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How to choose the best insurance policy for a new vehicle?

Buying her first car was an age-long dream of Trisha. As soon as she had enough savings after getting her first job, she went on to buy herself her favorite hatchback. However, selecting an insurance policy for her new car was as perplexing as it could be. In this article, we’ll discuss how you can select the best insurance policy for a new vehicle.

Motor Insurance is mandatory by Indian law for all motor buyers in the country. It gives protection against any unexpected accident or damage to the vehicle. There are a lot of websites that provide the best new motor policy and allow comparing multiple policies and help in choosing the best one.

 It is desirable to settle with the insurance company that is offering the best new vehicle policy deal. Hence, a comprehensive car insurance plan is the most suggested option. It protects vehicles from third-party liabilities as well as own damage.

But, with the various options available in the market, selecting the best new motor policy plan is a difficult task. Many companies have different plans with different features on offer. While choosing the right motor insurance policy it is important to check through several parameters that suit customer needs.

Let us now take a look at the steps to choose the best insurance policy for a new vehicle. This will help our readers like Trisha get the best insurance for their new vehicle.

Steps for Choosing the Best Car Insurance Policy

Mentioned below are the following points that help you choose the right car insurance plan that suits your needs.

  • Compare car insurance online

There are many tools available online in the market that allow you to compare different new motor insurance plans. You can also consider factors such as premiums charged, coverage of the policy, exclusions, features, benefits of the plan, and more. It helps you know the different plans in detail, and allows you to choose the best one that fulfills your requirements.

  • Insurer’s customer service

When buying a new vehicle insurance policy, the most important factor to take into consideration is the customer service of the insurer. See this checklist when analyzing the insurers –

  • Number of years for service provided by the insurer
  • Online and offline customer reviews
  • Customer service team functionality
  • Availability of car insurance online 
  • Claim settlement stats of the insurer
  • Add-on coverage

You get to choose additional policies to enhance the coverage of your existing comprehensive new motor insurance plan. The most common car insurance add-ons to look for are zero depreciation cover, return to invoice cover, roadside assistance cover, engine protection cover, no claim bonus protection cover, etc.

  • Cost-effectiveness of the policy

At a low premium cost, third-party car insurance plans are available, the policy provides limited coverage. Hence, it is desirable to choose comprehensive car insurance. At a nominal cost, many insurers offer comprehensive car insurance. You have an option with add-on covers to extend the coverage at a reasonable amount.

  • Premium to benefit ratio

The premium to benefit ratio is nothing but a relative view of features and premiums. In other words, if without paying any extra premium you get an additional benefit, you should consider taking it. For instance, at no extra premium cost, some insurers provide free roadside assistance worth INR 500.

You need to take into looking the following things –

  • When buying a new vehicle policy, get clarity on the coverage needed and assess your insurance needs.
  • At neutral financial websites choose to compare new motor plans 
  • It is offered by a trustworthy insurer with a good claim settlement ratio and chooses the best new vehicle policy that fulfills your needs 
  • Before expiry renew your car insurance plan and pay the premiums on time.

Factors Affecting Car Insurance Policy Premium

Here are several factors that affect the car insurance policy –

  1. Risk related to the vehicle: The cubic capacity and fuel type of the vehicle are a few parameters which include the make and model of the car that determine the car insurance premiums. Moreover, for commercial purposes cars that are used have higher premiums as insurers usually, with which these vehicles get a more significant number of claims. Also, diesel cars have a 10-15% higher premium rate as compared to petrol-based cars.
  1. Risk related to your area of residency: The premiums charged will be high If you live in an accident-prone area. Also, those living in metropolitan cities have higher premiums to pay compared to those living on the outskirts.  
  1. Risk related to your driving skills: Your driving skills play an important role in deciding the car insurance premiums too. Your insurer will consider you as a high-risk applicant and charge higher premiums if you have a record of driving recklessly.

Key Areas Where You May Go Wrong When Choosing a New Vehicle Insurance Plan

a)  Value of the car

People often reduce the IDV or ‘insured declared value of the car to buy a policy with a lower premium payout. But the car will be treated as a total write-off in case of an accident. The benefit for the cost is not adequate to avoid such practices. Always choose that policy that offers you the maximum IDV on your vehicle, even if it has a higher premium.

b)  Lapse of Policy

Your insurance provider may give a grace period of usually a week in case of policy lapse. Within this period, you need to renew the policy to retain the earned benefits. You will also fail to lose benefits like lower premiums or discounts for vehicle insurance.

Conclusion

It is very difficult to find the best car insurance online policy in India for your car. You need to know all parameters to arrive at the right car insurance plan online.

You need to go carefully with the policy features and benefits, the number of network garages offered by your insurer, add-on covers, and the claim settlement ratio of the insurer. Moreover, follow the above-mentioned tips to choose the best insurance policy for a new vehicle.

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