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How to choose the best Car Insurance & Save Money

A motor insurance policy, unlike any other form of insurance policy, is a compulsory insurance policy which is required on every vehicle operating on roads. So, whether you own a two-wheeler or a car, whether you have commercial vehicles or personal ones, you need to have a valid motor insurance policy on every vehicle you own if you intend to use it. Any insurance you buy for your two-wheeler falls under the category of a two-wheeler insurance policy and any insurance on a four-wheeler falls under the category of a car insurance policy. This mandatory insurance cover, whether a two-wheeler cover or car insurance, is so mandated by the Motor Vehicles Act which is the governing act on motor vehicles of all kinds.

Due to this mandatory motor insurance policy clause, general insurance companies offer various types of motor insurance policies for insuring your vehicles. Two-wheeler insurance plans, car insurance, third party insurance, commercial vehicle insurance, etc. are the major types of motor insurance policies offered by insurance companies. Today, we are dealing with the concept of a car insurance policy and how to select the best car insurance policy.

Selecting the best car insurance policy is a matter of comparison between the different available policies based on their features and selection of the plan which has the best in-class features. Before we discuss car insurance comparison, we must first understand the concept and basic features of car insurance policy.

What is car insurance?

Act only policy, commonly referred to as third party insurance as it covers damage or harm caused to third parties other than the insured. It is compulsory to take this cover.

What are the types of a car insurance policy?

A car insurance policy can be of two types – a third party liability only policy and a comprehensive package policy.

Third Party Liability Only Policy – this policy is also called Act only policy as it is mandated by the Motor Vehicles Act. This policy only covers any damages which are caused to a third party or property. The damages include any sort of bodily harm or injury caused to any third person (i.e. a person other than the car and the car’s owner) and also any sort of damage caused to the surrounding property. These policies do not cover damages or losses incurred by the car or the car owner. The premium for these policies is fixed depending on the engine capacity of the car and it is uniform.

Comprehensive Package Policy – also called a bundle policy, package policy or a comprehensive cover, this policy provides dual coverage. It covers the mandatory third party liability and also provides coverage for any damage incurred on the car and its owner. This additional coverage is also called ‘own damage’ cover. Premiums are based on the insurer’s pricing policy and they comprise of two parts. One part of the premium is for the third party liability coverage while the other part is for the ‘own damage’ coverage. While the first part is fixed, own damage premium depends on the Insured Declared Value (IDV) of the car. The IDV of the car is the current market value of the car after depreciation. The calculation of the car’s IDV varies from one insurer to another and so the premium rates of comprehensive plans also vary across insurers.

So, these are the two types of car insurance plans which are available in the market. Now you know the basic difference between the two plans and wouldn’t be confused when you compare the available plans against each other.

How to compare car insurance policies?

It is true that the market is flooded with various car insurance plans being offered by multiple general insurance companies. As such, it becomes mandatory to compare the available car insurance plans and settle on the plan which offers the best benefits and is also competitively priced. To conduct a fair car insurance comparison of the available car insurance plans, a good knowhow of the different features of such plans is essential. So, here are some pointers which would guide you about how to compare the various car insurance plans and find the best vehicle insurance policy:

What are the types of a car insurance policy?

A car insurance policy can be of two types – a third party liability only policy and a comprehensive package policy.

Shortlist the type of coverage you are comparing – as stated before, a car insurance policy comes in two variants – third party liability only policy and comprehensive package policy. So, before you set on the course of comparing the different car insurance plans, ascertain which type of coverage you would require. A third party policy is cheaper compared to a comprehensive one but the coverage extended by the latter is undoubtedly the best. So, though a comprehensive package policy is the best and the safest bet assess your requirements and settle on the type of variant you would require.

Compare the Insured Declared Value offered by the insurer – the Insured Declared Value, also called IDV in short, is the current value of the car after being adjusted for appropriate depreciation. The rate of depreciation is listed by the Insurance Regulatory Development Company and depends on the age of your car. Older the car, higher would be the depreciation and lower would be your Insured Declared Value. This value represents the Sum Assured for your However, when you compare the different IDV’s offered by the insurers for your same car, you would find varying values. This is the reason car insurance comparison becomes necessary as different IDV’s also reflect different rates of premiums. So, first and foremost, you should compare the Insured Declared Values quoted by different plans and then make a selection of the plan. A tip- always invest in a plan which has the highest Insured Declared Value so that you enjoy the maximum coverage. This would be helpful in case of a total loss of your car when the entire IDV is payable.

Coverage options – while a third party liability policy has a uniform coverage, the coverage features differ in case of a comprehensive or package policy. Besides covering the third party liability, a comprehensive policy also provides coverage for damages to the car and the owner (who is also the policyholder). The coverage for the owner is the Personal Accident coverage whose coverage limit varies across different plans. Moreover, extra additional coverages are also extended by some car insurance plans. Thus, one should check this coverage feature to determine the amount of personal accidental cover provided and also any extra coverage, if provided by the plans under consideration.

Compare car insurance quotes – premium rates of comprehensive car insurance policies vary as they depend on the Insured Declared Value of the car estimated by an insurer which also varies. Since you spend your hard-earned money on the premium amount, comparing the premium quotes is a must. But remember; don’t always be influenced by the premium quote. Look at the Insured Declared Value too and settle for a plan which provides the highest Insured Declared Value even if the premium rate increases .

Available riders – a car insurance policy can be customized to enhance the protection it offers by way of adding riders to the available policy. Riders are additional protection clauses which enhance the scope of coverage. Riders like Engine Protection rider, Zero Depreciation Cover, Collision Cover, etc. are very beneficial in terms of the coverage they provide. So, compare which riders are available under different plans and the plan which has the option of multiple riders is better as it offers us a choice of selecting the best rider as per our coverage requirements.

Insurer’s claim settlement practice – the true test of the best car insurance policy is the ease with which claims are settled by the insurance company offering the said policy. We do not like the unnecessary harassment at the time of claim settlement and so it is prudent to know the claim settlement process and ease of any car insurance policy which you are intending to invest in. every insurer has a different set of rules when it comes to claim settlement and such rules should be compared to find out which set of rules is the easiest and would enable a faster claim settlement.

Comparing between the different car insurance policies to get the best car insurance plan for you is always recommended if you want to get your money’s worth. Comparing has also been simplified through our website where we offer assistance for you so that you can compare all the car insurance plans easily and find the best one for yourself and also compare car insurance quotes online.

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