Steps Before Buying Your First Car Insurance

Most people tend to get car insurance after buying the car. That may sound like a normal thing to do, but that is actually wrong. It is a big mistake which one makes without knowing! It can cost more money than they can account for. The best thing to do is to search for car insurance once you have a good idea of the type of car you will buy. Don’t get car insurance for a normal vehicle and later end up buying a sports car!

According to the Motor Vehicles Act 1988, it is mandatory for all car owners to have motor insurance. Buying a car? Make sure you have money to get the car insurance. Here are some important tips to aid you in getting the most suitable car insurance cover.

 

Types of car insurance covers

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 2 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.

Know your insurance needs

Several factors dictate how much car insurance you need. This includes the amount owed to the vehicle’s financer, the value of your asset, the number of dependents in your life, and the money you can afford when dealing during an accident.

All car owners should have an auto insurance policy with third-party liability insurance cover. If you have financed the car, or if you can’t replace the car easily, think about getting comprehensive car insurance. Think about getting appropriate add-on coverage, as well as your budget.

Comparison shop

Whether you are shopping for one type of car insurance or another, it is important to compare plans online. There are several financial websites from where you can get this information for free!

Once you get the car insurance’s estimated cost, you can compare it with the coverage offered, and finally decide on the best option. One important thing to find out is the reputation of the insurer.

Understand the policy’s coverage

Documents of an insurance policy are filled with many legal jargons, many of which you may be unfamiliar with. This is why you should carefully read all such documents and get all your questions answered at the onset by agents of the insurance company. Understand especially the conditions on the financial instrument.

Look out for bundling discounts

Have you purchased other forms of insurance from the same company? Things like home and health insurance? If so, there is a high chance you can get loyalty discounts for your car insurance if the insurer is the same.

Regularly assess your insurance requirements

Your insurance needs may vary as you progress through life. Thus, you should evaluate your needs regularly and update your insurance coverage. This is not just for car insurance, but for all insurance products too. To get the best possible insurance cover, it is essential to review your needs for insurance regularly.

Never let your insurance go on a lapse

You can’t legally drive without an insurance policy. Thus, if you have a car you should not let there be a lapse in the car insurance coverage. There are insurers who refuse you insure vehicles after a break in the insurance. Always renew your policy on time.

There are several factors which affect your car insurance rates. These factors are your age and gender, the area of registration of your car, your marital position, the purpose of your vehicle, and its make and model. This means the cost of your car’s insurance policy may not be the same as your neighbors. Remember this when getting car insurance.