Car insurance is a must-have for every car owner, as it not only protects their vehicle but also provides financial security in case of an accident. With so many insurance providers and policies available in the market, choosing the right one can be overwhelming. To help you navigate through the process, we have created the ultimate checklist for choosing the right car insurance policy. Here’s what you need to know.
When it comes to car insurance, there are primarily two types of policies available – comprehensive and third-party. Third-party car insurance is the minimum coverage required by law in India, while comprehensive policies provide additional coverage. Let’s look at both policies in detail.
Third-Party Car Insurance
Third-party car insurance is the most basic form of insurance coverage, and it only covers damages caused to third parties in case of an accident. This means that if you are involved in an accident and cause damage to another person’s car or property, your insurance policy will cover the cost of repairs, legal fees, and medical expenses of the third-party.
However, third-party car insurance does not cover any damage caused to your own vehicle. If you are in an accident that is your fault, you will have to pay for the repairs yourself. This is why third-party car insurance is not recommended for those who own expensive cars, as the cost of repairs could be substantial.
Comprehensive Car Insurance
Comprehensive car insurance provides wider coverage than third-party car insurance. In addition to covering damages caused to third parties, it also covers damages caused to your own vehicle. This means that if you are in an accident that is your fault, your insurance policy will cover the cost of repairs to your car.
Comprehensive car insurance also provides coverage for theft, fire, and natural disasters such as floods and earthquakes. It also includes personal accident coverage for the driver and passengers in case of an accident. While comprehensive car insurance is more expensive than third-party car insurance, it provides more comprehensive coverage and financial security.
Standalone Own Damage Car Insurance
In case you already have third-party car insurance, you can opt for a standalone own damage car insurance coverage. It basically offers all the coverage options of a comprehensive insurance without the third-party liabilities.
Factors to Consider When Choosing Car Insurance
Now that you know the two types of car insurance policies available, it’s time to choose the right one for your needs. Here are the factors you need to consider when choosing car insurance:
1. Coverage and Deductibles
The first thing you need to consider when choosing car insurance is the coverage and deductibles. While comprehensive car insurance provides wider coverage, it also comes with higher deductibles. This means that you will have to pay a higher amount out of your own pocket before your insurance policy kicks in.
On the other hand, third-party car insurance has lower deductibles but limited coverage. When choosing car insurance, consider the risks involved and choose a policy that provides adequate coverage and deductibles that you can afford.
2. Premiums
The next factor to consider when choosing car insurance is the premiums. Premiums are the amount you pay for your insurance policy, and they can vary depending on several factors such as the make and model of your car, your age, and driving history.
When choosing car insurance, compare premiums from different insurance providers and choose a policy that provides the best value for money.
3. Add-ons
Most insurance providers offer add-ons or riders that provide additional coverage for specific risks such as engine protection, zero depreciation, and roadside assistance. When choosing car insurance, consider the add-ons offered and choose the ones that provide additional coverage for the risks you are most likely to face.
4. Customer Service and Claim Settlement Ratio
When choosing car insurance, consider the customer service and claim settlement ratio of the insurance provider. A good insurance provider should have a high claim settlement ratio and prompt customer service.
You can check the claim settlement ratio of an insurance provider online or by speaking to their customer service team. Choose an insurance provider that has a high claim settlement ratio and prompt customer service.
5. Exclusions
Most insurance policies have exclusions, which are specific risks or situations that are not covered by the policy. When choosing car insurance, consider the exclusions and make sure that the policy provides coverage for the risks you are most likely to face.
Choosing the right car insurance policy is essential for every car owner. It not only provides financial security in case of an accident but also protects your vehicle from damages and theft. When choosing car insurance, consider the coverage and deductibles, premiums, add-ons, customer service and claim settlement ratio, and exclusions. By following this checklist, you can choose the right car insurance policy that provides adequate coverage and financial security.