Buying the first car or bike is often a very big life moment for many, especially for middle and salaried class families. Before the vehicle hits the road, one has to buy a third-party motor insurance policy as well. This is where many car and bike buyers make some mistakes. Here we take a look at some of the key points you should keep in mind while buying your first vehicle. But first, let’s understand why motor insurance is important.
“Driving without a valid insurance policy may attract a huge penalty. Third-party is a basic insurance cover that protects the policyholder against any damages that could occur to a third person’s property,” says Vivek Chaturvedi, CMO and Head of Direct Sales, GoDigit General Insurance.
New cars are mandated to have a 3-year third-party cover and 2-wheelers must have a 5-year third-party cover.
“Anybody who owns a vehicle, would hate to see it damaged. And if it is a new vehicle, one would be even more careful. In spite of all the care, in case your vehicle gets damaged, motor insurance becomes your best friend, ensuring that your vehicle is repaired and back to working condition, without heavy financial loss to you,” says Nitin Deo, Chief Technical Officer at Edelweiss General Insurance.
Key points to keep in mind
Don’t always go by what the car dealer is offering
Your car/two-wheeler dealer may offer you insurance options at the time of purchase. However, experts say that you can also look at insurers’ websites to compare premiums and pick a plan that suits you best.
Buy comprehensive motor insurance
While the third party is mandatory, it is advisable to buy a comprehensive motor insurance product to ensure complete protection of your vehicle.
“A comprehensive plan covers third-party as well as damage caused to one’s own property. Damages caused due to natural disasters such as floods, cyclone, and earthquakes in addition to fire, riots etc., are also covered under a comprehensive cover,” says Chaturvedi.
Check insured declared value (IDV) closely
Another important thing that you must look at closely is the insured declared value (IDV) of the vehicle. IDV is the amount your insurer will pay should your car get stolen or bear irreparable damage.
“IDV offered may vary from insurer to insurer, so it is advisable to go with the insurer that quotes an IDV closest to the current market value of your vehicle. This usually is not a concern for new cars but should be kept in mind at the time of renewal,” says Chaturvedi.
Experts suggest that you should also look at the various add-ons on offer and pick the ones that suit your vehicle and your driving habits. Some useful add-ons include Zero depreciation cover, consumables cover, return to invoice cover, roadside assistance, engine/tyre protect cover, among others.
Don’t go by the premium only
Deo says you should always avoid choosing your policy purely on the premium as service and experience are also extremely important factors to consider.
“Insurance is a necessity, therefore, choose the right insurance policy that suits you the best. Customers must opt for mandatory add-ons like Zero Depreciation, Consumable expenses, Mandatory Excess, etc. for a truly cashless experience. Avoid choosing your policy purely on the premium as service and experience are also extremely important factors to consider,” says Deo.