We only have to deal with the insurance policies once a year, while paying the premium. Though that increases the chances of forgetting the same, you must give it the same importance that you give to other yearly events. We plan well in advance for our birthdays or anniversaries, insurance are equally important if not more. Since it is a yearly event, you can spend a few hours or days to zero down on car insurance.
However, it is easier said than done. There are a lot of factors and possibilities that one must think over before buying insurance. Difficult as it may seem, it certainly is not impossible. If you follow some of the following steps and consider buying car insurance seriously, it can actually be fun.
Protect Your Investment with the Right Car Insurance Policy
Unlike some other insurance policies, a car insurance policy does not have too many varieties. There are just two primary types of car insurance that you can buy, the first one being the third party liability and the other one the comprehensive insurance.
- Third Party Liability
Third party liability insurance covers the expenses that arise due to injury, death or damages to a third party. You and your insurer comprise of the first and second party. If anyone else is involved in an accident, the third party liability will take care of it. Some common examples of the third party can be a pedestrian walking on the sidewalk or any damages that you cause to the property of someone else. The same also holds well if the damage or injury is to someone in another car.
This is the most basic form of insurance and it mandated by the law. Third party liability is regulated by the IRDAI and the body decides the premium prices for the policy. However, what you need to keep in mind is that the policy does not cover any damages to your car.
- Comprehensive Insurance
Comprehensive car insurance takes the base of third party liability and builds on the top of that. You get all the benefits of third party liability and get cover against scenarios such as car theft or damages to your car. Sure, it costs a bit more than a vanilla third party insurance but you get so much more for that additional sum. A comprehensive insurance keeps your car safe against extreme cases such as vandalism, riots, natural calamities etc. If you are considering renewing your car insurance, it is advisable to opt for comprehensive car insurance.
Know What You Need To Know About Car Insurance
Now that we are aware of the different types of insurance, let’s shift our focus to knowing what all factors work in tandem to bring up the insurance premium.
- Driver Details
Insurers briefly take a look at the age of the driver as well as their profession before deciding on the insurance premium. If an insurance policy has multiple drivers associated with it, the prices will go up.
- Location Details
Another factor that insurers keep a close eye on is the location of your residence. If you stay in an area that is prone to theft, the insurance premiums will most likely go up. It would also go up if you reside in an urban area or highly populated area or near highways.
- Claims Details
If you have had a claim free year before choosing another insurer, you will have a smoother experience. However, if you have claimed the policy in the previous term, the prices are more likely to go up.
- Vehicle Details
The insurance premium depends on a variety of factors related to a car such as its engine capacity, car category, manufacturer or even fuel type. For starters, diesel vehicles fetch higher insurance premium than their petrol counterparts. The IDV or Insured Declared Value of the car is a core component on which insurance premiums are dependent. As a policy holder you have the control of deciding the same. You can reduce the IDV for a lower insurance premium, but it is highly not recommended. A lower IDV might have a negative impact down the line for you.