Common pitfalls in a car insurance policy and how to avoid them

Despite repeated awareness and options, people tend to make some common mistakes while opting for car insurance.

Common pitfalls in a car insurance policy and how to avoid them
As per the Motor Insurance Act, only the third-party motor insurance cover is mandatory in India. However, neither the policyholder nor the policyholder’s car gets protected under this cover.

By Vivek Chaturvedi

You don’t wake up one fine morning, walk into a showroom to buy a car and drive away with it. There is a lot of research that goes into buying a car. You want to know what the best moving car brand in the market is, the colour, the right model, budget, other specifications, etc. While buying a car is considered one of the most important decisions, your prized possession also needs to be protected. Therefore, choosing the right car insurance becomes essential.

Insuring your vehicle is as important as oiling it for a smooth ride.  We are always on the lookout for the right insurance cover that will give the maximum benefit. Despite repeated awareness and options, people tend to make some common mistakes while opting for car insurance. Avoiding these can help in a lot more saving and future investment in the car. Some common tips you can keep in mind while choosing a policy:

1. Don’t choose the lowest premium

Buying a car leaves a huge dent in our pocket; hence, most of us go for a minimum amount of premium insurance. The cheapest insurance policy might save you some money now, but because the cover might not be comprehensive, you will end up with major future loss. To determine the right policy, one should compare the insurance covers available in the market and what is covered in the policy.

These days, insuretech companies send instant quotes and clearly call out the details of the policy. Choose a policy from the company that provides simplicity at its core. It must be focused on providing a smooth experience from the point of onboarding to the point of claims.

2. Don’t forget those add-ons

Motor Insurance covers so much more than third-party loss. We do a thorough quote comparison, including add-ons. You know your vehicle better; hence, you will be in the best position to specifically get the insurance quote that caters your needs than an agent or a broker. Look at each component of the policy separately to make sure the cover qualifies your needs.

You could look at add-ons like zero depreciation, return to invoice, passenger cover, breakdown assistance, etc. to ensure that you are covered in case of any eventuality.

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3. Check what is covered and not covered

What is covered by the insurance depends on the product and premium you choose. Usually, car insurance covers accidental damage, fire and damage caused due to natural disasters, etc. However, you may want a personal accident cover in case of injury . Natural disasters like flood or earthquakes can happen unexpectedly. Look for a cover that protects your car in such conditions as well.

In most cases, what is not covered is driving carelessly and unlawfully. In India, for example, we see a lot of instances of people driving without a valid license or during a flood, or after drinking. Most Policies just need us to be a responsible driver on the road leading to better safety.

4. Read the insurance policy document

Insurance policy documents are generally difficult to understand. People choose policies based on advice from agents and brokers without going through the documents thoroughly. This is one of the biggest mistakes that is made. One must check the document not only to understand the details of the policy but also to ensure that personal details like policy holder’s name, registration number, claim bonus percentage, IDV, and nominee information are accurate.

Always have questions and checks to help you decide which policy to buy. After all, insurance will be with you for life, protecting you and your car throughout.

(The author is Head of Marketing, Digit Insurance)

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