Want to Buy Car Insurance? Here is How to Select the Best Car Insurance Company in India

Most of us love to go on long drives with our friends and family. Road trips have become the new additions to our bucket list. Road trips are fun when you have a well-maintained car. Road trips mean driving continuously for long hours. In order to ensure a fun trip, you ought to have an active vehicle insurance plan. It offers the much-needed financial coverage in case of any road accident.

Read more

In this fast-paced world, it is imperative to be ready to tackle the problems that come your way. But, it is not possible to handle everything alone in times of need. A car insurance policy is a must to safeguard your car from any unforeseen damages. Many feel that vehicle insurance is an unnecessary burden but this is so not true. Buying vehicle insurance may cost you more, but it will definitely free you from the huge costs that might have to be borne in times of accidents or other casualties.

What is Car Insurance?

Car insurance is a type of insurance policy that provides financial protection to the policyholder, in case of accidents and damages caused to the car. It reimburses the incurred expenses during accidents, thefts, etc.

To buy car insurance, the policyholder has to pay a fixed amount (premium) to the insurance company on a yearly or semi-yearly basis, as per insurance policy’s terms and conditions.

How to Buy Car Insurance in India?

Buying a car insurance policy in India is a simple process.  In the age of technology, many renowned insurance companies offer this facility offline as well as online through their official websites. The biggest benefit of buying a car insurance policy online is reduced premiums. Thanks to the elimination of insurance agents, insurers offer car insurance plans at a lower premium.

The car insurance premium is computed by the insurance company by keeping in mind a number of factors. These include the type of car, the age of the car, age the car owner, driving skills of the owner, number of years for which the policy is required,  Insured Declared Value of the car and so on. The insured has to pay the premium to the insurer on pre-decided intervals in order to avail continuous coverage benefits.

In India, buying vehicle insurance is not an option, but a compulsion. The Motor Vehicles Act, 1988 makes it mandatory for all vehicles that run in public places, to have car insurance policy. While the car insurance policy in India must cover ‘third-party liability’, opting for a comprehensive cover is a matter of choice. If you have a car insurance policy, then the insurance company will take care of such incurred expenses on your behalf in case of an accident.

In India, there are two types of vehicle insurance available i.e. third party car insurance and the comprehensive car insurance. A third party insurance cover essentially benefits the policyholder in case of damages/ injuries caused to a third party property/person. But, under this policy, the damages caused to the policyholder ’s car are not covered by the insurance company.

A third-party Insurance Cover doesn’t offer comprehensive coverage.  If you do not want to bear the huge repair bills due to accidents, then it is advisable that you may buy a comprehensive car insurance cover.  It provides an all-around insurance coverage against damages, accidents, natural calamities, and thefts.

Additionally, you will also get a third-party insurance cover as per mandatory provisions.  Though a comprehensive cover may cost you higher than a basic third-party liability cover, it offers more benefits that fulfill your insurance needs.

Factors to Consider Before Buying Car Insurance in India

With the wide number of insurance companies offering car insurance in India, choosing the right car insurance policy can become a daunting task. The best vehicle insurance is one that suits all your requirements and is also is light on your pocket. Each penny you spend must be worthwhile and must reward you when the need arises.

 Before you finalize which car insurance policy you want to buy and from which provider, you should do your homework well. It requires proper research and so that one gets the best of all. 

Selecting the best car insurance is in India is no rocket science.  Below is a guide that will help you make a wise choice.

1. Comparison is the key:

The insurance market is flooded with various options. Every option comes with different features. It gets difficult to figure out the best plan. That’s why you must compare various plans online.

All you have to do is analyses your insurance expectations and compare various policies online.

Make a list of features that you need, and compare various vehicle insurance policies on the basis of premium, inclusions, and exclusions etc. 

Today, there is no need to contact an insurance agent to help you find the best car insurance policy. With the advent of technology, you can now compare, renew and even buy a car insurance policy online. You have the freedom to compare and review car insurance policies offered by different companies. Various web aggregators offer comparison tools that you can use to compare various plans online. It helps you calculate premiums, understand the additional covers offered and get best quotes according to your requirements.  Also, an added advantage of using the online system is that you can read reviews by other buyers. This assists you to identify the car insurance policy that provides maximum benefits and is value for your hard-earned money.

However, if you still believe in taking the traditional road of personally meeting the insurance agent and understanding provisions, you can do so. 

2. Consider Add-on:

When you are buying car insurance, it is suggested that you not only consider the features the main insurance policy offers but also check out the additional riders known as add-ons. Carefully understand all the add-on riders offered under the specific vehicle insurance plan. This will help you to choose the features that are not included in the basic policy. As per your insurance expectations, you can enhance your basic insurance

 There are a wide number of add-ons provided by different insurance companies. These include engine cover, third-party liability cover, roadside assistance cover, Zero Depreciation cover, personal accident cover and so on. 

Remember, each insurance company offers different additional covers at different premium rates.  When you avail add-on riders, you will have to shell out extra from your own pocket, but this will only provide extra and more beneficial coverage.

3. Understand the Insurance Company:

As mentioned before, when you step into the world of insurance, you will find plenty of insurance providers. Though having choices is good, sometimes they can just add on to the confusion.

Insurance is an agreement based on trust. Many insurance companies offer plans with premiums at par with the competitors. But as a smart insurance buyer, it is recommended to thoroughly understand and know about the insurance company. Some factors like CSR (Claim Settlement Ratio), the time taken to process claims and testimonials from customers, can help you to know the financial health of the insurance company. Know the past, present and even the future plans of the company, to avoid any unnecessary problems in coming years.

Additionally, it is also recommended that you read the company policies carefully before you seal the deal.

4. Customer Service:

Imagine if you are in dire need of assistance and while you try to connect to your insurance company for help, you fail to reach them. In that case, what’s the point of having insurance coverage in the first place when you can’t avail the insurance benefits?

The major objective of buying an insurance plan is that you would get help when you need it the most.  It is imperative that you consider the customer service support offered by the insurance company you wish to buy car insurance from.  Analyze the credibility of the insurance company in terms of the years of the company has sustained successfully, customer reviews, reputation in the market, availability of online services, customer service team etc. 

It is advised that you choose a company that provides 24-hour service with an online grievance facility. Additionally, it must that your shortlisted insurer has a toll-free number that operates well.

5. Claim Settlement Ration (CSR):

There is a misconception that insurance claims are rarely settled by the insurance companies.

This isn’t true because insurance companies exist to provide insurance benefits. On the basis of terms and conditions, they settle/deny the filed claims. However, it is advisable to read the claim settlement process for the opted insurance plan.  Take into account the insurance company's past records of claim settlements. This will help you get a clear picture of the insurance company and you will be able to make an informed decision.

 In simple terms, Claim Settlement Ratio implies the number of claims settled by the insurance company. If the CSR of the insurance company is good, then only decide to take the process further.  If it is poor, don’t fall prey to the company. A good CSR reflects the reputation of the company in the market. The Claim Settlement Ratio of all the insurance companies is available on the official website of IRDA of India.

6. No Claim Bonus:

Most of the insurance buyers forget to take this particular factor into consideration at the time of buying vehicle insurance. When a policyholder doesn’t file any claim in the policy year, the insurance provider rewards him/her in the form of ‘No Claim Bonus’ upon the time of renewal. It means the policyholder will get some extra benefits in terms of premium discounts. If you are a good and responsible driver, who has not filed for any claim from the insurance company, you will get No Claim Bonus.

Also, if your insurance policy term gets over with a particular company and you are planning a switch, you can ask your insurance company to provide a No Claim Bonus Certificate to help you avail the NCB with the other insurance company.

In a Nutshell

These are some of the factors that will help you make an informed decision when buying car insurance in India. All in all, vehicle insurance should not be considered as a burden, but a basic necessity. Many insurance buyers consider the premiums while buying a car insurance policy, but it makes more sense to consider all the factors that may have a significant effect in future.