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How to Compare Car Insurance Effectively to Save on Premium amount?

Article by – Arya T.N

If you are a car owner, then car insurance policy would be something you would be keenly aware of. Or even if you intend to buy a new car, you must be knowing that a car insurance policy is mandatory. If you are thinking of buying a new policy or migrating your old insurance policy to a new company, you might be often confused as to which company you should opt for.

Here is a complete guide to comparing car insurance policies effectively so you can save on premium amounts.

What is a car insurance policy?

A car insurance policy is an agreement between you, the insured, and the insurance company. In this agreement, the insurance company will provide you with an amount if you get into an accident, causing injury to somebody else, or damage to someone else’s property or vehicle. Depending on the policy you have taken, you will also be covered for damages caused to your own car. This amount is given in lieu of the premium you have to pay.

What are the modes by which you can buy an insurance policy?

There are three ways to buy an insurance policy.

  1. Get an insurance policy online – You can easily buy an insurance policy online. All the major and new insurance companies have the facility for purchasing the policy online. You will just have to provide them with the necessary information and complete the payment online. Your policy details will be e-mailed to you. You can similarly renew your policy online.
  2. Getting the policy directly from the office – Most insurance companies would have physical offices in selected locations. You can walk into these offices with the required documents and get the policy.
  3. Getting a policy through an agent – Many insurance agents act as middlemen between the company and the user. You can submit the documents with these agents, and they will do all the work for you. This process would cost extra since you will have to pay the charges for the insurance agent.

Which is the ideal mode of buying an insurance policy to maximise your savings?

Buying your car insurance policy online would be the best way to save money. In online mode, you can compare the prices with various other competitors and choose the best one. Most insurance companies offer attractive discounts and offers. You can leverage these to your benefit.

Is it a good idea to compare car insurance policies before buying?

It is always best to compare car insurance online from multiple companies before locking in on one. Different companies offer different insurance amounts(IDV) for the premium paid. But do not always opt for cheaper premiums. They might have other pitfalls. Read through terms and conditions of each policy, compare the insurance amount to the premium ratio, look at the different add-ons provided, the customer service and the claim settlement ratio. Weigh in your requirements with what the policy offers and then finalise on one.

What factors must you consider when comparing car insurance policies online?

To help you better narrow down the right policy, keep an eye out for the following factors :

 

  • Premium amount – Even though we might lean towards a cheaper premium, it is best to not always opt for them. Cheaper premium means the company might be making up for it in other departments. Hence opt for an affordable policy that has your requirements covered rather than a cheaper policy that will be pointless in case you get in an accident.
  • Types of insurance policy – You can either opt for a third-party insurance policy or a comprehensive insurance policy that offers full coverage. Opt for either of them depending on your driving skill level. If you are a confident pro driver, then you can opt for third-party insurance. However, the comprehensive insurance policy would be the ideal choice since it offers complete protection. This will give you peace of mind.
  • IDV to Premium ratio – The IDV amount is the amount for which you insure your vehicle. It must be sufficient enough to cover for the damages in case your vehicle gets completely destroyed. The premium you pay must be justifiable for the IDV amount you get.
  • Add-ons available – You can further extend the coverage of your policy with additional features such as add-ons. Different companies offer different types of add-ons. Choose the one that best suits your requirements.
  • No Claim Bonus – Make sure your shortlisted insurance companies offer good No Claim Bonus rewards. NCB is the bonus you get for not filing a claim with the company. The longer you go without claiming, the higher will be your NCB.
  • Cashless facility – If the company has an extensive network of garages where they offer cashless facilities, then they will directly pay on your behalf for the repairs of your vehicle. The wider the network of garages, the lesser hassle you will have. Otherwise, you will have to get your vehicle repaired first by paying from your own pockets, get the necessary documents, submit it with the company and then get the amount reimbursed.
  • Claim settlement ratio – Claim settlement ratio is the number of claims accepted to the total number of claims submitted to the insurance company. The higher the ratio, the better the chances of your claim getting accepted. Opt for a company that has a high claim settlement ratio.
  • 24×7 Customer care facility – You cannot predict when mishaps can happen. It’s best to choose a company that has a 24×7 customer care facility so that you can call them up even in the middle of the night for any issues. In other scenarios such as if you get locked out of your car, or your car breaks down at odd hours, having a good customer care facility will alleviate your problems sooner.

 

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