What Questions Should I Ask about Car Insurance?

Purchasing your own car arrives with a major legal obligation.

According to the Indian Motor Vehicles Act, 1988, you must buy a third-party car insurance policy for your vehicle if it is going to ply on the road. Buying a comprehensive insurance plan is also a sensible way to get instant financial support in case of damages or loss of your car.

However, while buying a policy, many factors like coverages, legal terms, exclusions etc. can be confusing for you. So, it makes sense to understand every policy aspect by asking the appropriate questions.

Questions You Must Ask Before Buying Car Insurance

The questions to ask while purchasing a car insurance policy are as follows: 

1. What Is The IDV or Insured Declared Value of The Policy? 

An important factor of your car insurance is its IDV or Insured Declared Value. IDV is the maximum amount you can expect as reimbursement from the insurer in the event of any damage or theft of your car. So, make sure to ask this question at the beginning. Remember that the IDV must be equivalent to your car’s current market value. So, do not settle if the IDV is less than that.  

2. What Is Excluded from The Car Insurance Plan?

Apart from knowing the insurance policy inclusions, it is also vital to be aware of the exclusions. In a car insurance policy, the things that are not covered under the plan are its exclusions. Therefore, claims against these will be rejected. So it is vital to understand the exclusions of a policy before buying it. 

Following are some general exclusions of a car insurance policy:

• Damages due to regular wear and tear are not covered.

• Damages caused when driving without a valid license are excluded.

• Manufacturing defects, electrical or mechanical problems of a car are excluded.

• Damage to the car when driving in an intoxicated condition.

• Additional exclusions that may be mentioned in the insurance policy. 

3. How Much to Pay for Buying a Car Insurance Policy?

Several factors are involved in deciding the premium, including the car model, present market value, type of car insurance, number of car insurance add-on covers, and so on. Therefore, the prices of car insurance policies differ from each other to some extent. 

So when you are opting for a car insurance policy, do not forget to take the help of a car insurance premium calculator before you make your decision. Doing so will give you an idea about the estimated cost of that policy. You can access this free online calculator on any website of a car insurance company.

4. Is the Voluntary Deductible Substantial? 

Deductibles are a portion of the settlement amount of a car insurance claim. Since the insurer will bear most of the repair costs, you are only required to pay the deductible amount. Generally, a car insurance policy has two categories of deductibles, voluntary and compulsory. You will have the opportunity to select the amount of voluntary deductibles. However, the compulsory deductible amount remains constant. 

5. Is It Necessary to Buy Car Insurance Every Year?

In car insurance policies, tenure plays a significant role, as the validity of this plan entirely depends on it. There are both long-term and short-term plans for your choice. According to laws, it is obligatory for you to buy a third-party insurance plan for your car. Choosing a long-term policy will be beneficial since it may come with some discount on the premium value. However, it depends on your affordability.  

6. Should I Opt for Add-On Coverage?

Add-on covers refer to the additional insurance protection that you can get over and above a standard car insurance policy. You may need to pay a certain extra fee for this additional coverage. A few examples of add-on covers are roadside assistance cover, personal accident cover for passengers, outstation emergency cover etc. 

Financially managing your car can be quite complicated and many car buyers consider personal insurance coverage in the add-ons while buying their insurance policy. You should discuss each add-on cover with your insurer and its scope to understand how they can benefit you. Accordingly, you should choose a policy that includes the essential add-ons and comes at an affordable rate.

7. How Should I Understand The Car Insurance Jargon? 

The terms mentioned in any car insurance policy are a bit technical, and they may happen to be confusing for you. Ask the insurer to clarify them before buying the policy. Alternatively, you can also go through the car insurance glossary and check the confusing terms associated with motor insurance. 

To conclude, these are some vital questions that you may ask while buying a car insurance policy. Being a prospective buyer opting for this policy, you are suggested to go through its terms and conditions with diligence.