5 Essential Car Insurance Tips for Beginners

1. Check the Coverage Offered

   Consideration should be given to the coverage provided by a car insurance policy when a selection is made. Generally,  two categories are used to classify policies:

   1. Third Party Car Insurance: A mandatory requirement in India, damages caused to another person, vehicle, or property in an accident are covered by third-party insurance, but damage to one's own car is not covered.

   2. Comprehensive Car Insurance: Broader protection is provided, and third-party liabilities as well as damages to one’s own vehicle due to accidents, theft, natural disasters, or vandalism are covered by comprehensive car insurance.

      Inclusions and exclusions of the policy should always be reviewed before a decision is finalised to ensure that requirements are met.

2. Know the Difference Between Insurance Premium and Insured Declared Value (IDV)

   Understanding the difference between Insurance Premium and Insured Declared Value (IDV) is considered important when the correct automobile insurance coverage has to be chosen:

   1. Insurance Premium: The amount paid to keep a car insurance policy active is referred to as the Insurance Premium. Various factors such as car model, age, location, and selected add-ons determine the premium.

   2. Insured Declared Value (IDV): The maximum claim amount that can be received if the car is stolen or completely damaged beyond repair is represented by the Insured Declared Value (IDV). More coverage is suggested by a higher IDV, but an increase in premium may also be caused by it.

      In case a vehicle is completely lost, the correct IDV should be chosen so that sufficient compensation is received.

3. Learn about the No-Claim Bonus (NCB)

   A No Claim Bonus (NCB) is granted by the insurance company if no claims are made during the policy period.
   Here’s how it works:

   1. After the first claim-free year, a 20% discount is received on the premium.

   2. The discount increases every consecutive claim-free year, which can reach up to 50% after five years.

      To maximise these savings, it is recommended to drive cautiously and avoid making small claims that can affect NCB benefits.

4. Get Add-ons to Strengthen Your Coverage

   All potential risks might not be covered by a standard car insurance policy, which is why add-ons are offered by insurers to enhance coverage. Some valuable add-ons include:

   1. Zero Depreciation Cover: Full claim settlement without factoring in depreciation on car parts is ensured.
   2. Roadside Assistance: Emergency help in case of breakdowns or accidents is provided.
   3. Engine Protection Cover: Damages to the engine due to water ingress or oil leakage are covered.

   4. Return to Invoice Cover: The full value of your car's invoice can be collected if it is stolen or lost completely.

      While the insurance premium is increased by add-ons, they provide substantial financial protection, making them a worthwhile investment. Before add-ons are selected, evaluation of driving habits and risks should be carried out, as greater relevance may be found in some add-ons depending on individual needs. 

5. Don’t Shy Away from Voluntary Deductibles

   A deductible is the amount to be paid from one’s own pocket before the remaining claim amount is covered by the insurer. The two types included are:

   1. Compulsory Deductible: A fixed amount set by the insurer that must be paid before claim processing.

   2. Voluntary Deductible: An optional amount chosen by the policyholder to reduce the premium. As the deductible amount increases, the premium paid decreases.

      Money can be saved on car insurance policies by opting for a voluntary deductible, especially by those considered to be cautious drivers with a low risk of claims. However, care should be taken to ensure that any selected deductible is affordable in the case of a claim.

Read this blog to know more: Compulsory Vs Voluntary Deductible in Car Insurance

When these important vehicle insurance guidelines are known, the correct policy can be picked, cost savings can be achieved, and sufficient coverage can be ensured. Policies should always be compared, needs should be assessed, and terms should be read carefully before a decision is made. 

For those looking for a reliable car insurance provider, SBI General Insurance is known to offer comprehensive plans tailored to different needs. Hassle-free claim settlement, extensive add-ons, and competitive premiums are provided by SBI General Insurance to ensure the best protection for vehicles.

Disclaimer: This blog is intended solely for educational and informational purposes. The content may include outdated information regarding the topic discussed. Readers are encouraged to confirm the accuracy and relevance of the data before making any significant decisions. SBI General Insurance disclaims responsibility for any errors or consequences arising from the use of outdated information provided herein.