How to Choose the Right Car Insurance Policy for Your Vehicle

Types of Car Insurance Policies: Comprehensive vs. Third-Party

Before you can choose what insurance policy to spend on, you must ideally also know about the different types of policies available in the market today. This is not a scary task. When broadly divided, there are two types of car insurance policies that you must know about. The first is third-party insurance plans. And then there are comprehensive insurance policies. 

1.    Third-party insurance plans

As the name suggests, third-party insurance plans are plans that are only meant for third parties. This means that such plans are not meant to cover you. Instead, they will cover any damage caused by your vehicle to the property of any third party or the individual himself. This sort of insurance plan is mandatory for everyone under the law and doesn’t extend to the damages that might be caused to you during any accident. 

2.    Comprehensive plans

Comprehensive plans will cover both other parties and you. This can be a huge relief since you won’t have to cover your costs out of your pocket. Even though comprehensive plans can be more expensive than the other kind at first, they can help you shrink your costs and expenses in the long term. Thus, don’t forget to compare the pros and cons of both types of plans and their costs before concluding.

Factors to Consider When Choosing the Right Car Insurance Policy

There is no magic trick to find the best car insurance plan. For identifying the policy that suits your needs the best, you will have to do some research. But for starters, the most prominent factors that often come to one’s mind while picking a car insurance plan include the claim settlement ratio, the insurer’s reputation, the costs involved and other features like the no-claim bonus. Let’s now talk about these points in more detail. 

1.    Claim settlement ratio

The claim settlement ratio can be extremely important when choosing an insurer. To know for sure whether your insurer will reimburse your claims. You will first have to see if they have a history of honouring their past claims. 

For this, the claim settlement ratio can help. You must opt for a certain insurer or their plans only if the claim settlement ratio they offer is high or at least decent. This way, you will be able to ensure that no matter how much damage occurs, your plan will provide you with guaranteed coverage. 

2.    Cost and coverage

A good plan doesn’t always have to be costly. Similarly, just because a plan is highly expensive, that doesn’t mean it’s got good coverage and is highly effective. Thus, you should be careful while making the decision. Your choice should be a balance between both cost and coverage. Find yourself a plan that offers great features and yet, you won’t have to break the bank for it. 

You might want to opt for affordable car insurance plans at first. But remember, it will cost less at first but might lead to greater expenses later. Long-term coverage and features are the key in this situation. 

3.    Scope and exclusions

Some other smaller factors can make a huge difference. In each plan, there are some exclusions mentioned as well. You must be careful while going through the exclusions and the scope since you will not be covered in the event of a listed exclusion. Again, also check the deductibles carefully. These deductibles will determine exactly how much the company will cover and how much you’ll have to pay from your pocket. 

4.    No claim bonus

Furthermore, there is also a helpful feature called NCB or No claim bonus in some plans. Try to select a plan that offers such an advantage. This feature is helpful because if, in a year you make no claims, you will be rewarded with lower premiums for it. This helps take some burden off you during premium payments for the said year. 

How to Assess Your Vehicle's Insurance Needs

This is totally up to you and how much you want to spend on an insurance policy. But some broad ideas can help you in deciding what plan suits your vehicle the most. This largely depends on what kind of vehicle you own. If it is a brand-new car, it will be wiser for you to invest in a comprehensive plan that can provide you with better coverage, repairs and replacements. 
But if it is a rather older model that has already been used for years, it might be a good idea to go for third-party coverage. This will make sure you meet all the mandatory legal requirements and you won’t be spending so much on an old car either. 
If you are still unsure about how much premium you can pay, you can also use an insurance premium calculator that can easily make the estimates for you. This will eventually help you choose the plan that you can afford. 

Understanding Car Insurance Add-ons: Which Ones Do You Need?

If you think your vehicle is exposed to a certain kind of risk, you can opt for an add-on that will provide your vehicle with suitable coverage for the said risk. Even if your premium will go up depending on how many add-ons you opt for, this can provide great relief in times of need. But what are the most important types of add-ons? 
For starters, the zero depreciation cover is a kind of add-on that promises a full claim settlement ratio without considering depreciation or roadside aid. Engine protection can cover an engine failure during a flood and consumables cover the costs of other items like oil and nuts that are skipped by the basic policies. In addition to all the above, the gap insurance add-on covers the gap between the insured declared value and on-road value.