What Factors To Consider While Comparing Car Insurance?
With the convenience offered by ecommerce, the insurance purchasing process has undergone several changes. Nowadays, people can buy and enquire about insurance policies from any device that has an internet connection. This has led to an increase in the awareness among the people about insurance and has also become one of the top reasons for high sales number.
Even with easy accessible knowledge at their disposal, people still buy insurance without proper information. This is more common in the case of car insurance purchase, as insurance is among the mandatory documents that one should have while driving a car in India. While some people hardly know the name of the company while insuring their vehicle, there are some people who take insurance seriously and get the best out of it.
Before you buy a car insurance policy, it is important that you compare it with different policies available in the market. Here are the factors you need to consider while comparing a car insurance policy:
- Insurance type
For a long time, there was no new type of car insurance in the insurance industry. Recently, insurance companies came up with the concept of Zero Depreciation. This new insurance type is very different and more beneficial than the old one. The Zero Depreciation Policy offers full coverage of damage expense in the first few years.
When you are looking forward to buy an insurance policy, premium is the most important thing that one should consider. Premium is the amount you pay for insurance on monthly or yearly basis. Since this amount is a constant transaction; you need to make sure paying this amount should not be a financial burden. There are various companies that offer car insurance for premium as low as INR 1,000.00 per annum.
- Insurance Cover
Sometimes low premiums can land you into trouble. Most companies that offer low premium insurance policies then lower the coverage spectrum to do so. While other companies that charge you a usual amount premium, can have some important exclusions too. Hence, it is necessary that you check the types of damages covered by the car insurance company before buying it.
- Insured Declared Value (IDV)
IDV or Insured Declared Value is the maximum amount offered by the insurance company in event of theft or loss of the vehicle. A part of the premium paid for insurance is allocated towards IDV. The proportion of IDV decreases as the vehicle gets older. IDV’s depreciation start when the vehicle is 6 months old, then it covers only 95 percent of the claim. Once the vehicle is more than 4 years old, the IDV claim reduces to 50 percent.
- Claim Settlement Ratio
Most of the people who buy car insurance are unaware of the fact that they are not fully covered. This is because the claim settlement ratio specifies that the insurance company is liable to pay the claim up to a certain percentage and the rest of the expense has to be paid by the policyholder. Even though you are comfortable with buying policies like these, you have to watch out for such sneaky loopholes.
Since insurance policies can be complex, you need to know that there are some important things that should be covered by a basic insurance policy. These will not only help you save money on the insurance policy but also keep you secured in the long run.
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