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Your first car insurance policy: all your questions answered!

Generally, new car owners have a lot of doubts with regards to car insurance. You can find some of the most frequently asked questions in this article and this will clarify most of your doubts about the car insurance policy. The first and foremost thing you need to remember is that buying car insurance is mandatory and you will have flexibility when it comes to choosing the type of coverage and the company. You can purchase insurance directly from the insurance company agents or choose the insurance brokers who can offer multiple plans at one place. It makes sense to choose online car insurance as this can save you lots of money spent on insurance. Apart from that, the paperwork required for such options is less, and you can complete the entire transaction in quick time.


Is buying car insurance mandatory?

  • Yes, buying car insurance is mandatory as per the Motor Vehicle Act and you will be penalised for driving the vehicle without proper protection. The traffic police have the authority to check any car running on the road for the insurance papers, and they will impose a severe fine when the vehicle is being used without any insurance cover. The penalty will grow for repeat offenders, and such people can even be imprisoned for violating the traffic rules. For this reason, you should at least be covered with a third party insurance plan that offers basic coverage at nominal rates. As per the latest guidelines issued by IRDAI, buying insurance for the first three years is mandatory, and you need to pay the premium at once for the first three years. After that, you can renew the policy in the usual way.



Are there different types of insurance policies?

  • Every insurance policy sold in the market is not the same, and you need to be aware of this fact while buying car insurance for the first time. Note that different plans offer different types of coverage and you should choose them based on your budget for the insurance cover and your individual requirements. Let us check the prominent types of car insurance plans available in the market.


Third party coverage:

This is the basic plan that you can get in the market, and it is also the most inexpensive option for customers. It offers coverage against legal liabilities that arise out of an accident situation. When your vehicle has caused damage to third party property or life, you can use the policy to pay compensation to the victims. You can get this at cheap rates when you choose third-party insurance online from reputed companies. However, the plan also has its share of drawbacks, and your own vehicle will not be covered in any manner. This means that personal damage will not get any coverage and you will have to pay all the expenses for your car from your pocket.


Comprehensive coverage:

This is an advanced version of third party cover, and you can get all the benefits of third party cover in this plan. Along with that, you will even get coverage for your own vehicle, and this is the best option you can choose for new cars. However, it is slightly expensive when compared to third party cover. In this regard, you can select this if you have a reasonable budget for the insurance policy. As the market value of the new car will be high, it makes sense to buy this for the first few years so that you can get the best protection for your car in future.


Which policy is the best?

  • This is a tricky question to answer in general as it depends on various factors. Primarily among them is your individual need and what suits best for one person may not be the obvious choice for another person. You should understand the benefits of all the plans in the market and then choose the optimum policy that offers good coverage for your car. In general, it is a good idea to go for a comprehensive system for the initial few years as this provides good coverage even though the cost is slightly higher than the third party plan.



Can I buy car insurance from any company in the market?

  • As a consumer, you have complete flexibility in this regard, and you can choose car insurance from any company of your choice. As there are many companies in the market, it makes sense to use the online car insurance calculator so that you will have the details about all the plans suited for your car.



Can I choose the sum assured coverage for the car?

  • You need to understand that the maximum sum assured coverage offered for any car is dependent on the market value of the vehicle. This keeps depreciating every year, and your truck will get less coverage with time. You cannot choose the sum assured coverage as this is decided by the insurance service provider based on various factors.



Can I choose the tenure for the car insurance?

  • The first time car insurance buyers have no choice as per the latest guidelines issued by IRDAI. You have to buy compulsory insurance for three years at a stretch. After that, you can renew it on an annual basis or go for multi-year plans depending on your convenience.



Where can I buy car insurance?

You can buy car insurance from multiple sources. Each one has its own advantage, and you can choose any option that meets your individual requirements.
  • Buy from insurance companies: Most people who are new to the insurance market choose this option as they can quickly get in touch with agents of insurance companies at the car showroom. However, you will not be able to compare different plans in this manner, and you may end up paying more money in such cases.
  • Buy from online brokers: This is a better option, and you can save a lot of money when you choose online car insurance for your new vehicle. This is also a convenient option as you need not to visit any office and all the transaction can be completed in quick time. You can even compare different plans in this way and choose the policy from any company of your choice.
  • Buy directly from insurance company online: If you have zeroed in on any company, you can buy insurance directly from them through their official portal. Most reputed companies have this option, and this will save both times as well as money during the process. You can even use their online car insurance calculator and get know the premium rates for different plans offered by the company.



How much does car insurance cost?

  • This depends on the type of insurance policy you are choosing for your car, and the cost will be very less for third-party coverage. However, the comprehensive coverage will be slightly higher but offers better protection than the other options. You can use the online car insurance calculator available at reputed insurance portals and get some idea about the cost of car insurance.



Can I get compensation for repairs and general maintenance?

  • You will not get coverage for general maintenance and mechanical repairs in most cases. Remember that the insurance policy will only offer compensation when some untoward incident happens to your vehicle and the general maintenance like servicing and other tasks has to be taken care of by the car owner.



Will car insurance policy covers the life of passengers?

  • Unless you have chosen specific add-on coverage for this purpose with the comprehensive plan, you will not get coverage for the passengers. There are few add-on covers available that offer good protection in such cases, and you can buy them by paying additional premium along with your comprehensive plan.



Is it mandatory to renew the policy later?

  • Yes, it is mandatory to have continued coverage for your vehicle throughout its lifetime. Once the policy expires, your vehicle will lose coverage and you will be putting yourself and your vehicle under risk in that situation. For this reason, you should always renew the policy before its expiry to avoid many problems.



Will the insurance company pay compensation if the car is stolen?

  • It is possible to get compensation for complete loss of vehicle due to theft when you have exclusively chosen the theft cover along with your comprehensive coverage. Even though this costs additional money, it is worth to choose such options for new vehicles.


Is coverage offered for damages due to natural disasters?

  • When you buy a comprehensive insurance plan, your vehicle will be covered for damages done due to natural disasters like earthquake, storm, heavy rain and floods. You can even get coverage for fire accidents with such coverage.


Is there any difference in coverage if I buy the policy online?

  • There is no difference in terms of features when you buy the policy online. The only difference may be in terms of price as you can get cheaper deals with online brokers when compared to the regular insurance agents.

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