The most important thing you need to understand about
car insurance policies is that every policy is not the same. In fact, it differs a lot depending on various factors.
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In this post, you can get detailed information about the factors that make a huge difference to your policy.
Thorough understanding of these facts will help you to get a suitable plan that will meet all your expectations. Moreover, it will provide complete value for your money in the long run.
There are many companies offering car insurance in the market. So, it is essential to compare car insurance so that you can get the best plan suited for your vehicle.
In this regard, you can get in touch with insurance agents or contact the customer care executives. Other than that, you can also use the online portals of insurance aggregators and get to compare different features of the policies in one place.
Car Size and Fuel Type
The size of the car makes a lot of difference to the policy and it will also impact the premium charged for such policies.
In general, cars are generally classified as commercial and personal vehicles. This is with regards to the purpose for which the car is used. Moreover, the registration formalities also change for both these varieties of vehicles.
In the same manner, cars are also classified as per the size of the vehicle. Small and mid-range cars command less premium whereas large cars and SUVs are charged a higher premium.
Even the fuel type of the car makes some difference to the policy. Petrol and diesel vehicles are charged less when compared to CNG fitted vehicles. You may get some discount however for electric vehicles.
Age of the car
The age of your car also makes a lot of difference to the car insurance policy. The new cars need to get mandatory cover for at least three years as per the latest guidelines of IRDAI.
Earlier, this was restricted to just one year. However, for old cars, you can choose to renew the plan for one year or multiple years.
In general, as the age of the car increases, the coverage offered for the car decreases. This happened because the overall market value of the vehicle decreases with time.
The standard rate of depreciation is about 10% for the first few years. Thereafter, it depreciates by 5 % for the next few years.
Depending on the age of the car, the coverage changes and the premium of the policy also gets affected by this factor.
Type of Cover You Choose for Your Car
When you choose the basic third party coverage, you will get insurance at very low rates. However, the coverage is also very basic and you can only get coverage for damage done to third-party life and property by your car.
Your own car will not get any protection with this plan. You can check third-party car insurance price from the online portals and choose them if your budget for the insurance policy is not very high.
It is also well suited for old cars as the market value of such cars is also very less when compared to that of new vehicles.
When you choose the comprehensive coverage for your car, you can expect a sea change in the features. You can get many covers that are not there in third-party plans. This is slightly expensive when compared to other options but offers the best protection for your car.
Insurance for Old Car or New Car
When you are buying insurance for your new car, it makes sense to choose the comprehensive plan. It offers complete protection even for own damage along with third party cover.
You can even add additional covers depending on your individual needs and budget for the insurance policy. As per the latest guidelines of IRDAI, you need to get compulsory coverage for the first three years. This will also provide you with some discount when compared to the previous annual plans.
On the other hand, when your car has become very old, you can check the third party car insurance price from the market. You can consider this option if it saves you a lot of money.
Remember that the coverage offered by a comprehensive plan for old cars will be very less. Moreover, it does not make much sense unless you have a considerable budget for the policy.
The Tenure You Choose For The Policy
Earlier, the car insurance policy was available for only one year. The tenure was the same irrespective of the policy or the service provider from whom you are buying the policy.
However, the renewal rate was very less and this has prompted the IRDAI to implement new rules. IRDAI make it mandatory to get three years coverage for all new vehicles.
In this regard, multi-year insurance plans are now readily available in the market. So, you can benefit a lot by choosing such plans as it offers a better discount on the premium.
You can see it yourself when you use the car insurance calculator to know about the premium charged for different options in the market. Compare all the options and see which one suits your needs in the best possible manner.
Previous Track Record of The Car
Your previous track record matters a lot when it comes to a car insurance premium. You will be charged a higher premium if you have a bad track record with regards to driving your vehicle.
On the other hand, you pay less when you have a clean track record without any accidents or damages to your vehicle in the past. You will be rewarded by way of some discounts when you go for the next policy renewal.
In this way, you should always drive responsibly so that you can significantly reduce the premium for any policy in the long run. The good thing is that the no claim bonus offered for zero claims in the previous tenure can be carried for many years.
This keeps on giving a further discount on every renewal. You can carry this no claim bonus even when you decide to change your service provider in the future.
Safety Gadgets Installed in The Car
Many car owners are not aware of the fact that installing safety gadgets in the vehicle will help them save lots of money on the insurance policy.
Note that the insurance policy premium is calculated based on the amount of risk involved in covering the car. When the car is equipped with the latest security gadgets like GPS tracking system and anti-theft locks, the risk of the car getting stolen reduces by a huge margin.
In the same manner, the ABS system and the anti-collision system will reduce the chances of an accident in the long run. Furthermore, insurance companies can offer some discounts for such vehicles.
You can discuss these additional fittings with the company agents and get to know about how this can impact your car insurance policy in the future.
From Whom You Buy the Car Insurance Policy
Every policy in the market is not the same and where you buy the policy matters a lot. When you compare car insurance from various sources, you will understand that different companies may charge different rates for the same features.
For this reason, you should always check different service providers and see what features they are offering in the policy. When you notice that you are getting a better deal with competitor companies, you can easily shift to them during the next renewal without any hassles.
How You Buy a Car Insurance Policy?
There are different ways in which you can buy insurance for your car. The best among them is to choose the online brokers as you will be able to get the best deals in this manner.
When you want to buy the policy directly by visiting the office of the insurance company, you will have to spend lots of time. Moreover, the cost may go up slightly as they do not offer discounts like online brokers.
In this regard, you should give preference to online aggregator portals as this will allow you to compare different plans and you can buy insurance from any company through the portal.
These are some of the facts that make a huge difference to the car insurance policy. You can check them whenever you want to buy insurance for your vehicle.
If you have any doubts in this regard, make sure to get them clarified before buying the policy. Moreover, this will save you from any troubles in the future.
Now I’d like to hear from you.
Did I miss any other facts relevant to a car insurance policy?
Or maybe you have a question about something.
Either way, let me know by leaving a comment below right now.
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Published on: Dec 25, 2018
