When you’re looking to buy a vehicle, what are few things that come in your mind? The model, make, manufacturer, its reliability, mileage and the like. But often one critical aspect that gets overlooked is its insurance coverage.
Motor insurance is one thing that is a must-have if you own a vehicle. Be it commercial or personal vehicle, you need to buy an insurance cover for it. Due to its critical nature, the Motor Vehicles Act makes it mandatory to purchase a motor insurance policy.
With a plethora of alternatives, it can be confusing to pick out a suitable insurance policy. This article mentions some pointers that you need to know when you are shopping for one –
#1 Type of policy
The first and foremost choice is regarding the type of insurance coverage – third-party or comprehensive. A third-party policy is the bare minimum of insurance coverage you need to have, and it safeguards you from liabilities that might become due to a third person in the event of an accident or damages to property. Due to its limited scope, it is also known as a liability-only cover. An upgrade to third-party coverage is a comprehensive policy. The limitations of third-party plans are covered in a comprehensive policy with inclusion for theft, fire and own damages in its coverage. Whether you buy a personal or commercial vehicle insurance, you can get either type of insurance coverage based on your requirement.
#2 Deductible in your insurance plan
When you make a motor insurance claim, you need pay a minimum amount as standard towards the cost of repairs. This amount is called as the deductible of your policy. There is a compulsory deductible which is mandatory, and an optional deductible called as the voluntary deductible. Make sure you select only that much amount of deductible as it impacts the amount you need to pay from your own pocket during the claim. The benefit of choosing to pay voluntary deductible is reduction of premium.
#3 Claim settlement process
Apart from the policy features, the settlement process is also essential to be aware about. Selecting an insurer that offers simple and straightforward settlement process helps in making claims. You no longer need to worry about the hassles of to and fro with the insurance company for disbursing your claim.
#4 Insured Declared Value (IDV)
Insured declared value is the maximum amount that can be claimed under an insurance policy. For compressive policies, it is that amount which the insurance company pays in the event of theft or damage to your car beyond repair. Make sure you set the right IDV for your vehicle based on its use and estimated repair that might be required on an average.
#5 Network Garages
Network garages are a smart way to ensure cashless repairs of your vehicle. A broader network garage can aid in repairing your vehicle at many locations in the country.
These are some of the absolute must-knows about buying a motor insurance coverage. When you are comparing multiple insurance policies, do not forget to use a motor insurance calculator that not only help to compare the features but also ensures they fit right within your budget. So, keep in mind the above pointers and make the right choice of insurance coverage keeping in mind your requirements. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.