Ever since the Motor Vehicles Act 1988 was passed, every car owner must have car insurance to cover all the third-party liabilities. Car insurance helps and covers against thefts, depreciation, accidents, and breakdown that you may experience.
Given the increasing number of vehicles on the road, the need and demand for a comprehensive new car insurance policy have risen immensely. New car owners need to consider the potential situations and thus, require insurance to cover their financial costs.
There are two kinds of car insurance for new cars:
- Third-party car insurance
- Comprehensive car insurance
Third-party car insurance is a car protection plan that covers the policyholder against liabilities that emerge to any outsider in case of an accident. Assuming that you are to blame in the accident and injuries are caused to an outsider or property, you will be covered under a third-party new car insurance contract. It is cost-effective, readily available, offers substantial financial coverage, and has very streamlined and quick claim processing.
Comprehensive car insurance, on the other hand, offers extensive security. In contrast with third-party new car insurance, comprehensive new car insurance not just takes care of the costs incurred in an accident or damages to a third-party in person or property. Still, it additionally covers damages to your vehicle. It likewise offers a wide variety of add-on riders that can’t benefit through third-party insurance. Comprehensive insurance will cover damages incurred in a fire, defacement, theft, natural calamity, and many situations.
It is a 360-degree car protection plan that offers the highest level of coverage with minimum legal liability. It covers most of the damages caused by natural and man-made disasters on your car. Like any insurance policy, comprehensive car insurance offers a wide range of rider options, including depreciation, emergency support, and damage, at an affordable additional premium.
Key Takeaways
- New car insurance fulfils the vehicle owner’s legal liability emerging due to substantial injury or harm caused to third-party/property.
- You can claim new car insurance online if your car is stolen.
- In case of no claims in a financial year, the owner can avail of a No Claim Bonus (NCB), which is mentioned in the policy agreement.
Did you know?
If you do not register a claim for a specific financial year, your insurer compensates you with a no claim bonus (NCB) for taking great care of your vehicle. A no claim bonus reward can be used to discount your policy renewal and ranges between 20-50%.
What are the other three types of new car insurance cover offered in India?
Own Damage Cover:
When you choose your damage cover, the expense of fixes to your vehicle that has been harmed can be claimed. There are many new car insurance calculators online that calculate the expense of collision coverage using its age and IDV. The IDV depends on the market worth of the vehicle.
Individual Accident Cover:
When you want to protect yourself, i.e., the vehicle owner, by deciding on reimbursement of medical bills after an accident, you must opt for an individual accident cover.
Zero Depreciation cover:
This coverage is mostly given as an add-on to India’s new car insurance policy. If your vehicle is damaged and you want to replace the parts, the insurer will use a new car insurance calculator to analyse the depreciated worth of the parts for a claim. A Zero Depreciation Cover will assist you with getting the total claim without reducing any depreciation.
What are the Add-on Riders Under Car Insurance Cover?
Nil Depreciation:
At the time of claim settlement, your insurer computes depreciation on specific car parts. This leads to a lesser claim amount. Nonetheless, you will get the total insured amount with a Nil Depreciation cover in your policy.
Total Cover
If there is a theft or damage, a new car insurance policy pays just for the Depreciated Car Value. Nonetheless, Road Tax, Registration Cost and Insurance expenses together cost about 15%-20% of the total On-Road Value of your vehicle, which doesn’t get repaid if the stolen car cannot be traced back. However, all such financial damages are dealt with with the total cover as an add-on.
Did you know?
Your car insurance for a new car will cover you and other relatives in your policy while they are driving your car or another person’s car with permission. Your policy includes cases where the driver not on your policy is driving your vehicle, provided they had your permission.
How to settle for the most cost-effective car insurance?
Here’s what you should do to find the cheapest car insurance:
Explore options
If you don’t search around, you won’t know which insurer offers the best rates or has the least expensive policies. Getting different quotations will assist you with observing the most reasonable car insurance policy. You can track down the new car insurance cost online or work with an insurance specialist.
Look for discounts
Discounts as against theft, deductibles, offers, and so forth are just available on the Comprehensive Plan. This is because the premium for third-party new car insurance is meagre. They are chosen by the Insurance Regulatory and Development Authority of India. In contrast, the insurer chooses the premium for a Comprehensive Policy.
Find one with voluntary deductibles
Discuss with the different insurers if they are willing to share the costs of protecting the vehicle to lessen your financial liability. This is where Voluntary Deductible does. You volunteer to pay a specific rate/part of the claim, so the insurer pays the rest. Thus, look for agencies where voluntary deductibles are offered.
Find one with the stress-free claim process
A low new car insurance price is not enough. The insurer should also be offering no stress claims. Consider purchasing a policy at a reasonable cost without being disappointed later at the time of claim?
Word to Remember
IDV
The term ‘IDV’ or Insured’s Declared Value alludes to the greatest value your insurer will pay if your car is damaged or stolen. If the market worth of your car is Rs. 5 lakhs when you purchase the policy, it implies the insurer will pay the sum total of Rs. 5 lakhs, irrespective of its current market value. It is calculated based on the manufacturer, make, model, registration date, ownership, location of registration, and the ex-showroom price of the car.
Conclusion
Now that you have a deep understanding of car insurance for new cars in India, we want to believe that you will make an informed choice. Keep the points referenced in the article in mind while deciding on new car insurance. Knowing about policy inclusions will assist you with guaranteeing that you don’t claim an unjustifiable case.
FAQs
No, car insurance for new car add-ons is optional. You can settle on the add-ons if there is something, in particular, you need to take care of and it is not already covered currently in your arrangement.
No, add-on covers can’t be bought as independent car insurances. They must be purchased alongside a Comprehensive Plan.
Deciding on the most economical new car insurance may not offer your vehicle sufficient inclusion. It is essential to look at different plans online and assess the new car insurance cost to analyse the premium before settling on one. Rather than looking for minimal expense plans along these lines, search for practical ones. It will assist you in a time of need.
Indeed, an insurance plan is applicable till it lapses. You can change to an alternate plan or pick an alternate insurer while renewing the policy.
To evaluate the new car insurance cost, you must look for a new car insurance calculator or search for various companies online to get their quotes. That is the main way you’ll realise the new car insurance price and which ones come at the most minimal rates.