Own a car? Check top mistakes to avoid while buying a motor insurance plan

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Updated: August 20, 2021 3:16 PM

Motor insurance plans are not just meant for compliance and adherence to rules as only third party insurance is mandatory and not the comprehensive one.

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Even as buying a motor insurance policy is mandatory for all car owners, a large number of vehicles are still uninsured. Motor insurance plans are not just meant for compliance and adherence to rules as only third party insurance is mandatory and not the comprehensive one. Rather, experts believe it is prudent for every car owner to protect their vehicle from external damages by opting for a comprehensive motor insurance plan.

“Motor insurance plans go a longer way than just compliance and adherence to rules, as only third-party insurance plans are mandatory and not comprehensive. However, it is prudent for every car owner to protect their vehicle from external damages by opting for a comprehensive motor insurance plan,” Dhirendra Mahyavanshi, Co-Founder, Turtlemint (An InsurTech Company), told FE Online.

While buying a car insurance policy, vehicle owners tend to make several mistakes.

According to Amit Jain of Liberty General Insurance, some of the top Motor insurance mistakes even smart people make are:

  • Not knowing the insurance coverage one needs – Instead of going for the bare minimum coverage as mandated by law, one should base the decision of buying motor insurance on their unique protection needs. This would be based on the model, type and age of vehicle, driving experience, climatic conditions of the living and commuting area. There should always be a right balance between cost and coverage.
  • Not buying Add-on covers or opting for a higher deductible to reduce premium – At the time of a claim, add-on covers and a lower deductible can save significant out of pocket expenses.
  • Not providing accurate information on Car Insurance Application – Providing false information while applying for motor insurance may lead to the policy being cancelled or a claim being rejected. Many insurance companies avoid insuring vehicles that have a cancellation on the record.

Mistakes to avoid

Mahyavanshi suggested one should not contemplate too much to find the “perfect” car insurance plan as long as s/he avoids the following basic mistakes.

Mistake – Buying only a third party liability policy to fulfil the legal mandate.

The right course – Buying a comprehensive motor insurance policy for an inclusive scope of coverage.

Mistake – Not comparing before buying

The right course – Comparing between different policies to get the most comprehensive coverage at the lowest premium.

Mistake – Looking only for the lowest premium when comparing between plans.

The right course – Comparing both the premium vis-à-vis the coverage offered and choosing a plan which provides the best of both worlds.

Mistake – Not opting for add-ons for fear of increased premiums

The right course – Choosing the suitable add-ons for a more comprehensive scope of coverage and higher claim payments.

Mistake – Not renewing the policy on time and losing the no claim bonus

The right course – Renewing the motor insurance policy every year, before the due date, to enjoy a high no claim bonus and also to avoid the hassles of inspection.

Mistake – Choosing a low IDV to reduce the premium

The right course – Opting for a suitable IDV to maximise the claim payment at the time of total loss or theft of the vehicle.

Mistake – Not using the accumulated no claim bonus when switching vehicles

The right course – Transferring the accumulated no claim bonus of the last policy to the new policy when switching vehicles to reduce the premium outgo.

Mistake – Not declaring modifications done to the vehicle

The right course – Declaring every modification or additional change done to the vehicle that is not factory-fitted when buying motor insurance for complete coverage.

Identify which of these mistakes you would be making when buying a motor insurance policy. Avoid these mistakes to choose the right plan and get the most out of the coverage.

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