Finance

How to Choose Right Car Insurance According to Your Budget?

Did you know the punishment for not having third-party car insurance is Rs.2000 along with three months imprisonment?

To protect yourself from such avoidable expenses, the best solution is to have an insurance policy for that product. As per the Motor Vehicle Act of 1988, it is mandatory to have an updated and valid Car Insurance to drive a vehicle.

The automobile industry is increasing its manufacturing units leading to an increase in the number of cars on the roads. The industry that has been most adaptable to this change is the third-party car insurance industry. Third-party car insurance agencies have seen enormous growth in their policy enrollment.

Each company offers unique car insurance plans with their pros and cons. Thus, you may find it challenging to choose the right policy from this large pool of available insurance schemes, as the policy details of various schemes may be complicated and difficult to understand.

Hence, after doing some research, we have discussed some important things you can keep in mind before buying third-party car insurance. Plus, if you are thinking of switching your insurance company, you can check out the below-mentioned points.

Liability Coverage

First and foremost, you may check the extent of liability coverage provided by a car insurance plan. While choosing an insurance policy, you have to decide how much coverage you require if the whole car needs repair in an accident.

As per Motor Vehicle Act 1988, it is mandatory to have liability coverage if you want to drive on any Indian road. The liability coverage should cover both the driver’s bodily injuries and damages to the car.

No Claim Bonus

No Claim Bonus, popularly called NCB, is a premium discount given by the insurance agency if the policyholder has not made any claim in the previous year. It is provided as a reward to the policyholder for not claiming any loss.

You may check if this offer is available or not in the policy, as it reduces your premium payable in the current year.

Availability of The Add-on Cover

Generally, third-party car insurance companies provide add-on covers along with liability coverage. These add-on covers protect you from various risks. Some of the very common add-on covers are listed below:

Zero Depreciation Cover: As we already know, we minus the depreciation value from a car while valuing its current price. In other words, a car is a depreciating asset. This add-on cover does not factor in depreciation and provides you the full amount of the repair irrespective of the depreciated value.

Tyre Protection: This add-on cover protects your wallet and helps recover the money paid on replacing the tyres. Tyre replacement costs may be high at times.

Gearbox and Engine Protection: This add-on covers the replacement costs of gearboxes and engines, which also at times may be as high as or higher than tyre replacements cost.

Passenger Cover: It covers the co-passengers injury costs, if any. This add-on cover that the insurance companies provide helps recover the cost paid for the treatment of the co-passenger if any.

There are many more of these add-on covers provided by the third-party insurance companies that you can check with their agents and select accordingly.

Check out the add- ons available with different insurance providers at the Bajaj Finserv website that can make your motor insurance policy more comprehensive.

Premium

Getting all of these factors at an affordable rate should be your core focus. It is important, and the premium should not become expensive. The risk of getting a high premium can be dodged by making a budget for yourself before looking out for options. There is also one more thing to look out for when comparing the premiums of different third-party insurance providers:

The Deductible Clause

This clause is mentioned in the insurance contracts, which states that the policyholder should pay a certain amount of money for repairing the vehicle before the insurance company steps in to pay.

Cashless Facility

A cashless facility means you do not have to pay any amount upfront while settling claims. Usually, insurers have a vast network of garages that offer cashless facilities. The insurer can make payment directly to these garages because they have a tie-up. Thus, choose an insurer that has a good network of garages. 

 

Summing Up

Before stepping out in the market to buy the car insurance policy, you should do thorough research and remember to never-ever OVER DO your budget. Keeping all these things in mind, you are all set to buy a suitable car insurance policy well within your budget limits. A car is like your family member and should be taken care of with various expenditures in terms of maintenance and unforeseen accidents.

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