Choosing a good car is not easy at all, but after that you need to get a car insurance too. There are many companies which provide car insurance. Every company has different plans as well as terms and conditions. So, buying a car insurance can be considered as quite a riddle in itself. However, one should choose a car insurance only after acquiring proper information and with utmost care.
But we can’t say that everyone is quite expert in insurance matter. So, in this case, if someone who doesn’t have proper knowledge regarding the car insurance, what should he/she be taking care of. For this, some of the tips have been provided here.
• Vehicle Insurance Type
The plans that are usually provided by the companies are broadly classified into two categories.
First is the, Third Party Liability Insurance, in which the damage to property is covered, accidental death and injury to a third party. This plan is just mandatory for the vehicles which are plying on the road.
Second is the Comprehensive Plan, which usually is preferred option by many as it covers for both ‘Own damage’ and legal liability of third party. It also covers theft or damage caused by unforeseen perils like cyclone, earthquake, fire explosion etc.
• Factors affecting premium for insurance
The factors which affect the premium calculation are based on the risks that the insurance company will be underwriting and these can be grouped under four categories.
- The Vehicle Related Risks like the Make, fuel type and cubic capacity etc. are a few parameters which will determine the premium. Some vehicle like SUV and commercial vehicles often need higher premium payouts as insurance firms get large numbers of claims on such vehicles.
- The location related risks which depend on the area of registration. Usually premiums are high if you live in urban area, near highways or densely populated area. If theft is high in the area where you live then the premiums go up.
- Claims history Related matters: If claim for your vehicle insurance then premium can go up following year.
- Driver related matters in which the age and profession of the driver is taken into account. If there are multiple drivers then the premium goes up.
• Tips for Reducing Vehicle Insurance Cost
Deductibles or excesses are the amounts over and above which a claim is payable by insurance provider.
You can reduce the premium payout by nearly fifty per cent every year, if you don't claim insurance on your vehicle. Insurance companies give the benefit of no claim bonus as record of your good driving year after year.
Few cars come with enhanced security systems which are built-in such as anti-theft alarms and immobilizers. There is low probability of theft of such cars. These cars can be insured for lesser premium.
• Some useful Add-ons
- Nil-Depreciation Insurance
A nil depreciation policy covers for complete claim for rubber and plastic parts. Generally an insurance company will pay only for fifty per cent of value for these parts that are subjected to wear and tear.
- Personnel Cover
A normal comprehensive insurance cover will include personal accident coverage for the owner of the car. For a small fee, additional users who possess a valid driving license and are using the car can also be covered under the insurance policy.
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