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Car Insurance lessons
You obsessed over buying your car almost a whole year and went through hundreds of reviews, conversations, researched like a soul possessed, sometimes even till the wee hours of the night. With many versions of excel sheets, comparing features, mileage, engine cc, torque, speed, other indecipherable terms that I forget, you zeroed in on THE CAR.
One important step that I bet put on the back burner is researching on the car insurance policy that would protect your beloved Betsy from the harshness of this world and its unforeseen cruelties. Can you imagine Betsy braving those bumps and nicks and the idiotic rashness of those hit and run drivers?
Sounds almost silly that you didn't obsess even half as much about that one important aspect as much as you obsessed on the colour of the car. But don't sweat; it isn't really that complex a process. Just look at the checklist here to get the best deal on your car insurance. This will ensure the new member of your family is well protected and you don't have to worry about the massive bills.
1) Compare the quotes you get from the dealer
Did you finalise the price of the car in the first go? Obviously you didn't. The more you researched, the better the deals & discounts you found. It works the same way with car insurance. The first quote that your dealer will provide you for the premium will, most definitely, be higher than what you can bargain for. Make sure you check online for quotes, compare & research and buy the policy of your choice from the place that gives you the most competitive quotes.
You can swing this discount to the tune of about 10% to even 15% in some cases.
Remember, while it is mandatory to buy car insurance when you buy a car, it is not mandatory to buy the insurance from the dealer from where you buy the car. You are free to buy it from anywhere that gives you the best price for the options you want.
2) Did you transfer your No Claim Bonus benefit?
If you've had a car before, you would know that each year that you don't make a claim on your insurance policy, the subsequent year you get a discount on the premium. This could be as large as 50% at the end of 3-4 years. Most people do not know this, but this discount is transferable to the policy you buy for your new car. Make sure to present your No Claim Bonus certificate at the time of buying the new policy to avail the requisite discount.
3) See what 'add on' feature you need in your policy
Just like your car has several nifty features that you can add to the basic model, so does your comprehensive car insurance policy. A few important examples are listed below:
a) ENGINE PROTECT:
Buying a premium car like an Audi or a BMW? I'm impressed by your classy choice and would most definitely ogle at your car, if I spot it somewhere!
However, most new premium cars, not just Audis and BMWs, in the INR 15 lakh+ bracket have very low chassis. This increases the chances for engine damage manifold and sometimes makes it unavoidable, especially on the Indian roads and in the monsoon season. Base comprehensive policies available in the market do not cover you against engine damages, unless it has been totalled in a car accident.
Hence this is a very practical and handy feature to opt for, especially for premium cars whose engine repair costs are usually very high.
This should cost you less than 10% of the base premium.
b) ZERO DEPRECIATION/NIL DEPRECIATION/BUMPER TO BUMPER COVER:
This is a must buy for people who drive their car a lot and for those of us who get upset with the smallest of the scratches on our respective Betsys! If you have a base policy, you need to pay part of the claim, over and above the mandatory deductible amount that you pay on claim settlement. This part payment is based on the kind of claim you make. But when you have Zero Depreciation add on, on your base policy, you do not have to pay any part of the claims you make (besides the mandatory deductible amount).
This add-on would cost you in the range of 10-15% of the base premium.
c) ACCESSORIES & FITTINGS:
If you've bought expensive accessories such as a high-end stereo system, you should definitely get the accessories insured as well. If you plan to fit your car with a CNG/LPG kit, you should be aware that the base policy would not cover any damage to the kit in case of accidents and you need to insure the kit separately.
Both these kinds of fittings and accessories protection would cost you about appx. 10% of your base premium but may vary a lot depending on the fittings and accessories.
d) RETURN TO INVOICE/CAR REPLACEMENT/INVOICE COVER:
If you live in a theft prone area, you should invest in the Return to Invoice add on. Typically a new car is insured on the ex-showroom price, and not on the on road price that includes taxes, registration charges and dealer handling charges. With this feature, you insure your car for the 'on road price' in case the car gets stolen or has total loss in case of an unfortunate major accident.
This should be a cost of about 15% of base premium.
4) Did you get the discount you are entitled to?
1. Are you a member of any automobile association?
2. Do you have an anti-theft device installed in your car?
If you answer yes to any of the above, you will be entitled to a discount of up to 5% on your base premium.
5) Have you checked the company details?
A quick search will answer the following important questions you need to ask about the company you are buying the insurance from
1. What is the turnaround time from the time you make the claim to the time it gets settled?
2. What is the claim settlement ratio for the company? This gives you an indication of how considerate the company is towards your car woes.
3. Is the claims process easy and company alliance of service centres well spread? Do they provide cashless settlements for repairs?
Remember, once you buy the policy you should make sure you always keep the policy copy, claim process document, policy wording document explaining each of the add-ons you opted for, in your car at all times.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
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