Undertaking the process of selecting and purchasing one’s car insurance is one task that every individual finds loathsome, yet necessary. Car insurance today has become an extremely complex process, with the distinct types of policies available at various amounts of premium, leaving every person who opts for it confused to the point where they end up making an incorrect or false decision. To prevent such grave mishaps from happening, below are a few basic tips that any person must keep in mind before venturing out into the car insurance market.
1. Know the Insurance Terminology
Before even considering investing in car insurance, to be able to do in-depth research, the customer must be completely aware of the ‘whats,’ whys’ and ‘hows.’ A person must not find themselves bewildered when coming across certain specifications or terms, to ensure that they make a sound decision. Following are a few terms that one might come across while purchasing car insurance, that are simplified to be able to have a stronger grasp on the subject.
Premium
This is one word in any type of insurance that shall be used in abundance, hence it would be best to get acquainted with it. An insurance premium is the amount of money that will be paid by a person, business, or firm investing in an insurance policy. The amount of the premium varies based on multiple factors such as the type of policy, the duration, and so on. This amount can be paid altogether, however, most individuals avail the option of paying half-yearly, quarterly, or even monthly. If the insured fails to pay this amount then the insurance company has the power to cancel the policy as well.
IDV (Insured Declared Value)
The Insured Declared Value of a car which is generally referred to as IDV is essentially the current market value of a car. It is the amount of money an insurance company will be paying their insured customer in case the vehicle has been damaged beyond repair, or stolen altogether. The IDV of any particular car changes along with factors such as time and the type of handling. If a particular car is purchased today at the price of Rs. 10 Lakhs, then within three years the average value of the car will become Rs. 7 Lakhs due to the natural damage caused through normal usage. IDV is important when considering one’s car insurance because it is one of the determining factors that decide the cost of the premium for the insurance.
Cashless Car Insurance
This is an added benefit in any car insurance policy, having cashless car insurance simply means that the person holding the policy is not required to pay anything at the time of repair of the vehicle. This is possible when the policy chosen has a wide network of garages that they are already in contact with, availing the insured of the benefit of not having to spend their money immediately for the settlement of claims. This facility additionally aids the insured by not having to scavenge for money in an emergency situation.
Voluntary Deductible
Voluntary Deductibles in a car insurance policy refer to the sum of the amount that the insured policyholder is voluntarily willing to pay before submitting the insurance claim for the damages incurred on their vehicle. This principally means that the insurance company and the insured will be sharing the cost that is to be paid for repairs of the vehicle. Voluntary deductibles are suitable for people who are capable enough to possess the money in case of an unlikely accident, additionally, this reduces the total cost of the insurance premium of the car.
2. Do Not Settle on a Cheaper Premium Only to Save a Few Bucks
Finding a cheaper alternative is always a necessary skill, however, while exploring the options for your car insurance this ability better be kept aside. There are numerous risk factors when it comes to opting for low-priced insurance, some of those include,
Higher Deductibles
The car owner will have to spend a high sum while claiming their insurance, which will incur an unnecessary burden on the policyholder’s mind, as they will also be dealing with the strain of the accident or theft. Hence, it is crucial to inspect the deductible cost while opting for insurance, especially when it is low-priced.
Impacts Policy Coverage
The cost of premiums is almost always directly related to the level of policy coverage. If one were to pay an exceptional amount of premium, their policy coverage would be superior as well. An inexpensive insurance policy provides only basic coverage, which is generally the third-party insurance plan, which only covers harm or injuries incurred by the third party involved in the incident, personal expenses are managed by the policyholder separately.
Strips You of Good Customer Service
One might assume that customer service is a given benefit, no matter the cost of their insurance. However, in the insurance market, there’s a price on everything. With a lower-priced policy, the chances of receiving adequate customer service are also lowered.
Thus, even though at first the low-cost car insurance might seem to be easy on the wallet, in the long run, it shall turn out to be even much overpriced, so choose wisely.
3. Always Explore and Compare All Possible Options
When initiating any kind of purchase, the first step is to unfailingly traverse through all the possible available alternatives. The car insurance industry is growing at a fast pace, bringing in new brands that offer various benefits at different prices. As a buyer, it is essential to be mindful of securing a decent deal with adequate policy terms and benefits that it provides.
Obtaining car insurance online will contribute to the added benefit of exploring multiple options all at the same time from one place. Additionally, insurance seekers need to be wary of their comparing methods. Do not plainly compare one policy to another without a set criteria, confirm that the offers being compared are for policies providing equivalent coverages to be able to have a better understanding of the correct options securable for your car’s insurance.
Another aspect to be conscious of is to keep in mind that with the emergence of multiple online brands and platforms, there is a risk of fraudulent websites or applications. Habitually inspect the apps or websites through ratings or reviews available on the internet, or opt for peer recommended platforms.
4. Examine the Quality of Service Provided
An insurance buyer can judge the future of their insurance journey with a particular brand or company by analyzing the customer service that the insurer provides. Having poor customer service can turn out to be quite the hassle in the long run, hence ensure through online reviews regarding the type of service being provided by the company you plan to choose.
It must be understood, that any brand must be able to prioritize the customer and their needs no matter what. Rude or un-friendly customer service providers, are always a big no and hence, should be avoided and not neglected as the company’s service quotient shall be high constantly. A policyholder’s overall experience would be remarkably affected based on adequate or cheap customer service.
5. Car Modifications
Lastly, these are certain essential details that an insurance company might conveniently fail to specify. Policy buyers might assume that by mentioning the modifications done to their vehicle, the price of the insurance would also hike up. This is because the insurance policy believes that modifications made to the factory model of the car, also increase the risk of accidents or thefts to the vehicle. Therefore, policy buyers do not disclose information regarding modifications.
However, this is a faulty decision, because, if the vehicle were to meet with an accident that damages the modified wheels or theft of externally installed upgrades, the insurance company shall completely refuse to cover the necessary charges as the damage incurred on the modified parts is not a part of the buyer’s insurance policy.
In conclusion, these are certain basic aspects that every first-time buyer fails to realize, hence it is necessary to make a safe and sound decision while availing of one’s car insurance as it has significant impacts on a person’s livelihood, financially, physically, and also mentally.
