As per the Indian Road Safety Act and Indian Motor Vehicles Act, it is mandatory for the car owners to purchase a car insurance policy. Car insurance can protect you from heavy and medical expenses that might occur in case of an unfortunate accident. However, many car owners overlook the importance of having a comprehensive car insurance policy and settle for a policy with a low premium cost. This could easily turn out to be a drawback in the long term as most insurance policies with low premium do not provide adequate protection cover.
Decreased car insurance premiums will fetch you a lower Insured Declared Value (IDV). IDV is the maximum sum assured fixed by the insurer in case of theft of the vehicle or its total loss due to an accident. In simpler terms, IDV is the current market value of the vehicle. Since the value of vehicle reduces with time, its IDV also decreases. The Insured Declared Value is decided upon a mutual agreement between the policyholder and the insurance provider. Therefore, a higher premium promises a higher IDV whereas lower premium amount will draw you lower IDV.
In order to pay less premium, many car owners decrease the IDV of their insurance policy. However, this isn’t a wise choice since a lower IDV will yield you a lower amount in case of theft or total loss of your vehicle. This implies that the owner would have to bear some of the loss in such an event. Therefore, it is advisable to research the policy before purchasing it.
Additionally, apart from IDV, there are several other factors that you should consider while purchasing a car insurance policy for yourself. Some of them are mentioned below:
- Try to seek a financial institution that provides a wide coverage at the most competitive premium rates.
- Opt for a personal accident cover to get adequate protection against any physical loss or disability in case of a car accident.
- Reviewing the insurance provider as well as comparing various insurance policies can help you avail the best deal.
- Depending upon your risk profile you can also consider buying add-ons for your car insurance policy. This, in turn, can provide you optimum protection in case of any mishap.
- Lastly, you must not forget to read the terms and conditions of the car insurance policy carefully before making a choice.
As a result of the increasing competition among various financial institutions in the market, availing a car insurance policy has become comparatively easier. With most of the prominent Non-Banking Financial Companies (NBFCs), you can apply for your car insurance online through a hassle-free process. Minimal documentation and easy renewal process are some of the added benefits offered by insurance providers.
Now that you are well-aware about the intricacies of purchasing a car insurance policy, ensure that you make the best choice for yourself.