Mayank Gupta
Are you planning to buy a new car? You must have thought about the color, engine, features and the price point. But have you considered the car insurance you need to buy with your new car? If you haven’t, then let us help you with that.
It is a common assumption that one can or should get car insurance from a car supplier while buying car insurance. Car buyers think the dealer can help them get a good deal while purchasing insurance, but that is not always the case. While buying car insurance, you should do your due diligence as you did for the car.
You can check various policies available online, compare their features and premiums and choose the best policy suitable for your requirements.
Here is a quick checklist you should remember while buying new car insurance.
Know your insurance rights
As a new car owner, you have all the rights to gather and get correct knowledge about the car insurance you are aiming to buy. While car traders serve as points of sale for insurance firms and offer a good bargain, but car buyers do not always get the best-suited insurance policy for the car.
So before buying a policy from a car dealer, one should always cross-check the offerings of different insurance providers, including the new-age tech-first insurers. The digital native companies sell bespoke policies meeting all the requirements at a much-reduced cost which can be approximately 20% less.
This is possible because new-age companies do not pay any commissions to the agents and pass on that benefit to the customers. With the proper knowledge, you can save a sizable sum of money while buying a car insurance policy and renewing the policy.
‘One Size Fits All- ‘is a wrong notion
It is generally assumed that ‘one size fits all’ while buying car insurance. One should not fall for this trap and should always identify what they are looking for and tailor their insurance policies accordingly. Once you have identified your needs, you can ask your insurer to provide for the same, and you can pay for that. You will not need to pay for features that are not relevant to you.
Two ways to buy car insurance
You can either buy insurance from a car outlet or through an insurance provider directly. It is perceived that the car dealer is authorised to sell insurance policies, but that is not the case. Car dealers suggest those traditional insurers who are enrolled with them. This approach keeps the customers away from looking at other new-age insurers who offer customized policies at a lower premium. One should consider multiple choices before opting for a new car insurance policy.
The Unsaid Truth
Most dealers have a fixed rate card, and the customers can choose any insurer from the list, but the price remains the same. For optimising their margins car sellers push the insurance company, which gives them the highest commission. Due to this the customers ends up with the burden of loaded premiums due to this added commission.
Even though Indian laws make it mandatory to have insurance before the car hits the road, buying it from the car outlet is not compulsory. The Insurance Regulatory and Development Authority of India (IRDAI) says that customers have the freedom to purchase insurance from whomever they want. If the consumer wishes she can opt for a policy from a digital-native insurance company also. These new age companies provide buyers better benefits like huge premium savings, hassle-free renewal, and quick settlement.
The power of choosing your add-ons
While buying a new car insurance one should not look for generic motor insurance, often bloated with add-ons that are not needed. The customer doesn’t have the option of customising the policy. However, when customers buy directly from the insurer, they can add tailored add-ons like engine protection, zero depreciation coverage, roadside assistance, etc., at an additional fee.
To sum it up, it is safe to say that we should do our due diligence before buying any insurance product because the devil is in the details.
The author is Vice President – Auto Insurance, ACKO.
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
