Car Insurance: Uncover 5 Facts

Many of us find car insurance a necessary headache. But, half-knowledge is dangerous! Here’s why you should know these lesser-known facts about car insurance without which it could be a troublesome deal.

Or

What if you can save tonnes of money? Yes, you read it right. Bear in mind there are few important facts that your insurer or the middleman might miss on telling you.

Let’s dive in.

Are you aware of the various types of car insurance?

Fact 1: Two Types of Car Insurance

• Third Party Insurance
• Comprehensive Insurance

Let's keep it simple, we’re briefing the terms below.

Fact 2: The hidden secret to “insure” your car

Usually, whenever we speak of car insurance, it engages two parties, one is the insurer who sells insurance and the other is the insured who buys insurance.

Then, who is a third party? Or what is Third Party car insurance? 

Knowing these terms are as important as getting your car insured. Let’s come to the point. So, whenever you purchase a car you are bound to buy Third Party Insurance, which covers damage, injury, death to the third party. Here, the third party can be one of the below: 

• People in another car 
• Damage to third person's property 
• Pedestrians walking on the road 

Things to Remember

• It is mandatory by the law- yes it is. Regulatory Development Authority of India (IRDAI) makes it compulsory to every car owner to buy third Party car insurance. 
• The coverage offered by the plan can be extended to the third party only. The policyholder is not liable to enjoy any benefit. 
• Any damage or loss to your car in not covered 

So, this leads to another question. How can I protect my car during any unforeseen event?

The appropriate term that suits your requirement here is Comprehensive Car Insurance.

What Does Comprehensive Car Insurance Mean?
Answer is here-

Make sure; whenever you buy a car always opt for comprehensive car insurance. The benefit of this plan is twofold-

• It comes with Third Party Liability insurance, which is mandatory by anyhow. 
• Secondly, it covers the damage or loss to your car 

Let’s say, you have third party insurance only and missed on comprehensive one. After a couple of months you bought the car, you bumped into someone’s property and cause huge damage. Sadly, your insurance only covers the damage happened to the property of the other person. You’ll have to bear the expenses incurred in the repairing of your car.

With Comprehensive Car insurance, you can enjoy the benefit of third party liability and own damage induced to the car.

Fact 3: Your Key to Save Money on Premium

Most of the time, we keep hearing the term ‘No Claim Bonus’, still unaware of the hidden benefits. Fret not!

What is NCB?

If you don’ make any claim, throughout the year, the insurer pays a bonus, which is nothing but a discount on the premium for the previous year. This is called No Claim Bonus. The best part is that it keeps increasing every passing year if there is no claim. One can get 20% discount in the initial year, which can go up to 50% at the maximum or five claim free years. The percentage keeps increasing year on year. 

Isn’t it appealing? Of course, yes. 

Hold on! Here’s one catch. What if the insured makes a claim in the third year? 

The NCB turns to ZERO.

Fact 4: What is Insured Declared Value (IDV)?

Just to keep it in a simple way, IDV stands for the current market value of the car. It is the value of the car that your insurer reimburses you in case of theft or damages that are beyond repair. 

Remember: Every year the actual value of your prized possession depreciates, so your IDV. 

Fact 5: Who decides the premium of the insurance you purchase?

This question may arise in everyone’s mind and we guess you are no exception. Isn’t you?

Who determines car insurance premium is always been the most-asked question.

Well, the answer is IRDAI. It pre-decides the Third Party Liability Insurance premium. But what about comprehensive car insurance

The premium of Comprehensive Car insurance depends on few factors including IDV, NCB, Discounts, Age and it may vary insurer to insurer.

What about getting the best premium quote for your vehicle?

A plethora of insurers that offer car insurance. But in a real sense, it is the most confusing part of the deal. One may get perplexed about what to pick or what not. However, when the insurance sector is booming, car insurance market is dominated by a few insurance companies and their plans. Among them, Tata AIG Car Insurance is worth mentioning. You can visit the website of the insurer to know in detail.

However, we suggest always compare car insurance quotes rather simply jump into one. This enables you to buy an informed deal and save more. 

Happy Driving!

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