Finance

Car Insurance – Things You Should Understand Before Buying One

If you have decided to buy a car insurance policy, it is crucial to understand things involved in the insurance policy process. And it has been observed that people interested in buying a car research a lot and invest in the things associated with the policy. There are different types of policies that must be understood – depending on the use of a car, you can choose private or commercial insurance policy.

There are two most common types of insurance policies that can be bought:

1.            Comprehensive car insurance:

This policy is an all-inclusive policy. This policy of motor insurance provides complete cover in case of damage, loss, or an accident. This will not only cover your damage but also cover third party damage or loss. And as third-party insurance is mandatory, you should choose a cover that can secure your car completely against loss, damage, or an accident.

2.            Liability of third-party car insurance:

Although this is the most basic insurance coverage for a car, it is mandatory for every car on the road. This insurance only covers the damage or loss in case of an accident. But it will not cover any damage or loss to your vehicle; it only covers the loss and damage incurred to the third party.

Apart from its types, many more things should be kept in mind while you are choosing a motor insurance policy.

Policy terms:

Without any doubt, inclusions involve what the policy covers, but on the other hand, exclusives entail what a policy does not cover. The most common mistake insurance buyers make is that they read about the benefits and perks of an insurance policy but never pay attention to the conditions that the policy does not cover. Therefore, it is necessary for you to understand both exclusions and inclusions of a policy in order to make an informed decision.

Car insurance riders:

When you buy a comprehensive insurance policy, you will want to extend its policy cover with riders. Riders are somehow add-on covers that can easily be added to the existing policy by paying an extra premium. Therefore, it is advisable to check with your insurance providers about riders’ insurance, such as personal accident cover, NCB protection, on-road assistance, etc.

Insured declared value:

The premium insurance policies are normally calculated based on different factors such as car model, IDV, etc. Thus, you need to understand the IDV. IDV is basically the maximum amount you can claim on insurance, especially in the case of complete loss or theft.

This amount will decrease with the increase of car age. This will let you know that a brand new car will have a higher IDV than the same model which has been used for one year.

Personal accident cover:

You are most likely exposed to the threats and risks of accidents and life-threatening injuries when you are on the road. So by keeping these things in mind, it would be great to consider a personal accident cover. This policy is also considered an add-on cover. Therefore, this cover will also be acquired by paying an extra premium.

No claim bonus or NCB:

It is basically an added bonus that is provided to you when you do not claim the whole year. So if you do not make any claim the entire year and there comes the time of policy renewal, NCB should be calculated accurately. You can collect NCB to the maximum of 50%.

Claim procedure:

The best feature or aspect of a motor insurance policy is that it offers you the easiness and efficiency of its claim procedure. So when you buy this policy, you should ask your insurer about this procedure. Plus, it is also important to check and confirm the claim settlement ratio of the insurer. This ratio will let you know about the reliability of the insurer.

Thus, these are the most important things that should be understood and kept in mind before finding and choosing a car insurance policy.