guide for buying car insurance first time. When you are buying a car then this is a very important decision in your life.since you are going to make a huge investment and buying an asset for yourself, it is a great day when you drive your own car from the showroom.As you buy a car then this is normal that you will buy a important documentation for your car that is Insurance.
As a first-time car buyer, you want to know about the factors of insurance?Then continue to read and get it known.
1.What is car insurance?
car insurance is a term used for the protection that you will buy them from an insurance company to protect your valuable car from a accidental damage, natural phenomena and also from theft.car insurance also protects you financially paying the cost of hospitalization in case of injury.The money which you will pay to an insurance company is a premium.
2.Types of car insurance
- Basic insurance that is mandatory by the government for all to take.this insurance is named as Third Party Insurance.In this insurance, you will only get protection against damage from third party car.
- the second one is compensated insurance which will compensate you for every type of damage even if the car is damage with your own mistake then it will be compensated.
3.How is premium determined?
first of all, you should know what is premium?premium is the amount which you will pay to the insurer to avail insurance protection.Nowadays with car insurance facility is present online so it is become very easy to visit these sites and find the best quote to buy the car online.If you have searched for that then you will find that there are a large number of providers available on the internet to serve you and all these providers have different quotes .so you may be wondering that how the cost of the premium is decided for policy.
factors decideding premium
when we analyzed the data then we came to know that some variables decide the cost of the premium which is discussed below:-
- car make and model
for instance, if you are going to buy insurance for SUV then you will have to pay more and if you buy insurance for hatchback then it will comparably low.
- Geographic location
when you are buying insurance in an urban city then the premium will be high than what you pay in an urban area for the same policy.
- Fuel type
cost of insurance will high for CNG/LPG vehicle than petrol and diesel vehicle.
- year of the manufacturing
older the car then lower will be the premium but the IDV will also decrease with increase in age of car.you can get further information about IDV below.
- voluntary deductible
This is the money that you will pay when you claim insurance.it is obvious that if this cost is high then the burden on insurer will reduce and the cost of the policy will decrease.
- Use of ARAI approved security devices
use of Arai approved devices like steering lock and an anti-theft device will reduce the cost of your insurance by 2.5%.
- No Claim Bonus(NCB)
when you do not take any claim in the time period of your policy then when you will buy insurance next time then you will get a 10 % discount and continue this for five years without any claim will make you get discount up to 50%.
make sure that you check all these terms while buying an insurance plan.
4.what is IDV?
IDV stands for insured declared value this is the amount you will get in case you lost your car or is beyond damage.usually, it is a current market price of your car.if the car is manufactured in 2018 then its IDV will be highest in IDV and it will decrease as the age of your car increases.
IDV = car selling price – depreciation charges
depreciation increases as the age of car increases.here is a schedule for same:-
AGE OF CAR ⌉ Depreciation %
6 months ⌉ 5%
1 year ⌉ 10%
2 year ⌉ 20%
3 year ⌉ 30%
5.What is personal accident cover?
It is the element of your car insurance coverage that protects you in case you are injured in an accident .as the rate of accident in India is very high so every policyholder must buy the plan with personal accident cover as it will protect the policyholder from paying a large number of fees to the hospital for his treatment.Now almost every insurance company serves this but still, you should double check your policy for this term.
6.what is comprehensive package policy?
comprehensive cover is a policy which is made to protects you and your vehicle.This policy protects your vehicle from damage caused to your vehicle in road accidents, or in case of loss, you can claim for this and you will be provided with the money of your loss.with this policy you can also get a personal accident cover for you between 100 to 2 lakhs as a premium in case you are hospitalized due to accident with that vehicle.
7.what is accident shield?
if your car meets with an accident and you are not a sole individual in that car then an insurer will compensate every member who is traveling in that car in case of both death or permanent disability during a car accident. this additional term makes the traveling in your car more safe for everyone.
some insurance companies that you can consider if you are buying insurance online
1.bajaj Allianz general insurance co limited
2.Tata AIG general insurance co limited
3.The oriental insurance co limited
4.The New India assurance co limited
5.HDFC ERGO general insurance co limited
In my next post, I will review all these companies for you.
Now I think that I have given every required information about car insurance but even if you have some doubt then you comment below and I will clear all your queries and if you want to know best insurance quotes then wait for my next post I will be posting about best insurance companies and best insurance quotes for you.
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