Expert Advice On Understanding The Nuances Involved In Car Insurance Policy Purchases
A large multitude of the Indian population will agree that a car holds a unique position in the collective psyche
. It is quite unlike the sentiment that is found in most of the developed and westernized regions around the world. Out there, a car is considered as a mandatory purchase, a necessary expense and one that cannot be dispensed with. In India however, the purchase of a car reflects one of the most significant decisions in ones life. It is in-fact, perhaps the second most expensive purchase after a home and many Indians consider the car to be a prized possession, to be cherished and enjoyed for a long time.Unfortunately though, historical data revels that the same diligence has been below par in the case of motor insurance purchases. The generic Indian approach towards insurance on the whole can be described as one part indifference, two parts reluctance and a spoonful of ignorance that is bound together by the whole I dont need it attitude. This approach is showing signs of change in recent years. This development can be attributed chiefly to the slew of new product launches with increasing level of conveniences and sophistication, together with the collective efforts of the Insurance industry.
Mentioned below are a few pearls of advice that have been distilled from veteran car owners and industry experts who have become well versed with the nuances of purchasing a car insurance policy:
1.Coverage Required: It is extremely important that one must determine the extent of coverage they require. This is because three are two basic types of policies viz. comprehensive policies and third party policies. The former offers the maximum protection, including damage caused during self-use. Third party policies on-the-other hand offer limited protection and can only be used in cases of damage to a secondary vehicle (s) and property. There is a significant difference in the premiums payable for both the category of policies.
Pro-Tip: Given the increasingly expensive repairs of modern-day cars, comprehensive insurance policies are advisable
2.The Insured Declared Value (IDV): This is the amount that forms the base for all premium calculations. Many people tend to keep this amount artificially low in conjunction with their broker to reduce their premium outgo. However, in the unfortunate case where a claim has to be filed, this can prove to be disastrous due to lack of adequate coverage.
Pro-Tip: Each car insurance company tends to have a distinct set of parameters that are used to arrive at the IDV and thus, the IDV for the same car can vary from insurer to insurer
3.Shopping Around: Each insurance company tends to offer certain benefits and conveniences as part of their customer attraction and retention strategies. These could range from spot discounts, to complimentary add-ons and loyalty benefits. It is therefore advisable to reaching out to multiple insurers, including the one with whom there is an existing contract in place. This is to get the best deal possible, not just in terms of lower premium but in terms of maximizing the safety net and benefits.
Pro-Tip: Now-a-days, insurers have started to offer their best deals to online purchases, so it makes better sense to log onto their portal and get the most coverage possible
At the end of the day, owners have to realize that motor insurance is not just a diktat mandated by the central government. It is in reality, an important safety measure that makes its presence felt in a life-and-death situation.
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