Great job! You bought a car of your own with your hard earned money. It’s time to celebrate. But don’t let the joyous atmosphere let your mind wander from the first important thing you need to do once you own the car, i.e. getting car insurance. After all, you wouldn’t want your hard earned money to just go to waste right? Here’s what you need to do.
There are two types of policies when it comes to car insurance.
A third party cover is the mandatory base insurance cover that you need to buy, in case of damage to the car by a third party. A comprehensive coverage contains insurance against damages caused by self, theft, accidents, natural calamities etc.
The car dealer will definitely try to make you buy insurance from them. But do your research. Know of all the insurance policies available in the market. Once you find a few that work for you, compare their prices online so that you get the best suited policy for your specific requirements.
There are various factors that you need to keep in mind, which can help you decrease the amount of premium for your insurance.
In case you are thinking of buying insurance for your old car, a basic coverage or third party insurance should work, since the amount of premium that will go in an old car which is a liability, would be significantly less.
If it’s a brand new car, a comprehensive cover with add-ons is the only way to go. Before buying this from your car dealer, check online and see that you are getting the best for the money you’re paying. With add-ons, the premium you pay will be increased, but will also increase the financial coverage. For eg: if you opt for Zero depreciation cover, you will be paid the entire amount of a certain part, no matter how much it has depreciated in the market.
If you are buying insurance for multiple cars that are owned by members of the same family, there is provision for bundled car insurance, and this may help reduce the premium amount by a huge margin.
How is the premium amount calculated? Well it is based on a few parameters such as:
The value of the vehicle: With inflation and depreciation adjusted, the value of the vehicle will be adjudged, which will determine the cover amount of the same.
Your career: Certain occupations such as CAs, doctors, etc. are liable to receive discounts on their premiums. Check with the dealer if you do fall under that bracket.
Your age: With age, comes maturity. The premium discount offered to an older person will be better than a younger person, since they are less liable to get into accidents or drive rashly.
Your insurance history: If in the past you have made no claims, there is a no claim bonus. The other side of it is if you have made a lot of claims, the premium amount will go up.
This is a basic checklist of things you need to take care of before buying car insurance. But do your own research. Talk to friends with car insurance, speak with trusted brokers, set self parameters for the kind of car insurance you require, and choose wisely.
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This content has been created in association with YONO SBI.