Are You a First-Time Car Insurance Buyer? If Yes, Use This Quick Guide


If you’re purchasing car insurance for the first time, you may want to be aware of certain factors that can help you buy the right plan with confidence. We got you covered through the guidelines mentioned in the post.

Many people today purchase their desired car after proper research. But a car buyer may buy vehicle insurance available at the car dealer without doing adequate research. However, it’s crucial to have appropriate awareness before purchasing four-wheeler insurance, especially when you’re a first-time car insurance buyer.

Types of Car Insurance

In India, a car insurance policy can be of two types-

Third-party Insurance

Third-party insurance is a statutory requirement in India as per the Indian Motor Vehicles Act 1988. However, it only covers the damages or loss of life caused to a third party involved in an accident with the insured vehicle.

Comprehensive Car Insurance

Comprehensive four-wheeler insurance covers damages to the third party and the insured vehicle. Therefore, it can provide more wholesome insurance coverage, especially if your car is new.

Things to Remember While Purchasing Comprehensive Car Insurance

Set Sufficient IDV Amount

Insured declared value or IDV is the maximum amount you can get from your car insurance provider in the case of any claim settlement toward total loss or damage of the car. The insurance firm determines the IDV of a vehicle after accounting for depreciation and other factors as per the IRDAI rules.

Lowering the IDV can reduce your insurance premium. However, you may get less insurance claim amount in the case of any damage to your car. Therefore, set your IDV amount appropriately to minimise your losses during a potential claim settlement.

Choose Deductibles Wisely

A deductible is an amount a policyholder must pay in an insurance claim before the insurance firm pays the rest of the insurance amount as per the policy terms and conditions. For example, consider that you raise a claim of ₹20,000 where the deductible is ₹2,000. If your claim is sanctioned fully, then you’ll only get ₹18,000 as the claim amount (20,000-2,000).

A standard deductible amount is compulsory for a comprehensive car insurance policy. Additionally, you can opt for voluntary deductibles to increase your total deductibles, which can lower your car insurance premium. On the other hand, increasing your deductibles can lead to paying more money out of your pocket in the event of filing an insurance claim.

Thus, weigh the pros and cons carefully before deciding on the deductibles.

Include Useful Add-Ons

A comprehensive car insurance policy offers various optional covers known as add-ons at an extra price over the base premium. Including these add-ons can increase your vehicle insurance premium. However, many of these add-ons can help you a lot in a crisis situation. For example, you can consider including the following useful add-ons to increase the scope of your car insurance coverage.

  • Zero depreciation cover
  • Engine cover
  • Roadside assistance

Consider the insurance provider’s reputation as well before finalising the preferred plan. Moreover, consider purchasing car insurance online to save time. Once you select a suitable car insurance policy, it is time to buy one and hit the roads in your brand-new car.

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