If you have just got your four-wheeler home and need information on how a new car insurance policy works, we suggest you read on. We’ll cover everything, right from the basics to your most common queries. Here we go!
Buy Car Insurance for New Cars Online
Buying and comparing insurance policies has become super simple. Now you can easily explore multiple policies online and opt for the one that suits your needs. If you’re planning to buy insurance online, we’ve got a step-by-step to help you in the process. But first let’s understand a few more important things about this insurance.
Why is it Important to Insure Your New Car?
New car insurance is like a shield against unforeseen events. It covers your vehicle for several mishaps that can occur on or off-road. The plan protects your car against financial losses and thefts caused due to unprecedented events and consequent liabilities.
In addition, having an automobile insurance is as important as having a driving license. As per Motor Vehicles Act 1988, it is mandatory to have new car insurance for your vehicles.
Types of Car Insurance for New Cars
Getting a new insurance policy for your four-wheeler? Here are the types of plans you must know about.
Comprehensive
A comprehensive car insurance is one of the most preferred options because aside from covering third-party liabilities it also protects against damages caused to you and your vehicle.
The benefits of comprehensive car insurance include –
- Covers your cars damage
- Protects you from third party liabilities
- You can customise your IDV
- Cost-effective
- Compensates in case of car theft
- Protects your car against natural disasters
Third Party
As the name suggests, this insurance plan only protects against damages caused to a third party and wouldn’t cover your losses.
The benefits of third-party plan include –
- Covers for third party liabilities
- Is required to drive legally on Indian roads
- Protects you from traffic fines
Also Read: Types of General Insurance
Difference Between Comprehensive and Third Party Policies
| Third Party Car Insurance | Comprehensive Car Insurance | |
| What is it? | The most basic car insurance plan. It covers for damages and losses your car causes to a third-party person, vehicle or property. | This is an all-round cover for your car- it not only takes care of your third-party liabilities but also covers for you and your own car. |
| Coverage | It only covers third-party damages and losses, such as if you injure a third-party person, his/her car, or third-party property as a result of an accident or collision. It also contains personal accident insurance to protect you from personal injury or death. | It also covers damage caused to you or your car. |
| Advantages | It covers you in the event that you inadvertently injure someone on the road or damage someone’s vehicle/property. This way, you know you won’t have to break the bank in the event of such an emergency. | It covers both damage to your own vehicle and third-party harm. So, no matter what, you know you won’t lose money! Furthermore, you might receive an NCB (No Claim Bonus) for vehicle insurance renewals for each year you do not make a claim! |
| Limitations | It doesn’t cover for damages to your own car. | It is slightly more expensive than a third-party car insurance. |
| Customisation | No customizations are possible under this car insurance plan. | You may personalise your car insurance policy by purchasing particular add-ons and coverages. For example, depreciation coverage, engine and gearbox protection, Return to Invoice, Breakdown Assistance, and so on. |
| Premium | The premium amount here is established by the IRDAI depending on your car. It is less expensive than a comprehensive car insurance policy. | Although more expensive, the premium here is based on many more aspects such as the city you drive in, the brand and model of your vehicle, and, of course, the add-ons you choose (if any). |
Factors to Consider Before Buying a New Car Insurance
Most vehicle owners view a new insurance policy as an obligation instead of a necessity. Often, people don’t compare policies and base their purchase decision only on low premiums. But there’s a lot more to consider when buying a new insurance policy.
You should be as enthusiastic about buying an insurance plan as you must have been while purchasing a new vehicle. Don’t get worried if this seems like a task. We’ve got your back.
Take a look at a few factors before buying new car insurance.
Understand the Requirement
It’s fine if you are not an expert when it comes to assessing risk. But we’re hoping that you can gauge basic risks.
For example, have there been thefts in your area or do you live in a flood-prone area? Do some introspection, and you will understand the type of insurance cover you need.
Consider the Provider
When buying new car insurance online, you must be a little brand conscious. You must have surely spent some time thinking about which car brand you need to go for. Please do the same for the insurance provider.
If you like what the insurance company offers and promises, shake hands and insure your four-wheeler.
Focus on Policy Terminology
Modern-day insurance companies are doing their bit towards making insurance easy and understandable for all. Thanks to informative websites, helpful executives and friendly apps that make insurance less intimidating during the time of buying or renewing the policy.
However, you must ensure you read the fine print carefully. Go through the terms and conditions thoroughly.
Compare Quotes
One of the most vital things to do when buying insurance plans online is to compare quotes from different providers.
However, make sure that you compare two policies that offer the same benefits or coverage. , make sure you do Make sure to keep the coverage constant.
How to Buy New Car Insurance for New Cars Online
Planning to buy new insurance plan online? Look at the step-by-step guide on how to do it.
Step 1 – Fill in a few details, such as the vehicle’s model, variant, registration date and the city you live in. Now, get a quote from the insurance company and select a suitable plan.
Step 2 – Next, choose a Standard Package or a Comprehensive Insurance Policy.
Step 3 – Share details about the no-claim bonus earned with the insurance provider.
Step 4 – You’ll get a quote for the premium. If you are taking a standard new insurance policy, you can customize it further with add-ons.
How to Calculate New Car Insurance Premium
To calculate insurance premium, you need to use a formula.
Premium = Own damage premium – (No claim bonus + discounts) + Liability premium.
Alternatively, you can also use an insurance premium calculator to know the premium amount easily.
Best Car Insurance Companies in India 2022 (IRDA Approved)
| CAR INSURANCE COMPANIES | CASHLESS GARAGES NETWORK | INCURRED CLAIM RATIO 2019-2020 (%) |
| Bajaj Allianz Car insurance | 4000+ | 88.83 |
| Bharti axa Car insurance | 5200+ | 87.99 |
| Cholamandalam Car insurance | 6900+ | 85.89 |
| Digit Car Insurance | 1400+ | 87 |
| Edelweiss Car Insurance | 1000+ | 116.31 |
Top Car Insurance Plans for New Cars 2022
Some of the best insurance plans for new cars in 2022 include –
- HDFC ERGO Comprehensive Insurance.
- IFFCO Tokio Comprehensive Insurance with Zero Depreciation Cover.
- TATA AIG Comprehensive Insurance.
- SBI General Private Insurance Plan.
- Digit Car Standalone Own Damage Insurance Plan.
Is it a Good Idea to Purchase New Car Insurance from the Dealer Directly?
More often than not, dealers charge a commission when you buy a car insurance directly from them. In addition to this, there aren’t many options to choose from and you can’t compare the policies. This is why it’s advisable to research and buy your new insurance policies online.
Also Read: Basics of Motor Insurance
What Does Car Insurance for New Car Cover?
The inclusions of new car insurance vary but here are a few things that most policies cover.
Coverage for Your Car
A new car insurance policy offers coverage for any damage caused to your vehicle. However, you must identify the one that suits your needs.
Natural Calamities
Unforeseen natural calamities can occur anytime. An insurance policy can protect you in case of such events.
Theft
Before you think that your car can never be stolen, think again. Thefts are becoming common, and you need an insurance policy to protect your vehicle in these cases.
Third-Party Liability
Imagine getting in an accident. Suddenly you have to pay a huge amount to the person whose car incurred heavy damage. Not ready for such scenarios?
This is where a car insurance policy can help you.
Injury to a Person
If you have accidentally run over a person and injured them, a car insurance policy can compensate the injured or their family.
Damage to Property
Some accidents can also cause damage to a person’s property. Don’t worry! The new car insurance policy will pay for the damages caused.
Add On Covers in New Car Insurance Policy
Zero Depreciation Cover
It is an add-on cover that helps share the burden of depreciation on the parts of the car.
Engine Protection Cover
This offers coverage for loss and damages caused to the car’s engine due to different issues, such as oil spills, mechanical or electric breakdown of the engine, etc.
Roadside Assistance Cover
Roadside assistance offers the owner roadside assistance in case the car breaks down.
Loss of Personal Belongings Cover
There is always a chance of losing any personal items. This add-on cover compensates for such losses and also pays for the damages caused to your personal belonging in the car.
Passenger Cover
A regular new car insurance policy does not cover the expenses for the passenger. A passenger cover offers coverage for the medical cost incurred by passengers in the four-wheeler.
Exclusions of a New Car Insurance
There are a few exclusions that a standard policy does not cover, including –
- Damages incurred while you are using the car for illegal purposes
- Damage caused to the car because of using it beyond capacity
- Wilful damage caused to the vehicle by the owner
- Damage caused to the vehicle due to oil leakage
- Damages caused when the driver could not produce a valid license
- Damages caused when an underage driver was driving the vehicle
- Damages caused when the policy expired and wasn’t renewed
Also Read: What is first party insurance?
Conclusion
Here’s everything you need to know about a new car insurance policy. Now it’s time to make an informed decision and choose the plan that best suits your needs.
FAQs
Yes, you can buy new car insurance online. Most insurance companies have their websites and give you the option to select the plan and pay the premium online.
As per the Motor Vehicle Act, taking a car insurance policy is mandatory. The policy ensures that the car owner is protected from financial losses that occur due to thefts, accidents and unforeseen events.
No, you cannot opt for add-on without having a car insurance policy.
Yes. Car insurance policies are usually for a period of 12 months. For this reason, you must renew the policy every year.
Zero depreciation coverage is when the policyholder does not have to pay the depreciated value of damaged/replaced parts.
It is an insurance policy when the claims for vehicle parts get settled without applying depreciation.
IDV in car insurance is the maximum claim that the insurance provider will pay if the vehicle gets damaged beyond repair or is stolen.
The cashless facility in car insurance is a way of raising claim after a mishap or accident, where the insurer does not have to pay for damages and instead, the insurance provider will directly settle bills.
New car insurance does not cover passengers until you get an add-on.
The premium for a new car would be more than for a used car.
