By Paras Pasricha
The glow of Diwali is often accompanied by the gleam of a new car. With brands rolling out discounts and offers that are too good to resist, it’s the perfect time to bring home big-ticket items. But amidst the excitement of choosing the perfect model, it’s important to remember that selecting the right insurance is just as crucial.
Here’s breaking down five key points to consider before insuring your new car this Diwali:
1. Leverage your safe driving record by transferring your NCB.
While buying a new car, do not give up your good driving behaviour. Remember to transfer your no-claim bonus (NCB) for not making a claim in previous years. The NCB is linked to you, not the car. Don’t forget to ask your insurer for an NCB retention letter when you sell your car. This is the proof of your claim-free record, and applies if you are switching insurers. Usually, the letter is valid for up to 3 years and can be used to apply the same discount to the insurance premium, which can go up to 50%.
2. Compare policies online rather than opting for bundled deals.
When you have the keys in your hand, it’s tempting to just walk away with the most convenient or quickest option, which is to take the deal offered by the dealer. But before that, ask yourself – is this the best option? Maybe not. Dealers have specific tie-ups and their quotes are often inflated. A smarter alternative is to compare prices, add-ons, and other features online where you have a lot of options to choose from. You could also look at parameters like claim assistance and process, riders that suit your needs, cashless garage networks, and take your time to review exclusions, if any.
3. Don’t drive your car often? Go for usage-based insurance.
Not everyone hits the road every day, and such people don’t need to shell out the same kind of premium. Your new car might be an addition to your existing regular-use car or you might just be planning to use it for off-roading and road trips. In that case, you should consider going for the new-age insurance model of Pay-As-You-Drive and pay only for the distance driven. Typically, the base limit begins with 2,500 km per year, which can be taken up to 10,000 kms. One stands to save up to 30% with the lowest slabs under these plans.
4. Assess your add-ons to adjust your cost.
Balancing cost doesn’t mean cutting down on premium. For an asset like a car, the view should be long-term. For instance, the rains have been quite brutal this year, and so it’s wise to enhance your coverage against such risks and save substantially in the long-term, even if it means paying up slightly extra premium at the time of purchase. Choose your add-ons carefully and consider the ones that are useful to your specific driving conditions, like zero depreciation, engine protector and roadside assistance cover.
5. Finally, continue your comprehensive coverage.
Third-party insurance is a universal legal requirement but comprehensive coverage is important to stay protected. New cars are mandated to buy a 1-year own-damage insurance plan along with third-party coverage for 3 years. This means that for the second and third year, you are only required to buy own-damage policy. You can also buy a 3+3 plan that covers you for both own damage and third party for three years.
Lastly, read the fine print of the policy to avoid unexpected expenses or claim rejections later. Make an informed decision that proves to be useful when you need it the most.
