Factors to Consider while Buying a Car Insurance
Taking a Car Insurance is mandatory according to The Motor Vehicles Act, 1988. It is necessary for car owners to have a Third-Party Insurance, atleast. A Third-Party Car Insurance helps in financially covering losses and damages caused to a third party’s property or if the person suffered injury or death.
Apart from the mandate issued, many people buy Car Insurance for other purposes as well. People buy insurance according to their requirements and the market provides us with a number of options to choose from. To name some:
- Comprehensive Car Insurance- It covers both third-party insurance and own damage insurance.
- Uninsured Motorist Coverage- It is an insurance to protect you if there is an accident with an at-fault driver who does not carry liability insurance.
- Personal Injury Coverage- It covers expenses such as medical bills, lost wages or funeral costs after an accident.
- Collision Coverage- It covers your car against accidental collisions, with another vehicle or fixed structures or in case another car rams into your car while it is parked.
The list does not end here. There are different permutations and combinations of options for car insurance which might get the Insuree perplexed.
An Insurance plan will get changed if any of the factors in it gets changed, for example: Brand of the Car, type of Insurance, Features you are looking for in the insurance or IDV value of the car, etc. So what are the things that an Insuree should consider before opting for a plan? Here’s what they should consider:
Claim Settlement Ratio
It is number of claims paid to consumers to the total number of claims received by the company. This is a ratio which does not go unnoticed by most of the Insuree’s, as they look for their chances of getting their claim. This ratio plays a pivotal role in selection of a Car Insurance for most of the Insurees.
Government/ Private Insurance Company
The entity from which insurance is being taken is also given importance as, both, Public and Private Entities have their own pros and cons in the end. To give an example, in the case of a Private Company, they are agile, quick, innovate on newer products and features constantly, whereas in a Public Company, they play catch up and take time to reach the same level as that of a Private company. So an Insuree, in this case, to take the most benefit would take car insurance from a Private Company. On the other hand the chances of liquidation of an insurance company is low in case of a Public Company as it is backed by the Government.
Company’s tie up with Service centres
Different Insurance companies have different number of coverage in terms of tie ups with service centres. So, if a person has a car of brand ‘X’ and he has to choose between 2 companies, one of them having more tie ups with brand X’s service centre. The person should choose the brand with more tie-ups because it helps the insurance company to complete the process in a short span of time.
Claim Settlement Process
No one wants to wait for a long time till their car is taken care of, everyone wants the waiting window to be as short as possible and for that to happen the Insurance Company needs to be effective in its process. It goes without saying, a short duration of time is desirable without the quality of work being hampered.
Today everything happens with a touch of a button and an online process is the future for making Claim settlement process effortless. Many companies have recognised it and have their process going, they are also developing in this field everyday to give the Insuree, the best user experience.
It’s a facility for the Insuree which makes the whole process hassle free. The Insuree can directly visit the service centre with which the insurance company is tied up and could get the car fixed without paying any amount to the service centre as the insurance company directly settles the repair bill.
A Good Agent
An agent helps in making the right choice of insurance plan which would be the best fit as per an Insuree’s needs. In return saving time, effort, riskiness of choosing a wrong insurance plan and money of the Insuree.
We should look for reviews of other customers for the services provided by the company and at the same time consider the financial stability or soundness of the company. We should compare it with other Insurance companies and see what features it has or does not have in it.
We as customers of insurance companies love all the offers and discounts we get attached to their insurance plans. Offers like: free car washes, alignment of the car, tool kits, medical kits, etc are the types which are given by various car insurance companies. It should be a consideration while buying a car insurance as these offers and discounts hold value to the Insurees as this might help in choosing an insurance plan, i.e. to differentiate between 2 or more plans on the basis of this feature.
We as Insureee’s of an insurance should be aware of where we are spending our money. All the expenses involved in this contract should be made transparent by the company so that an Insuree could take an informed decision of buying an insurance from the market.
The list can go on as the things to consider might change for specific cases but these are the major 10 things an Insuree should consider before buying a Car Insurance in India, which we have covered above.
As said earlier taking a car insurance is a prudent decision, because it would reduce the liability of the insuree. Taking these 10 things under consideration would help an Insuree take the right type of policy in the market.