.

How to reduce your car insurance premiums

So now you have seen that your premiums can be higher or lower depending on several factors. You may be thinking now how to reduce the amount of premium. We’ll help you out there as well. Here’s how to bring down the premium amount.

1. Retain your No Claim Bonus: You get these when you do not file for a claim for a continuous period of 2-5 years. Insurance premium companies like customers who do not file claims, and rewards them for the same. For filing no claims for 5 years, you get 50% off your premium. As you can see, the benefit is certainly attractive enough and saves you a lot of money down the line. If you have got NCB, use it to get a lower premium while getting car insurance. 

2. Choose voluntary deductibles: voluntary deductibles are amounts which you legally agree to pay while getting your car insurance claim. This is determined when signing up for the plan. Choosing higher voluntary deductibles can surely bring down the premiums, but understand that you’ll have to pay a very high value when filing for a claim.

3. Get security devices on your car: Does your car have security devices approved by the ARAI or Automotive Research Association of India? If so, you’ll get a discount on premiums as these cars are less theft-prone.

Where to get your car insurance from?

1. Directly from insurance companies online from their website.

2. From third-party financial companies on their websites.

3. Directly visit insurance companies.

4. From car dealerships which gave you the vehicle, who have tie-ups from insurance companies. You get the insurance directly from these dealerships.

It is better to buy car insurance or any kind of insurance online. That way, you can compare and contrast various products, and arrive at the insurance plant that suits you best.