Those who are not aware about the concept of insurance might find car insurance a bit difficult to understand. Some people take it as an investment. Car insurance is not exactly an investment because it does not yield returns like a fixed deposit or a mutual fund. However, it is an important part of your financial plan as it prevents financial losses in cases like a car accident.
What Does Car Insurance Actually Mean ?
Car insurance is based on the simple concept of risk sharing. You pay a premium to an insurance company which promises to pay for the car repairs as per the terms and conditions of the policy.
The following sections will help you to understand important points about car insurance and act as a guide to buy best comprehensive car insurance or zero depreciation car insurance online. Also check out the frequently asked questions section related to car policy.
Importance Of Car Insurance
A Comprehensive car insurance policy is important from two standpoints – legal compliance and financial safety. A Comprehensive policy includes the mandatory third-party cover and it offers Own Damage cover as well. This way, you comply with the law of the land which says that all cars plying on Indian public roads must be insured with a Third-party Liability policy. Apart from fulfilling the legal obligation, you also get the insurance coverage of Own Damage. This means, your car will be insured against unexpected events such as fire, damage due to flooding, theft, etc.
Nowadays, the cost of repairing even a minor car damage is on the higher side, without proper insurance coverage, you will have to spend a lot to repair your damaged car. Besides, car insurance companies offer extra services such as free pick up and drop, cashless claims settlement, etc, to make your insurance experience hassle-free.
Understanding the Features of a Car Insurance Policy
- LIABILITY : If you happen to injure a person walking on the street while driving your car or if you damage someone’s property while driving your car, you are liable to compensate the person for the damage. Third-party car insurance cover insures you against this liability.
- OWN DAMAGE : There are numerous ways in which your car can get damaged. It can get damaged due to a fire accident, a tree can fall on it, its engine can get affected due to water logging, so on and so forth. Repairing a damaged car is an expensive affair and a car insurance policy can protect you from spending your hard-earned money on car repairs. The insurance companies will get your car repaired as per the terms and conditions.
- PERSONAL ACCIDENT : A car insurance policy also comes with a Personal Accident Cover. This means that if you suffer permanent disability while driving your car the insurance company will offer you compensation as per its terms and conditions.
- SERVICES : Apart from providing the cover, insurance companies also offer some extra features. Digital insurers are ahead of their traditional counterparts in this regard. You can purchase a policy within minutes from a digital insurer. Their claims settlement team is highly responsive as well.
- ADD-ONS : You can strengthen your Comprehensive car insurance cover by purchasing Add-ons. Add-ons are additional coverages that offer an extra layer of insurance for a premium. Note that you can only opt for Add-ons with a Comprehensive policy and not with a basic Third-party Liability policy.
Benefits of Buying Car Insurance Policy Online
A decade ago, it would have been okay for people to be apprehensive about purchasing car insurance online. However, things have changed drastically in the recent past. The financial services sector has changed for the better with the advent of the digital era.
Nowadays, almost all financial services can be availed online. Car insurance is not far behind. Now, you can insure your car within two minutes by going online. Some people might be used to the traditional way of insuring their car but change is the only constant. If those people also try this new way of insuring their vehicle, chances are bright that they might also find it convenient. Read ahead to know the major benefits of insuring your car online.
- Legal Compliance : You will be complying with the law of the land by insuring your car with a Third-party car insurance cover. You will be safeguarded from penalties and legal issues arising due to non-compliance.
- Easy Comparison : If you look at the traditional way of purchasing a car insurance policy, the first step of researching and comparing policies itself is a tedious one. Imagine going around one company’s office to another for quotes. An agent can do that for you but trusting an agent to be unbiased and completely transparent is also challenging. Alternatively, you can compare car insurance policies online easily. You can read and understand the features of the policies, compare their quotes, and make an informed decision while buying the policy online.
- Right Deal : Comparing and buying car insurance online will result in you getting the best deal with respect to the insurance cover, premium, and the services. You have to make sure that you are comparing similar policies. For example, compare Comprehensive plan plus an Add-on with a similar cover offered by a different insurer to make the right analysis and get the best deal.
- No Paperwork : A lot of people find form-filling quite a hassle. In the online set up, you do not have to submit hand-filled forms and a bunch of supporting documents. All you have to do is fill a short online form as a part of the purchase journey and you will be through to the purchase button. That’s all, no paperwork.
- Convenience : While buying car insurance online, you will have the convenience of purchasing it when you want to. You can also purchase it from where you want to. For example, you can simply use your smartphone to purchase car insurance on Saturday night. Buying car insurance online is a convenient option as compared to purchasing it from an agent or an insurance company’s branch office.
- Quick Receipt of Policy : In the online process, you receive your car insurance policy instantly. Your car insurance policy is delivered in your registered email id’s inbox almost immediately after the payment is processed.
- Credible Insurer Check : You can check the credibility of your car insurance providing company with the help of a simple search in Google. Going through their social media handles will also give you an idea about the company’s credibility.
- Valid Policy : Policies purchased online from certified insurance companies are completely valid policies. You might be cheated by an agent but it is hard to be cheated if you purchase the car insurance policy directly from the certified insurance company’s website.
- Easy to Understand and Buy Online : Buying car insurance online is not complex. You do not require the expertise of a professional to do so. If you feel you need some clarification, you can go through the Policy Wordings or connect with the insurance company via call or email to get your issues resolved.
How to Calculate Car Insurance Premium Cost
Car insurance premium depends on a lot of factors. Your car’s make and model, the location where you will be driving the car, the vehicle’s age, the kind of policy chosen, number of Add-ons selected, etc. play a role in determining the vehicle’s insurance premium.
For example, a five year old Wagon R with a Comprehensive plan and no Add-ons driven in New York will have a different premium than a three year old Wagon R with Add-ons driven in California. The premium also depends on crucial factors like the vehicle’s Insured Declared Value (IDV), Voluntary Deductible and No Claim Bonus (while renewing).
While purchasing car insurance online, you do not have to calculate the premium yourself, the insurance company’s website will do it for you. You just have to answer the simple questions asked during the purchase journey and you will come to know the car insurance premium within minutes.