If you have a vehicle you must have insurance. Insurance for cars comes in two flavors. One is third party liability insurance that is mandatory under law. The second is optional comprehensive car insurance cover. It is advisable in your interest to have comprehensive and third party liability cover. There are over a dozen companies offering car insurance plans and not all are the same so one must proceed with care when you think of buying car insurance.
Third Party Insurance
The rates are more or less fixed for premiums for third party insurance. IRDAI fixes the rates and the rates change every year. If you want to save on costs then you have to look for an insurance company that offers two or three year insurance cover. If you buy third party cover for 2 or 3 years with one time premium payment then you protect yourself against rate increases that always happen each year. Do not go for the first insurance company you come across. Check online and find out which insurance company has a better claim settlement ratio before buying car insurance.
Comprehensive car insurance is necessary. Third party insurance only keeps you protected against third party claims if you are involved in an accident. It does not take care of damages to your car or injuries you may sustain. This is why, though comprehensive car insurance is optional, you should get it. It will protect you in case you sustain injuries or if your car gets damaged. If your car is lost or stolen, then you get reimbursement as per the IDV comprehensive car insurance policy, to compensate to a major extent towards the cost of a new car. Over a dozen companies offer comprehensive car insurance and some claim to offer the cheapest cover. However, it may not be the best. The problem with insurance is that there are always exclusions. Therefore, one must be thorough before one decides on a particular insurance company. This is how to go about getting affordable insurance for cars.
You can visit each insurance company website and check the rates, the inclusions and the exclusions. This is a time consuming matter. You can go through an insurance aggregator website where you enter a few details and you get a list of offers of different companies. You can then fine tune your selection and check the insurance company’s inclusions and exclusions as well as services.
Cheap is not the Best
Some companies may apparently offer lower premiums, but for plans like these, the coverage may also be less exhaustive. They may not offer roadside assistance or may not have arrangements with garages for cashless repairs or provision to supply alternate car if your vehicle breaks down or even offer towing assistance. The list of exclusions may be long and what you are left with is practically of little use. Furthermore, such insurance companies may have a poor record of settling claims
Go Online, not through Agents
One way to save on the premium and get affordable car insurance is to purchase car insurance online. If you go through an agent you have to pay the agent’s commission.
Insurance Premium Varies as per the Size of the Car
Smaller and affordably priced cars with smaller engine capacity carry lower rates of premium. Buy a small family car and you pay less for the initial premium on new cars, which is charged based on the invoice value of the car. The same goes for the relatively bigger cars where the insurance premium is comparatively higher.
Premiums are lower in Smaller Cities
If you live in a metro city, then you will pay a higher amount of premium for insurance. In comparison, if you happen to reside in a Tier-II city, the car insurance premium will be much more affordable.
Some insurance companies will offer the option to go in for voluntary deductibles which means you insure the car for less than its value and pay a correspondingly lower premium but with a higher risk. If you are involved in an accident then you bear higher cost of repairs. If you drive safe and live in an area where accidents are not common, you can opt for this method and get affordable car cover.
Car comprehensive insurance comes with a lot of exclusions that exclude plastics, rubber, electrical, accessories and even engine. In order to get these covered by insurance you have to choose add-ons that will increase premium amount. That said, never undermine and exclude the importance of add-on covers in terms of the coverage they provide, just for the sake of lowering your premium.
Another way to pay less premium amount for car insurance is to buy a used car in good condition. Insurance is considered on the depreciated value and street value of the particular model and by opting for a second hand or used car at a lower price you also pay a lower premium and save on insurance costs.
Consider value of services that insurance companies offer such as roadside assistance, towing, cashless repair, fast claims processing, alternate vehicle provision are a few factors that should also be factored in.
If you already have insurance and have not filed a claim in the preceding year, you get a no claim bonus (NCB), regardless of whether you continue with the same company or switch to another insurer for the next year which has the provision for NCB transfer.
In these days of high traffic, irresponsible driving and high cost of repairs as well as medical treatments, it is in your interest to keep yourself fully covered. Get the most affordable insurance by keeping the foregoing in mind and doing a bit of smart shopping around.