One of the most expensive mistakes that many of us make – and only learn about the hard way – is our ignorance about car insurance.
You see, buying, owning and driving a car is the stuff of dreams for most of us, but maintaining it is something that we realise only after the initial honeymoon is over. And some of the most common mistakes that one can make regarding car ownership is buying the wrong insurance policy, valuing their vehicle incorrectly, or horror of horrors, forgetting to renew it. So, to help you avoid making any of these mistakes, here’s a handy guide about what to look out for when buying insurance for your car or bike.
Check your IDV (Insurance declared value): A common mistake is to compare different insurance policies based solely on the premium one is paying for it. But, that can be quite misleading at times, as insurance vendors will often undervalue the car to reduce the premium of the policy in a bid to secure the customer’s business. This can be damaging to the vehicle owner in multiple ways – say if the vehicle meets with a serious accident or is stolen, the insurance company will only pay you the value of the car mentioned in the insurance policy (its IDV). Therefore, always be sure to insure your vehicle at the correct IDV, depending on its age and market value. Of course, this can be a tricky process, but the folks at Coverfox have made it easier with their insurance premium and IDV calculator that can be found at this link. So, to understand the ideal IDV value of your vehicle, and to get the best competitive quotes for insurance, visit the Coverfox website and get the details in a few simple steps.
Comprehensive Insurance vs Third-Party Insurance: A common confusion when choosing an insurance policy, especially in older vehicles, is the battle between a comprehensive and third-party policy. Legally, both policies satisfy your insurance needs in India (you are legally required to have at least third-party insurance for your vehicle), but there can often be a large price difference between the two, with third-party insurance policies being significantly cheaper. However, the reduction in price comes with a reason, and, as its name states, a third-party policy covers damage caused to a third-party or property by your vehicle. It does not cover any damage to your vehicle, nor does it cover theft. So, if you have a third-party policy and your vehicle meets with an accident or a theft occurs, the insurance company is not going to pay you anything. However, in the case of comprehensive insurance the insurance policy covers damage not only to other vehicles or persons, but also to your own vehicle – as well as theft. This is why comprehensive policies are more expensive than third-party policies, but are well worth the extra cost. Given that you’re covered for most common occurrences – accidents, theft, flood, fire, etc. – a comprehensive policy provides the piece of mind that if something happens to your vehicle, the insurance will protect you financially and take care of most of the expenses.
Zero-dep policies: However, with the opening up of the insurance sector in India, there are more types of policies available, such as zero depreciation policies that are becoming increasingly popular. Unlike older policies where you had to pay depreciation on metal parts depending on the vehicle’s age, and a flat 50% of the cost of the plastic parts when your vehicle went under repairs, you have to pay none of those charges in zero depreciation policies. While a zero dep policy cost a little bit more than a comprehensive policy, given its benefit in the long term, the added cost is totally worth it. And, more importantly, in case of a big accident or a theft, you have the peace of mind of knowing that your wallet will take a minimal hit, as the insurance company will cover virtually all the expenses with the exception of minimal fees.
Protect yourself further: Given our road conditions, it’s important to protect your vehicle even further – especially if you’ve bought a top of the line luxury automobile. A popular choice among many luxury and high-end vehicle owners is protection against Hydrostatic Lock and Tyre Damage, both common instances on our roads – especially in the monsoon season, where we see cars stranded on waterlogged roads with water having entered the engine and destroyed it. With a policy that covers Hydrostatic Lock (regular insurance policies treat water entering the engine as user negligence, and hence repairs are not covered under insurance) you have the peace of mind of knowing that even if the vehicle’s engine picks up damage due to Hydrostatic Lock, the insurance will cover the damages, which otherwise can be a significant shock to your bank account.
Don’t forget to renew on time: And most importantly, avoid the most common mistakes that people all over the world make when it comes to insurance policies, forgetting to renew it on time. Not renewing your insurance policy means that in case any damage or theft happens when the vehicle is not covered, the entire damage has to be borne by you personally and that can be a huge burden, especially if you have a bank loan running against the purchase of the vehicle. So, be smart, set up as many alarms and reminders as you need, and don’t forget to find yourself a great deal on insurance policies today at www.coverfox.com.