17 Tips to Select the Best Car Insurance Policy: Step by Step Guide

17 tips to select best car insurance

I have experience that when people want to buy a car insurance policy then some of them directly go to the insurance company or agents or directly online and buy it. Some people usually do not do any kind of research or homework to get a good insurance policy for their vehicles.

Motor insurance is a very important decision of yours and you should do good homework and research before buy it.

Before I go in detail tips I will advise you to ask 3 questions from yourself. First – Buying a car insurance policy is an important decision for you or not? Second – Why should you buy the best one? Third – How to choose the best car insurance policy?

Here are the following points which you should check while buying a car insurance policy.

1- Selection of Add on Covers

There are numbers of Add on Covers available for car insurance. But first of all, you have to understand your requirements. Check which car you are using. Is it a small car or mid sedan car or its big car or is it SUV?

Understand the details of Third-party and own damage part of the policy carefully. What you want to include and what you don’t.

Always select add on according to your car. Insurance companies have the option to make it possible to customize your car insurance as per your needs. After paying an additional premium for add on you can take policy according to your expectations.

Many add on are available like zero depreciation, Engine cover, Consumable cover, Roadside assistance, Tyre cover, Return to invoice, no claim bonus protects, personal belonging cover, key protect cover personal accident cover for unnamed passengers, and many others.

You can choose according to your needs and company’s terms and conditions.

2- Comparison of Features and benefits

Before buying car insurance always have a comparison of it. Select four to five best companies and compare their premium and features. You will see a lot of differences in them.

Take the help of the internet or agent and check it online or take a quotation of four to five companies from your insurance agent.

Check and Analyse all the details and select the best one which is suitable for you. Some people compare to get a cheaper policy. But I will advise you don’t think and compare it in this way.

You should compare it to get the best one not the cheaper one. Always purchase a car insurance policy with adequate features and benefits with a competitive premium.

3- Discount Options

Whenever you are buying car insurance you should always research the option of discounts available in the market. Different companies offer different discounts. Keeping all your requirements in mind also compare discount available in quotation.

Discount depends on the basis of many factors like the manufacturer of the vehicle, Models, Year of registration, Location of registration, any claim in the last policy period, your vehicle is petrol or diesel, etc.

But the most important point, you should never ever compromise on features and benefits on behalf of discounts. Give first priority to the best car insurance policy. Discount is secondary.

4- Check IDV of Your Car

IDV means Insured’s Declared Value which is the current market value of your car. Or you can say that IDV is the maximum insured value of the car which is paid in case of theft or total loss of your car.

It is always set with a depreciation of a fixed percentage. It is from 5% to 50% depreciation percentage.

My suggestion is that you check your IDV before getting your policy. I advise you to choose the maximum value of your car. Of course, it will affect your premium but it will be beneficial for you in case of total loss or theft of your vehicle.

Sometimes the insured’s declared value may vary from insurance company to insurance company. But it’s your decision to choose the best suitable one for you.

Sometimes people choose lesser IDV because it cost less premium which is not ideal or you can say not a correct practice. Just to reduce the premium you should not select the lower value of your vehicle.

Insured’s Declared Value = Company’s listed Price – The value of depreciation

Pls don’t always go for the higher side of IDV. Too much higher or too low both are not ok. It’s important that you are selecting the IDV which is most suitable for your vehicle.

5- Roadside Assistance (RSA)

Suppose you are going on a road and due to some reason your car gets breakdown midway. Now you have to arrange a towing facility and manage it up to the garage and then it will be repaired.

I let you know that car insurance companies provide different kinds of Road Side Assistance (RSA) as an add on which provides you many emergency services on a very minimal amount. And this RSA may be helpful to you at the time of emergency on the road.

Road side Assistance may include few of these services or combinations:

Towing on Breakdown

Minor repair

Supply of fuel

Arrangement of keys

Flat tyre

Accommodation benefits

Taxi benefits

Guidance over phone

Battery jump start

Arrangement of rental benefits

Other Services.

When you are buying policy then pls check all available options of RSA and select the best suitable for you.

Read the terms and conditions of the RSA before taking this add on. I let you know that in this add on most insurance companies do the arrangement of the services but the charges of it are paid by the insured only.

For example, if a company is providing an arrangement of fuel then in this case company is only making the availability of the fuel but the charges of fuel are paid by you only.

Always read the conditions carefully in your policy so that you can use your services in the best way.

6- Claim Process

Every time whenever you are going to purchase car insurance it is the most important thing to check and that is the claim process. Do you have the option of a cashless claim or not? Maybe the company doesn’t have a cashless claim from where you are taking your policy.

In that case you have to repair your car from your pocket and your bill will be reimbursed later. But if you have a cashless claim process then it will be very easy to process the claim on network garages on a cashless basis.

Always try to check companies’ claim track records, it will help you to understand the companies claim status. Please research the claim settlement ratio of the company. Either theft claim or other own damage claim, you may need any time.

Most important as a customer you should see the cashless garage network also.

7- Selection of Right Insurance Company

Choosing the right and best company is the most important point while purchasing a car insurance policy. How will you decide which company is best for you? In my view first, we have to make the following checkpoints of your expectation from your car insurance policy:

You should get maximum feature and benefits.

Go for getting good discount and less premium you are charged.

You Should check that a Cashless claim is available and the claim is given on time. And the process of claim is hassle-free.

The company is giving good services whenever required like Claim, Endorsement any or any other services.

If any company is giving all the above things then we can say that this is the best company because it is fulfilling our expectations and on time.

8- Automobile Membership Discount

If you are a member of the Automobile Association of India then insurance companies provide you a discount. This you can get a 5% discount on OD premium subject to maximum Rs.200. You should not take this discount if you are not a member.

If your agent has put this discount in your policy to make the policy cheaper even you are not eligible for it then you should contact your insurer to remove this discount.

9- Premium of Policy

There are many factors on which the premium depends. Factors like your car make and model, cubic capacity, fuel type – its petrol or diesel, Location of registration, IDV of your car, no claim bonus status, Discounts etc affect your car insurance premium.

For

First Example: if your car IDV is high then your premium may be high and if IDV is less the premium will be low.

Second Example: If you are getting a higher discount then in that case your premium will be lesser and if your discount is lesser then the premium will be higher.

Third Example: if you have a good amount of NCB (No Claim Bonus) in your car insurance then chances are you get more discount.

10- No Claim Bonus (NCB)

NCB means NO Claim Bonus, it is a kind of reward that is provided by car insurance companies to those customers who do not file any claim in their policy. It means that the company is giving rewards to you for being a good driver and vehicle owner.

If you are buying a car insurance policy then always check what is the eligibility of NCB for your policy. No claim bonus discount starts from 20% if there is no claim in the first year of the policy. It is a maximum of 50% if there is no claim up to 5 consecutive years.

If you have not taken any claim in previous policy and you are eligible for no claim bonus then take the NCB discount. But most important to note if you have filed any claim in previous policy year then no claim bonus will be zero.

So, if your no claim bonus eligibility is zero then take care that you are not taking any no claim bonus discount.

Because if you are taking no claim bonus discount even you took a claim in the previous policy then the company may reject your claim in the current policy period if any. So always double-check that you are not claiming any NCB discount if you are not eligible for it.

No claim bonus is terminated if a policy is not renewed within 90 days from the date of the expiry of the policy.

11- Anti Theft Discount

When you are buying a car insurance policy you should always have a look at an anti-theft discount. This discount is given only if you have installed an anti-theft device in your car. Normally insurance companies offer this discount 2.5% on own damage premium or maximum Rs. 500. 

This discount is given basically to encourage the maximum number of customers to have installed an anti-theft device. Because it reduces the total number of thefts claims for the company.

So, if you have an anti-theft device in your vehicle which is approved by the Automobile Research Association of India then you should avail of this discount.

If you do not have this device then, in that case, you should not get this discount. if you have taken this discount and your car is theft then the company can reject your car theft claim.

Nowadays many new segment cars come with an inbuilt anti-theft system. If it’s not inbuilt then you can get installed it separately. Anti-theft device must be approved by the Automobile Research Association of India (ARAI)

12- Look For Deductible Options

There two kind of deductible available in car insurance.

Compulsory Deductible: Which is fixed by insurance company and customer doesn’t have the option to choose it or not.

Voluntary Deductible: Which is available for customer to choose it or not. It is not mandatory.

Voluntary deductible is the option that helps to reduce the premium and whenever there is a claim arise then you have to pay the voluntary deductible along with compulsory to the insurance company.

Companies have various voluntary deductible options. So, it is up to you only to choose the right one for you. Check how much premium gets reduced on a particular deductible option and select the best one.

13- Agent Role (Buy Online or Offline)

An insurance agent role is very important when you buy car insurance. You can buy online or from any agent it’s your choice. Both options have their own pros and cons. There are many other options like dealers, bank and other from where you can but it.

There are some points which you can consider to buy.

Through Agent

It’s always a good option if you are buying a policy through an agent. Agents play a very important role at both the time first at the time of buying an insurance policy and second at the time of insurance claim.

At the time of buying an agent is physically available to explain to you all the details related to the policy. You can ask anything related. It is important that whatever the things explained by the agent is correct and trustworthy. So have a good insurance agent is also important.

At the time of any insurance claim agents can help you to process the claim. Maybe you are not aware of the proper claim process and or documentation required. The agent can help you at that time.

The agent can also help you when you want any kind of changes in your insurance policy. It can be anything like address change, or contact details change or addition of CNG or anything.

So having a good insurance agent is good option.

Through Online

Nowadays our life has become very fast and we stay most of the time on the internet. Companies are also offering many discounts and encourage online purchases.

You can check details and comparisons of car insurance policy at any time online. There are so many options available on the internet. There are so many insurance companies that are available on the internet. You can easily compare it.

Many of them also provide instant chat facility also where you can ask any question and resolve your doubts if any. They also provide you call back where you can discuss.

Day by day insurance companies also improving their online buying process so that customers can buy it easily.

14- Covernote and Policy Certificate

Covernote

It is a temporary document of insurance which is provided by the company as proof of insurance cover and its valid for only 60 days. It can be an online cover note or offline cover note as well.

Insurance Policy

This is the final document and piece of certificate which is valid for one year. It provides you the details of your policy covers. It is valid until your renewal date.

Why am I discussing it here? Because in the current scenario sometimes companies initially provide you with only cover note. When insurance company get their premium and complete their QC-Document check then only provide the policy.

Always check your insurance policy when you buy it. Check whether you have received a cover note or insurance policy. if you have received only cover note then be assure that you follow-up your insurance agent or company to get it on time.

15- Verify Your Policy Once You Get it

After buying a car insurance policy we usually put it in our car or at home. Having a detailed look at the policy is ideally required. I would advise you please check all the details on policy and also verify it from your insurance company if required. Check all the covers which you opted at the time of buying.

If you find anything incorrect or missing then contact your agent or company and process to change the required things immediately.

For Example: You have CNG in your vehicle but at the time of buying your policy you or agent forgot to mention it. Now you got the policy and you didn’t check it.

After some time your car got hit in an accident and it got damaged. Now when you will file the claim then your claim may get delayed or rejected because as per policy you have not mentioned your CNG details.

So, as a customer you should always provide all the details correct to the insurer. And you should check your policy at least once in detail.

16- Renewal Process

You must know your car insurance renewal date. If you missed the date of renewal and not renewed your policy on time then your policy will get inactive.

One day delay can cost you a huge amount if your car gets any damage in an accident. So, I will advise you please renew your car policy on time.

Most of the companies send you email, SMS and also remind you on the phone before the expiry of your policy.

You can renew your policy online or offline. Mostly both the options are available. It is up to you only which option to choose.

17- Read the Terms and Conditions

Last but not least I will advise you please check the terms and conditions of your policy. Read the policy details and if you are not clear of any of the points or you are confused then you should call your company or agent to understand it.

It will help you to get you the required services on time and you will not be surprised at the time of any claim. But if you are not aware of your policy and its T&C then you may face a problem if there is any specific condition and you don’t know. Please read all inclusion and exclusion in the policy.