A car insurance policy offers protection against damages resulting from an accident, a natural calamity, vandalism, etc. It also provides coverage for theft. The insurer from whom the policy is purchased provides monetary aid in such times. To this end, the insured individuals or the policyholders are required to pay a nominal premium at the time of purchase and each year when the policy is renewed.
According to the Motor Vehicles Act, 1988, getting one’s car insured is compulsory in India. The Act mandates every car owner to possess at least a third-party coverage that’ll pay for any third-party vehicle/property damage or third-party injuries. While the third-party cover is one of the car insurance types available in the market, the other is the comprehensive cover. A comprehensive cover offers coverage for a wide range of mishaps – natural or otherwise and theft.
Keep a clean driving record: A person’s driving history such as the number of violations made for speeding, signal jumping, not wearing one’s seat belt, etc. can be traced by the insurance company. This is one of the factors that could determine the premium payable towards the policy. A person with a bad driving history may have to pay too high a premium or may even be refused a car insurance policy altogether. Hence it is important to ensure one follows all the traffic rules and maintains a good driving record.
Opt for higher deductibles: Car insurance policyholders are often required to share the claim amount with the insurer. At the time of inception, the insured and the insurer can come to an agreement as to how much each of the parties would like to share the expenses incurred. The deductible percentage chosen by the insurer will be one of the deciding factors to set the premium amount. Hence it is beneficial to opt for a high deductible if one wishes to save on premiums.
Save the old car to gain experience: Before buying a new car, college drivers could first gain enough driving experience from their parents’ seasoned cars and then buy a new one. While one would be inclined to fix a dent on a new car, one could ignore a few dents and scratches on an old car. Further, if there is no old car at home, young drivers could consider buying a used car for the same reasons mentioned above. Young drivers are, in most cases, charged more for car insurance policies owing to the fact that they have less experience and are thus prone to more accidents. So they might as well opt for a low-maintenance car to cut down on expenditures.
Get a high coverage: Since college drivers are relatively new to the car driving arena, they should ideally avail more coverage so that expenses incurred on own car damage, injuries suffered, third-party liability, etc. are covered and won’t be a financial burden in case there is an accident.
Evaluate the policy benefits and add-ons: Before buying a car insurance policy, the prospective policy buyer should look at the coverage options available. As mentioned earlier, a comprehensive car insurance policy provides higher coverage, so it is best to go for a comprehensive cover. One should understand the benefits offered under the policy and under what conditions such benefits are offered. Also, it is a good idea to attach riders to enhance the base plan.
Check insurer history: Not all insurance companies provide the same kind of plans and benefits. Even if two identical plans are found from two different insurers, one shouldn’t blindly opt for the cheaper one but check the performance of the company over the years. The Insurance Regulatory and Development Authority of India (IRDAI) publishes a report annually. One can take a look at the report to evaluate the company’s performance based on the tables formulated on various parameters. This will help the policyholder ascertain that his/her claim will be settled without any hassles.
Don’t buy until fully trained: If a college fresher is eager to drive a car to college, he/she should first learn to drive, preferably from a driving school where driving can be monitored, and then hit the roads. A well-trained driver will be able to drive well on city roads amongst the traffic and congestion with ease and not cause any harm to external property. This way, the driver will not face issues with respect to car insurance being issued at a later point in time when he/she buys a new car.
Don’t go for a fancy car: A high-end car generally needs high-maintenance. Therefore, it is not the best idea to buy a fancy car while still being a young and inexperienced driver. A single accident and a few damages could hit hard on the pocket. Moreover, car insurance for luxury cars and cars with high cubic capacity are highly expensive.
Don’t make claims for small expenses: Claims for petty expenses that can be managed without the help of insurance should be avoided. This is because car insurance policies have the no-claim bonus feature i.e. if a policyholder makes no claim in the policy year, he/she will be given a premium rebate in the following year. So it is wise to save on a good amount of premium even if it costs a few rupees to do so.
Don’t let the policy lapse: A car insurance plan is a necessity and is hence mandated by law. After purchasing a policy, it is important for the individual to renew the policy from time to time. While regular car insurance policies are generally for a period of one year, certain multi-year policies that need to be renewed after 2-3 years are also available in the market.
On a final note, college drivers may be excited to commute by cars on a daily basis but it is important to remember that safety comes first. Hence it is advisable to keep the above-mentioned tips in mind, purchase a good and affordable car insurance policy and then hit the roads.
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