If you’re new to the world of car insurance, it could appear complicated and confusing. Learn the basic concepts of this field. Through this post, we will provide a clearer understanding on some basic details that will allow you to learn about car insurance and ultimately purchase the best insurance policy for your vehicle.
Select a policy which meets your requirements
Be aware the two kinds of car insurance policies : Comprehensive insurance for third-party cars and Comprehensive policy. The first is required under Indian legislation, however, greater benefits and coverages are provided by the second. If you are looking to obtain the minimum amount of coverage i.e. only against third-party liability, go with third-party car insurance. However, If you’re looking to safeguard your vehicle also, opt for the Comprehensive policy.
Create the IDV in the correct way
IDV is a term used in relation to car insurance . It is a jargon that is often used when you purchase the insurance policy. IDV is an acronym for IDV which stands for Insured Declared Valuation. It’s the approximate value of your vehicle’s market value. Be aware the fact that IDV doesn’t represent the sale value for the car, it’s more of an indicator of the value at present. Be aware that you don’t have to create an IDV when you purchase third-party insurance for your car. You are only able to select an IDV range when you purchase an insurance policy that is Comprehensive.
If your car is stolen or is involved in an accident that is major and has been damaged to the point of repair, the vehicle will be classified as a total loss. This is the point where IDV comes into the picture. The insurer (i.e. ACKO) can then pay you with the approximate IDV amount that you chosen when you purchased the policy. Therefore, it is crucial to choose the correct IDV. A higher value will raise the car insurance cost, but setting a lower value can reduce the amount claimed.
Higher deductibles could reduce the cost of insurance, but it also decreases the amount of claim
A deductible is a sum that the policyholder has to pay when they settlement of the claim. It is a tiny amount that is paid in part of the policyholder’s share. The way to think of it is, you can find two types of deductibles that are included in automobile insurance: mandatory and voluntary. You can select the amount you want to pay upon making a filing a claim for the voluntary deductible. Most people believe that the deductible higher is advantageous for drivers who are safe. However, setting the higher deductible could result in a lesser claim. Therefore, be cautious when making a decision to set a voluntary deductible.
The only useful add-ons must be purchased
If you’ve chosen an Comprehensive automobile insurance policy, you’ll have the option to select additional protections i.e. add-ons. If you’ve just bought a new vehicle, you can choose from a variety of add-ons, such as, zero depreciation add-on, Return to Invoice Cover, Roadside Assistance Cover, Engine Protection Add-On, No Claim Bonus (NCB) Cover, etc. Each add-on must be purchased separately. This will add to the cost of your insurance policy. It is important to pick the add-ons that meet your needs. For instance, If you believe there is a lower chance of bringing claims, you can choose to skip NCB Cover.
The timely renewal renewals will keep you on your NCB
It’s not just necessary to purchase an insurance plan, but it is also essential to keep it running throughout the day. Most of the time, an insurance policy for cars lasts for one year, longer-term insurance policies are also offered. You must renewal your auto insurance on time, or else the policy will expire. The policy that is expired is useless and does not offer any financial protection to you or the third person. Additionally, you could lose the accumulation of NCB i.e. The No Claim Bonus if you fail to renew your insurance policy in the required time. NCB is a rebate you get on your car insurance rates in the event that you don’t make any claim. As this discount is up to 50 percent for five consecutive claims-free years, it is essential to renew your policy on time to keep the benefit. In the event that you fail to renew within 90 days from the date of expiry period of your policy, could result in being denied this benefit, as well as an increase in the premium during renewal time
These are a few fundamentals that can assist you in understanding the idea of insurance for cars. Make sure you study the conditions and terms, exceptions, along with the fine print that is included in the policy document.
Last Updated : March 14, 2022 by Editorial TeamPublished : March 14, 2022