If you own a car, you will be aware that the law requires all vehicle owners to have a minimum third-party cover. While many vehicle owners opt for this cover for legal reasons, car insurance should be considered as more than just a compliance event. It should be purchased with the knowledge that it can protect your car during unexpected situations, such as accidents, natural disasters, theft, fire, and other similar incidents.
However, some may be under the impression that a higher-coverage plan can end up draining their savings. The truth is, if the plan is bought with care and after doing thorough research, it can provide better financial value in the long run, without over-straining your budget.
Here are 7 tips to help you buy car insurance online or offline in a way that honours your budget.
Table of Contents
1. Choose the Right Car Insurance Coverage
To start with, one needs to understand the three main types of car insurance coverage, which are as follows:
a. Third Party Car Insurance
As per the Indian Motor Vehicles Act 1988, every vehicle should have third-party car insurance. This basic coverage provides a financial buffer for third-party bodily injuries and property damage caused by the insured vehicle. This car insurance is not applicable to claims related to your own car.
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b. Own Damage Car Insurance
This car insurance policy is considered for vehicle owners who already have third-party insurance and prefer to extend coverage for their own car as well. This policy covers damage to your own vehicle from situations such as floods, earthquakes, theft, riots and accidents.
c. Comprehensive Car Insurance
This motor insurance policy provides the most extensive cover. It provides coverage for both third-party liabilities and your own car. For vehicle owners, this policy coverage offers protection from accidents, natural calamities, theft and fire. The plan also comes with add-ons*, such as the zero depreciation add-on*, engine protect cover, return to invoice cover, and more.
By evaluating the above options, you can choose the ideal car insurance as per your preference.
2. Assess Your Personal Risk Profile
The car insurance premium is decided based on several factors, one of which is your driving profile. Some of these may include:
- Driving history
- Vehicle age and current market value
- Claim history
While not all premium determinants are in your control, you can practice safe driving to ensure fewer unexpected situations. This may lead to fewer claims, which may result in cost-effective premium rates in the coming tenure.
3. Compare More than Just Quotes
To get the most value from your plan, it is important to check it across different aspects, not just the premium. When comparing plans, look for features and service points, such as:
- Coverage options on offer (the number of optional covers available)
- Cashless garage network (where the repair bills are handled between the insurer and the garage)
- Claim settlement support and services (how easy and accessible it is to raise a claim, and what services are available in the sphere)
- Reliability of the insurance company.
These aspects ensure you have a value-rich journey throughout your insurance tenure, so that the cost you pay for the plan is well-utilised on your end.
4. Choose Voluntary Deductibles Strategically
A voluntary deductible in car insurance is the amount which are deducted from the claim amount at the time of the claim. The deductible changes in your policy significantly affect the premium costs. Here’s how it reflects on your motor insurance premiums:
| Deductible Level | Monthly Premium | Upfront Cost |
| Low | Higher | Lower |
| Moderate | Balanced | Moderate |
| High | Lower | Higher |
5. Take Advantage of Concessions
Many car insurance providers allow policyholders to get a concession on premiums through the No Claim Bonus (NCB). If you have not raised a claim during your previous policy period, you may become eligible for NCB, given all other conditions are met. Consecutive claim-free years can lead to higher NCB rates, up to a specified limit.
6. Understand IDV Thoroughly
Choose the right Insured Declared Value (IDV) for your vehicle. In motor insurance, IDV represents the sum insured given to the policyholder from the insurer if the insured vehicle is stolen or faces a total loss due to a covered event. An adequate IDV helps you get the right coverage for your car. A higher IDV may increase the premium, while a lower IDV reduces the vehicle’s value. Hence, understanding this aspect in detail and choosing the right amount is important.
7. Select Add-ons Wisely
With comprehensive car insurance policies, you’ll get multiple add-ons to choose from. Some popular add-ons include:*
- Zero Depreciation Cover – Reduces/removes the depreciation deduction on the claim amount.
- Engine Protection Cover – Protects the engine and related components in case of damage.
- Roadside Assistance Cover – Provides support during roadside breakdowns.
You may get any other type of add-on* with the chosen comprehensive motor insurance. However, know that add-ons come at an additional premium, so choose only those that meet your needs and select the ones that add maximum value for your car insurance.
Final Thoughts
You can select the most feasible car insurance by evaluating the various types, assessing your personal risk profile, comparing plans thoroughly, and reviewing policy statements. To get the most out of your car insurance, you can also take advantage of concessions, adjust IDV, and opt for the right add-ons. All of these can help you precisely filter out motor insurance options and let you choose the most appropriate one for your car within your budget.
*Add-ons are subject to payment of an additional premium.
The above information is for educational purposes only. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.
