How to Buy Car Insurance Digitally: A Comprehensive Guide

How to Buy Car Insurance Digitally:

In recent years, there has been a sharp rise in the number of platforms offering car insurance policies online. This rise is also supported by a marked rise in people looking for car insurance online. While the pandemic-induced lockdowns saw a shift in consumer patterns across industries, the insurance sector experienced the change too.

Today, many car owners are buying and renewing their vehicle insurance online. Today, people can compare four-wheeler insurance for cars online by using the car insurance calculator offered by most sites, customizing the plans based on their specific needs, purchasing the policy with minimal paperwork, storing the policy documents digitally, and submitting a claim online too. However, while this DIY mode of buying insurance can produce the cheapest car insurance it also requires you to keep certain things in mind as highlighted below.

Types of Car Insurance Policies

There are two broad categories of car insurance policies:

  • Third-party liability-only policy: where the insurer offers protection against losses arising from damage to a third person or third-party property. However, any damage to your car or injury to you during the accident is not covered.
  • Comprehensive policy: where the insurer covers liabilities to a third-party and your car along with any physical injury to a third party or you.

Before you apply for car insurance online, it is important to understand the inclusions and exclusions of different types of policies to find the best one for your needs.

Add-On Covers

When you opt for comprehensive car insurance online, you expect the insurer to cover all costs associated with your car. However, all insurers have a list of inclusions and exclusions that need to be read carefully before signing the dotted line. Also, many insurance providers offer benefits to policyholders by offering specific add-ons. These additional covers can help you customize the policy as per your needs.

Understand Some Terms

When you start looking for car insurance online, you will be faced with many terms that would need some understanding. Here are some commonly used terms when you buy insurance online for car:

  • IDV: The Insured Declared Value or IDV is the maximum value that the insurer might pay if your car is damaged beyond repair or stolen. Insurers allow you to reduce the IDV of the car for a lower premium.

However, make sure that you understand this aspect carefully and consider the make and model of your car before deciding how much IDV you want the policy to be based on. This is considered while you receive a quote for car insurance from the insurer.

  • NCB: No Claim Bonus or NCB is a benefit offered by insurers to policyholders who do not file a claim during a policy term. So, if you don’t file a single claim during one car insurance policy term, then the insurer offers you a discount on the premium when you renew it. This discount keeps increasing as the number of terms during which you don’t file a claim increases.
  • CSR of the Insurer: The Claim Settlement Ratio or CSR is an important metric that you can use to find the best insurer. This is a simple ratio of the number of claim applications received to the ones settled. Look for an insurer with a higher claim settlement ratio.

Inclusions and Exclusions

Every insurer will detail the inclusions and exclusions of the policy in the policy document. You can download the policy wordings from the website of the insurance company and go through them in detail. Remember, anything that features in exclusions will result in the rejection of your claim application. Make sure that it does not have any clause that you are not comfortable with.

Things to Keep in Mind

Here are some things that you can keep in mind while purchasing a car insurance policy online:

  • While the third-party liability insurance for the car is mandatory and has a lower premium, it does not cover damages to you or your car. This is where a comprehensive plan is better.
  • Don’t choose a policy purely based on low premiums. Look at all aspects of the insurer and the policy before making a decision.
  • While add-on covers might seem like an additional cost, they can reduce your expenses at the time of a claim. Hence, choose them based on the risks you foresee for your car.
  • Avoid skewing information to get discounts on premiums as this can expose you to the possibility of rejection of your claim in the future. Provide accurate details about you and your car.

Summing Up

Traditionally, people approached an insurance agent to buy a car insurance policy. These agents were aware of the things that needed to be looked for while choosing a policy. If you are planning to look for one yourself, then make sure that you understand the wording of the policy and the coverage you get.

Online websites of reputed insurers like Tata AIG have made buying insurance simple and cost-efficient. However, they have also put the responsibility of choosing the right plan on you. Don’t decide in haste. Compare features, insurers, and premiums, and look at all aspects carefully before buying. Good Luck!

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