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3 things to keep in mind while you purchase a Car Insurance Policy
3 things to keep in mind while you purchase a Car Insurance Policy
Jul 29, 2011 | 1244 VIEWS

Everyone who owns a car has a Car Insurance Policy and that is because it has been mandated by the Indian Government. However, how many of us are even aware of the facilities that our Car Insurance policies give us? While renewing our policies, the only thing that bothers us is the premium amount! The insurer who provides the least quotation bags the policy! But do you even know how they calculate the premium and how is some insurer providing lesser premium than the others?

Well, I got to know about it last week when my car insurance policy was due its renewal. I checked with Tata AIG, Chola MS, ICICI Lombard, Reliance, etc. to get the least quotation for my 3 year old car. The first 2 years I had renewed the insurance policy which my dealer had provided, without even bothering to check the details of the policy. last year I had shifted company only because my cousin had joined that company and insisted that I buy their policy, again without knowing the terms and conditions of the same.

However, this year, when I got the quotations of various insurers, I was confused because some insurance companies were offering a very low amount than the one I already have. For example, for my 3 year old Wagon R VXi I got a quotation of about Rs 4500 from 2 insurance companies, which were almost Rs 1000 less than the one I had bought from my cousin. I checked the Car Insurance policies that can also be purchased online for details as well. But my obvious reaction was to call up my cousin and check for clarifications, which I did. She didn’t know how to defend her company policy and kept giving me the USPs of the policies. That is when I wanted to know what queries others also have while purchasing a Car Insurance Policy. While going through their detailed quote, I found the catch!

What the other insurance companies had done is that the value of my car had been depreciated by almost 40% to reach a low premium amount. No wonder their premium amount is about Rs 1000 less than the one I had bought from my cousin. That’s when I realized the importance of checking out the features without blindly taking a car insurance policy.

3 Most important things to keep in mind while purchasing a Car insurance Policy:

1. The value of your car: If your car is valued at a very less amount, then the insurance premium would be less but the very purpose of having an insurance policy is defeated. It would pinch you in case you have to make a claim.

2. The garages which offer cashless facility: It is very important that you are aware of the garages where you can give your car for repair that are associated with your insurance policy. Else it would be very difficult if the claim amount is large as initially you would have to pay it from your pocket and then claim for a reimbursement!

3. Claim Procedure, i.e. whom to contact when you have to settle your claim and what is the basic procedure. This information is important because each company has their own timeframes within which claim has to be filed and sometimes motor documents like Motor Collision Report, etc. from the nearest police station is required.

Hence do ensure that you check your policy details before you renew your existing one or buy a fresh one. It helps either ways!

Deepak Yohannan
Deepak Yohannan is the CEO of MyInsuranceClub. He enjoys writing on Personal Finance and contributes regularly on sites like Reuters & Moneycontrol. He is a strong proponent of online insurance and is often found pointlessly babbling about it!

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