Ever heard the saying “you get what you pay for”? It’s surprisingly true across a number of financial decisions, including cheap insurance. And given that India has only about 1% of the world’s vehicle population but somehow accounts for 6% of its traffic accidents, you want to be sure you’re protected when you hit the road in your sweet new ride.
Here’s everything you need to know about cheap car insurance – and why you should consider swerving to avoid it when buying insurance!
- Car insurance is a kind of insurance that essentially protects your interest on the roads while driving in India.
- It offers financial compensation in case of accidents and other damage-causing incidents.
- While cheap car insurance may seem like a good, lucrative deal, it likely does not offer comprehensive coverage and might leave you high and dry when you need it the most.
- Your best bet is to find good car insurance at premiums you can afford – this can be done with some research and careful comparison, and a little bit of that charm and negotiation skills we’re sure you possess!
Get Into the Basics: What is Car Insurance?
Simply put, car insurance is a kind of legal agreement between two parties: the first party – you, the car owner – and the second party – the insurance provider. According to the agreement, you promise to pay a regular premium to the insurance provider, and in return, they promise to compensate you for any damages to your car in case things go awry. Car insurance that protects third parties – pedestrians, other drivers, property owners – from damages is mandatory for all cars to be considered road worthy.
Stay Away from the Hazards: Benefits of Car Insurance
Car insurance – even cheap insurance – offers a lot of benefits to car owners and drivers. Especially if you’re willing to pay higher premiums for comprehensive car insurance, you can rest easy while taking your car to the big bad main road. These benefits include:
- Financial coverage in case your car gets into an accident and needs to be repaired or even replaced – this includes things like natural disasters, fires, theft, road accidents, and so on.
- If you get into an accident and your car damages another car or hurts another person, car insurance covers you financially for the damages.
- If you get hurt, or even die, in an accident, many car insurance policies offer compensation for medical care or to your family.
- They allow you to remain legally compliant with Indian motor law.
In a nutshell, car insurance protects what is a large and significant investment for many of us – our cars – from damages and protects you from being liable for damages caused to others in case of an accident.
Buying Cheap Car Insurance: Is it a Good Idea?
Okay, so you’re convinced you need car insurance. You do some research and find some options with tantalisingly low premiums – cheap car insurance! Ready to say you’re in and sign the dotted line? Wait a minute.
When you’re shopping for something as important as a car insurance policy, you should let your buyer-beware instincts take control over the instincts that love a good bargain. While we wouldn’t dare claim that cheap always means not very good, when it comes to insurance, you truly get what you pay for.
Cheap car insurance, even online, often refers to cheap third party car insurance, which offers limited coverage compared to comprehensive or first party insurance plans. This is the minimum you need to be legally compliant, but it only covers damages caused to other people – not your own car or even person. In other words, cheap insurance does not protect your own interests on the roads; it only protects other people from your driving and lets you be legally compliant.
Did You Know?
India houses one of the biggest markets for cars and other automobiles in the world. It makes sense that we’re also constantly thinking about insurance, no?
Affordable Vs Cheap Car Insurance
When it comes to low car insurance, there’s no denying that you get what you pay for. By this, we mean that cheap auto insurance premiums always reflect the quantum of their coverage and services you will be able to claim from the provider. There’s an important difference between affordable car insurance and cheap car insurance. The one you should be keeping your eyes peeled for is affordable car insurance.
As the name suggests, affordable car insurance will get you the coverage you need at premiums you can reasonably afford. Cheap insurance, on the other hand, will likely not offer you enough coverage, leaving you unprotected when you need it the most.
Before you finalise that cheap auto insurance plan, you’ll be well served to compare premium rates along side the coverage each plan is offering to ensure you know what you’re paying for and getting. There are many neutral platforms on the internet that can help you do this!
Before You Find Low Price Appealing, Read the Cons of Cheap Car Insurance
Still feeling drawn to that cheap insurance plan? We understand. Here’s a few of the cons you should know about before you go down that road some more.
Cheap insurance will most likely give you very low coverage, most likely only third party coverage. Let’s say you and another car get into an accident and both your cars get totalled; a cheap car insurance plan will pay the other car owner the value of their car, but will unfortunately leave you in the cold. Yes – this is legal compliance, but you’re now stuck with no car and no compensation.
Bad customer service.
Given that cheap insurance means you will be paying the lowest premiums offered by the provider, you will also likely be a low priority customer and will be stuck with bad customer service. Be sure to research your insurance provider carefully before you enter into an agreement with them.
High out of pocket expenses.
Cheap insurance policies often offer low premiums and add clauses wherein they only offer partial compensation and support. This is closely related to low coverage but is still different, because it makes you liable for partial damages caused in case of an accident or other unfortunate event.
Get Affordable Car Insurance: Here’s How
You’re about ready to scream that you understand the perils of cheap insurance – fair! Here’s how you can get affordable car insurance for your shiny metal baby.
Compare insurance plans across providers.
The best way to find a good insurance deal is to compare coverage and premiums across providers – this way you’ll be able to determine where you can get the coverage you need for the premium you can afford.
When you go shopping on the streets, you find yourself haggling with the shopkeeper, right? You can – and should – do the same with your insurance company!
Use any previous no claim bonuses as leverage.
If this is not your first time buying car insurance and you have a good track record with driving, you have likely qualified for no claim bonuses previously. This can be a great asset when it comes to getting affordable premium rates from your provider because you’re a great investment.
- Check the settlement history of your provider.
Before you close the deal, be sure to check the track record of your chosen insurance provider when it comes to providing claim settlements.
- Choose only the add ons you require.
Good insurance covers come with many add ons, and while insurance company executives will try and market them all to you, do your research and only spring for the ones you really need. For instance, engine covers are great for places where it rains a lot because you might end up with a waterlogged car. Engines are not usually protected under regular insurance policies.
Word to Remember
Buyer beware: When it comes to cheap car insurance, you get what you pay for. Cheap car insurance comes with little coverage and great costs later. Buyer beware! Do your research before you seal the deal when it comes to cheap insurance.
While cheap car insurance can be very tempting, especially when you’re a good driver and find yourself doubting the very point of getting insurance, it’s ultimately not a great idea. While you’ll undoubtedly save on premiums in the short term, you may end up needing to shell out the big bucks in case things go wrong down the line. Instead of cheap insurance, your best bet is to do some research and find insurance you can afford that also gives you the coverage you need.
Cheap insurance, for cars, as the name suggests, offers cheap premiums for car insurance. Usually these covers only offer minimum coverage for legal compliance and may turn out to be a bad investment choice in the long run.
An excellent way to save on car insurance is to do your research and compare offering and premiums across insurance providers to find the deal that gives you what you need at affordable rates.
Yes. You are legally required to have third party car insurance to drive on Indian roads. That said, you should definitely consider getting a more comprehensive insurance plan that covers your interests on the road as well.
Read more about What is Engine Protection Cover?