Buying your first vehicle, whether it is a four wheeler or a two wheeler is an unmatched and exhilarating experience. Right from choosing which brand and model to buy, to picking the color is exciting especially when it is done the first time. However amidst all this excitement it is important to remember that buying insurance for your vehicle is mandatory. Apart from being a legal necessity it can offer you much needed financial assistance in case your vehicle meets with an accident of any sort.
Tips for first time insurance buyers:
Buying insurance for your vehicles requires careful consideration; here we look at various aspects that must be factored in when buying insurance for the first time.
1. Types of Insurance Policies Available
Before buying a policy it is important to understand the types of policies available. There are two categories of policies available. The two types available are third party car insurance which covers third party liabilities and the other one is the comprehensive car insurance policy which provides cover for basic third party liability and for own damage as well. The vehicle owner or the policy buyer is known as the first party, the insurance company who is providing insurance is known as the second party and the person who is affected in case of an accident becomes the third party. The policy buyer should be aware of the salient features of the third party cover available in the policy and also other details related to it. Any damages that occur to the insured vehicle or vehicle owner are known as own damages.
2. Research well the options available in the market
Needless to say there are numerous companies that offer auto insurance policies; such a vast choice could make the process of picking the right policy a little confusing. Compare the available options on the basis of the amount of premium, coverage offered, if any additional benefits are available and so on.
3. Know the company well
These days with so much information available online it is not difficult to research about the company from where you intend to buy your policy. Three aspects can help you in choosing the right company, they are the claim settlement ratio, claim repudiation ratio and the claims pending ratio. This data lets you understand how efficient the company is in handling claims and how customer friendly is their process.
4. Understand the product you are buying
It is important to understand the product that you are buying. An insurance policy may have a lot of technical terms and details; make sure you understand the relevant aspects well. Find out about who is covered, what is the extent of coverage, what are the exclusions and inclusions, when will the cover begin and end and of course the most important aspect how to file a claim. You should check these details with the insurance agent or company representative before making a decision and should also seek their advice and opinion.
5. Find out about No Claim Bonus
If there is no claim raised by the owner or a third party in an active policy year then the insured is entitled for discounted premium in the following year. The bonus is about 5% to 10 % of the IDV (the current market value of car is the Insured Declared Value, IDV and it includes depreciation). Also, it is possible to get this bonus transferred if you have sold an old car and bought a new one. Check if your insurer offers this transfer.
6. Pick the Right Add-ons: Various add-ons are available with the insurance policies. It is very important to choose the right add-ons with your policy. Some beneficial add-ons are roadside assistance (facilities like towing, minor repairs, fuel etc on road), zero depreciation (depreciation is not considered at the time of settlement), engine protection (cost of repairing or replacing the engine is covered), consumable cover and loss of personal belongings
(loss of an expensive item like laptop etc is covered).
It is of utmost importance that all drivers follow the basic safety guidelines especially so for first time drivers. The same applies to buying the right cover, be careful and choose well.
