To legally operate a vehicle in India, you must have at least third-party liability insurance. So, everybody who owns a car in India has insurance. But, we do not always understand all the terms and conditions of our car insurance policies. Here is a look at some crucial things you should know before buying or renewing your motor insurance policy.
1. Cashless Claims Require Some Exchange of Money
Sorry to disappoint you, but a cashless claim isn't entirely cashless. Firstly, you must understand that your four-wheeler insurance company will only look after the cost of covered damages. You cannot seek a claim against the regular wear and tear of your vehicle. Additionally, there is a 5 or 10% mandatory co-pay that you have to fulfil. So, while your car insurance provider will settle your cashless claims with ease, you might still have to pay a small amount to the garage upfront.
2. Opting for Minimal Cover Might Lead to Long-Term Losses
If you purchase a basic car insurance policy, your premiums will be very affordable. But, if you end up meeting with an accident and have to pay for some damages out of your pocket, your savings could take a big hit. When it comes to picking a motor insurance policy, you must make prudent choices. Find a four-wheeler insurance company that offers you the coverage you are looking for without needlessly inflating your premium. Since there is so much competition in the market today, you are sure to find something that fits your budget.
3. Your Insurance Policy Does Not Cover Everything
Even the most comprehensive insurance policy comes with a list of exclusions. You cannot assume your insurance provider will pay for damages if you do something wrong or cause an accident on purpose. Motor car insurance companies will also reject any claims if the individual driving the vehicle did not have a valid license or was under the influence of alcohol. When you are purchasing a policy, make sure you check the inclusions and exclusions. It will save a lot of trouble later on.
4. You Don’t Have to Worry About Depreciation
Every car insurance policy states an Insured Declared Value (IDV). The IDV is the highest amount motor car insurance companies will pay if your car is stolen or damaged beyond repair. It takes depreciation into account, so your IDV will decrease every year. Because of this, people believe they will never get the actual value of their car in the claim settlement. But, this is not true. Several motor insurance providers today offer a Return to Invoice add-on with their car insurance policies. You can select this add-on even if you purchased the vehicle three to five years previously. The add-on ensures your insurance provider gives you the invoice value of your car or the current market value of the same make and model. It helps cushion the loss against depreciation, but only if you have the add-on.
When it comes to buying and renewing car insurance, people often pick the quickest and cheapest option. But, to enjoy real peace of mind and enhanced coverage, you need to weigh your options and select add-ons that work for you.