If you have to take insurance of your car or bike or renew it, which you do every year, So I will tell you things to know before buying car insurance in India and about whom probably everyone should also know.
Now it doesn’t matter much at what value you are taking insurance or how much premium you are paying, you will have to face the real problem when you go to take the claim.
Now I do not want that you get less or no claim or you do not get money according to your expectation and if any of these situations arise in front of you, then the purpose and benefit of your insurance is over.
Therefore, if you read this article completely till the end, then you will get to know a lot about insurance and you will never get cheated about insurance and the next time when you go to get insurance for your car or bike, you will already know what things you have to keep in mind.
Things to know Before Buying Car Insurance in India
First of all we know what is Frist Party Insurance and Third Party Insurance –
First Party – First party means the one who is taking the insurance or policy, that is, you. If you take First Party Insurance, then the insurance company will bear all the expenses of your car during an accident. The premiums for First party Insurance are high.
Second Party – Second party is the part insurance company from where you are taking the policy.
Third Party – With whom you have any accident or Mishappening, it is counted inside the third party.
Suppose you are driving on the road with your car and you have a Mishappening with someone and that other person’s car gets damaged. Now in that second car, the company tells the cost of 10 lakhs and you do not have that much money at that time and you say to that person that ‘my car is also damaged with you, who will get it fixed’
Now here the Insurance Company will also recover your expenses when you have taken First Party Insurance but if you have taken only Third Party Insurance, which is Compulsory to take in India, so the insurance company will bear all the expenses of that other person’s car.
The premiums of Third Party Insurance are cheaper than those of First Party Insurance.
When a traffic policeman deducts the challan of your vehicle, then he deducts the challan of this Third Party Insurance. It does not matter to them whether you have First Party Insurance or not, all they need is Third Party Insurance.
This was a very basic knowledge related to insurance, which you must know about. Now whenever you take insurance of your car or bike, it is very important for you to understand some things, which we will now discuss one by one.
Consider These Things to Buying Car/Bike Insurance
When you buy a policy, some such things are written in it which are not immediately understood, so we are going to discuss them here.
IDV (Insured Declared Value)
IDV stands for Insured Declared Value. When you buy insurance for your car every year, then every year there is a depreciation of 10% in the value of your car and according to this value you have to pay your premium and you also get the benefit accordingly. This is what we call the Insured Declared Value i.e. IDV.
When you renew the insurance of your vehicle every year, there is a depreciation of 10% in the value of your vehicle every year. That is, if you have a car worth 10 lakhs, then in the first year your IDV will be of 10 lakhs only, but when you renew it in the second year, then its IDV will be reduced according to one year old and you will have to pay less premium but you will also get less benefits.
IDV is needed when you take a claim because at that time the insurance company checks your IDV that at the time when you took the insurance, what was the IDV value of your vehicle and according to that the company gives you benefits.
Some people make this mistake that they pay the same amount of premium as the first year in the second year also so that they can get more benefits. But when they go to take a claim from the Insurance Company, the company gives them a claim on the IDV value that comes after depreciating 10% for a year because the Insurance Company does 10% depreciation for a year and you also have to show 10% less IDV every year.
Another mistake people make is that in order to pay less premium, they take a policy through an agent who shows the IDV of your vehicle very less in front of the insurance company. Now, if the IDV is shown less, the premium will definitely come down.
Now the result is that when you go to claim, the company gives you less benefits because your IDV has been shown less.
Therefore, buy the policy only through such an agent who shows the proper IDV to the insurance company so that you can get all its benefits and for this you will have to pay the full premium.
It is important for you to understand the concept of IDV as it determines the value and benefits of your entire insurance.
NCB (No Claim Bonus)
NCB stands for No Claim Bonus. NCB is important for Motor Vehicles. When you do not take a single claim for your insurance in the whole year, then next year in Insurance Renewal you get a discount of 20% to 50% on the Basic Premium, this is what we call NCB or No Claim Bonus.
When you do not settle a single claim in your whole year, then you get a discount of 20% on your basic premium next year and if you do not take any claim in that year also, then you get NCB of 25% in the next year and next year you get NCB of 35%, then next year of 45% and next year you get NCB of up to 50%.
That’s why you must have heard this many times from people that ‘If I take the claim, my NCB will go away’. So this NCB is that if you have not taken the claim, then every year you will get discount on Basic Premium.
Buy Cheap & Best Insurance
Now as we all know that in India everyone wants cheap and best. If you want to take any policy, then today you can directly take any policy sitting at home online.
If you have a Two-Wheeler, Three-Wheeler or Four-Wheeler, then with the help of Policy Bazaar, you can get insurance of all types of vehicles done online from home. Now if you are taking a policy, then take it from a good place and it is not necessary that you take a policy through an agent and pay extra commission because today everything is available on the internet.
Car Insurance Add Ons
When you take any policy or insurance, then you get some add ons with them, which you can take by paying extra according to your need. Let’s know about these add ons-
Driver Cover
In this Add On, if your driver was driving your car and there was a Mishappening with him, then the insurance company pays Rs 1 Lakh to the nominee or his family of that driver. With this Add On, you can also help your driver and you get it along with the Insurance Policy, for which you only have to pay Rs. 50.
Passenger Cover
With this Add On, the family of the Passengers sitting in your car also gets a benefit of one lakh each during an accident and for this you have to pay Rs.50 per Passenger only.
PA Owner Driver Cover
This add on has come later than these. In this, if the owner of the vehicle was driving himself and dies due to an accident, then the Nominee or his family member of the owner of that vehicle gets Rs 15 lakh by the insurance company.
0 Depreciation
You must take this Add On. If you do not have 0 Depreciation Add On and there is a fault in your car, then you will have to pay half the money for its repair and half the money will be given by the Insurance Company, but if you have 0 Depreciation Add On, then you do not need to pay anything. The insurance company pays all the expenses.
Consumable Covers
Rubber Parts of your vehicle come inside Consumable Covers and apart from this there are many other things which come inside Consumable Parts, so this Add On is beneficial for them.
Engine Cover
The engine of your vehicle is not covered in your insurance, for this you have to take this Engine Cover Add On, in which if there is any problem in the engine of your vehicle, then the insurance company pays for it so if you have a big vehicle whose engine is very expensive, then you must take it.
Tyre Cover
With the help of this add-on, you can get your vehicle’s tires repaired by the Insurance Company.
Key Replacement
Many people believe that in Key Replacement Add On, the insurance company gives you a new key if the key of your vehicle is lost, but this is not the only thing that happens. If the key of your vehicle is lost, then the insurance company not only gives you a new key but also changes the entire lock system of your vehicle so that no one can turn it on with the old key.
This is a better Add On for the security of your vehicle which you can take.
RTI (Return to Invoice)
You must take this add on too. If your vehicle is stolen, then with the help of this Add On, the insurance company gives you the full amount for which you had purchased the vehicle.
RSA (Road Side Assistant)
If your car breaks down on the road, then with this Add On you get a Road Side Assistant, so that a mechanic comes to fix your car at the same location and if needed, they automatically take it to the Workshop. And all this expenditure is done by the Insurance Company.
Final Words:
These are some things to know before buying car insurance in India that you must be aware of. Keep these things in mind while taking any type of Motor Insurance. Second, don’t just get Third Party Insurance done for your vehicle, but also get First Party Insurance done along with it because only you are benefited in this.