Buying car insurance can be as tricky as buying a car itself. With a clutter of car insurance companies out there and all the various policy details in fine print, getting it wrong is always a possibility.
What do you need to keep in mind while shopping for a car insurance cover? What are the wrong ways to buy car insurance? How can you avoid those pitfalls?
Let’s take a closer look at critical points that can make a difference here.
Not Comparing Quotes
To begin with, not researching enough and just settling on the first policy provider is a basic mistake people make. Existing policy holders are more prone to this as they prefer to continue with their present arrangement rather than taking pains to look around.
Today there are multiple options for car insurance comparison where comparisons can be made across insurance companies and policies. Similarly, just sending in an enquiry can fetch you many options at one go and take the best pick at the most competitive rate.
Not Reading the Fine Print
This again can be a cumbersome thing to do and is often neglected. If the terms and conditions are lengthy and difficult to understand, check with the insurance advisor. Get all points clarified before taking a decision. Often, there can be a rider in the T&C; that reduces the lure of a sales pitch made in the brochure.
Not Valuing the Vehicle Correctly
Often, incorrect valuation of a vehicle is a mistake that can cause problems later on. The IDV or the Insured’s Declared Value is calculated based on the model, the year of manufacture and the condition of the vehicle. Over valuation can lead to a higher premium while valuing it less can reduce the claim in the event of a mishap. Getting the vehicle correctly assessed and valued is a significant step in the process.
Not Declaring No Claim Bonus
You have had a problem-free year and did not require a claim. Congratulations! You need to be rewarded! From the second year and beyond, you are entitled to a ‘no claim bonus’. This can translate to a discount from 20% to 50% of the premium amount. Not declaring this can deprive you of this advantage.
The Question of Voluntary Deductibles
Going in for a voluntary deductible (your part of the final claim amount) can reduce the premium amount per year. But, should there be an actual need to file a claim, it would mean a higher payout at that time. Any decision on this should be well thought out and not taken in a hurry.
Not Looking for Freebies and Add On Covers
It is a competitive industry and a buyer’s market today. Most insurance companies give freebies and add-on covers that can be found if researched. Even if not a direct reduction on the final premium, such offers can indirectly provide more value to your policy.
Of course, do check if any of those are chargeable. If they are, evaluate whether it is a service you actually need. Else, opt out of that and get the premium reworked.
Not Renewing in the Name of the Latest Owner
Another goof-up that often happens is delay or negligence in the timely transfer of ownership of a vehicle after a sale. At the time of renewal of the policy, this can lead to the policy papers also getting issued in the name of the previous owner.
Not Checking Insurance Company's Credentials Enough
Finally, choose your insurance company based on its reputation and credentials as much as any of the above points. Track record on factors such as customer service and support, claim settlement ratio and the network garages are essential.
Purchasing car insurance is equal to buying total peace of mind. Taking your gleaming new car in today’s chaotic traffic conditions can be quite unnerving. You can play safe by keeping the above tips in mind before choosing your car insurance.