Things to consider before taking car insurance in 2022

Things to consider before taking car insurance in 2022

With rising diesel and petrol prices impacting the expense of having a vehicle, it’s also worth considering strategies to reduce other related running costs. Car insurance is an excellent place to start.

All drivers are required to have insurance coverage, but many people choose an insurer after purchasing their new car and don’t review the policy terms for years, potentially wasting money.

Below are some things to consider if you are planning to buy car insurance in 2022.

  • Financial Coverage
  • The primary goal of car insurance is designed to safeguard you from monetary burdens that may occur as a result of unfortunate events. In the event of property damage or personal harm as a result of an accident, car insurance coverage provides a much-needed safety net.

    Environmental and man-made disasters such as earthquakes, hurricanes, flooding, disturbances, and thefts are all covered by a car insurance plan. Third-party car insurance and comprehensive car insurance are the two most common forms of car insurance in India.

    • Third-party insurance
    • Third-party insurance only covers the legal liability of a third party in the event of an accident. The authorities have made it mandatory for vehicle owners to obtain at minimum third party insurance.

    • Comprehensive car Insurance
    • Aside from third-party damages, comprehensive car insurance covers the owner’s vehicles. Furthermore, any accidents induced by man-made or natural factors are covered under this sort of car insurance coverage.

      Choosing this form of insurance is a matter of personal choice; nonetheless, comprehensive coverage is usually suggested because it offers protection in practically all situations.

  • Higher deductibles could help you save money on your insurance.
  • Insurance premiums are determined by the amount of money the insurance company foresees having to pay out in the event of a claim. The car insurance company will instantly realise that if you decide to pay a more significant amount of your own losses by increasing your deductibles, they will not have to reimburse as much for any claims.

    As a result, they will often offer you a reduced premium. If you want to save money by raising your deductibles, ensure you can manage to cover the deductibles if you need to file a claim.

  • Purchase the appropriate add-on covers.
  • The basic coverage includes accidental damages plus a handful of other things, such as vehicle loss or damage caused by natural disasters or man-made disasters. Policyholders must, however, always get add-on coverage like engine protection, breakdown cover, and consumable coverage, among many others.

    Purchasing such add-on coverage might raise rates by 15-20% over the original insurance, which includes both personal damage and third-party liability. Such add-ons can provide significant relief to policyholders in the event of severe loss. Engine Safeguard coverage is one of the must-have add-ons for policyholders because standard car insurance does not insure engine problems.

  • Customer service support
  • Is the insurance agency open 24 hours a day, seven days a week? Will they be the earliest to respond? Your suffering will be heightened if your vehicle breaks right into the heart of the unknown and you receive no response from your insurance provider. Nevertheless, in an extremely competitive industry, most businesses must provide service 24 hours a day, seven days a week or risk losing consumers. Check to see if the insurance company offers a toll-free number or roadside assistance that covers the whole country.

  • Take advantage of exclusive offers.
  • Drivers who are considered a lesser risk (senior, married, and have a lengthy driver safety background) or who complete a driver-training course are eligible for discounts. Anti-theft and other safety devices might also help you save money. Compare overall prices with and without these discounts to determine which option is less expensive.

    Sometimes insurance companies will usually give you a discount if you pay annually rather than quarterly or if you pay semiannually rather than monthly. However, some companies may give you a discount if you pay with a credit card, which should end up making it simpler to complete an annual payment.

    This is one of the simplest methods to save money on your insurance, hence why you must always inquire.

  • Check out the bonus for not making a claim.
  • It’s critical to investigate a business’s No Claim Bonus (NCB) policy. NCB refers to the coverage provided to the customers who do not file a claim for the full year. Amount granted as a bonus at the time of renewal of a car insurance policy, usually between five and fifteen % of the insured stated amount. NCB is sometimes carried forward as well.

  • Compare Claim Settlement Practises of Insurers
  • This is the most important aspect of a policy. Every policyholder hopes for a simple claim process. Every insurance company has its own method. As a result, it’s critical to compare the insurance companies’ claim settlement processes and documentation.

    Conclusion

    Before purchasing car insurance, you must examine a number of factors, including risk evaluation, coverage, the value of the deductibles, and the car’s current market value. There are also a few cancellation policies. Each car insurance coverage has its own set of guidelines. Please feel free to inquire about any jargon or phrases that you are unfamiliar with.

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    CA Mukesh Gupta
    CA Mukesh Gupta
    Mukesh Gupta is the founder and director of Wealthcare. He is Fellow chartered accountant, Certified Financial Planner and Certified Public Financial advisor. He is in financial services industry since 1994. He conducts free money management sessions for corporates and associations on topics related to Personal finance. His previous engagement was with Birla Sunlife group. He regularly writes on topics related to Personal finance and occasionally appear on electronic media.

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