Four-wheeler insurance is mandatory in India. According to the Motor Vehicles Act, 1988, all car owners need to purchase a third-party liability cover to drive on the Indian roads. Car insurance offers protection against financial losses arising due to accidents, mishaps, theft, etc., in return for the payment of a premium amount. Being a mandatory requirement, the car insurance premium is a recurring cost. Hence, many car owners look for affordable car insurance plans.
In this article, we will share five steps to help you buy a low-cost car insurance plan online.
Car insurance policies can be divided into two broad types:
- Third-party liability insurance – As mentioned above, this is the mandatory insurance for a car in India. As the name suggests, this policy offers protection against damages caused by your car to another vehicle or person. This does not cover costs resulting from any damage to your car.
- Comprehensive insurance – This is not mandatory. However, it offers third-party insurance AND own damage insurance to car owners. Additionally, you get a choice of attractive add-ons that can further increase the extent of your car insurance coverage.
Based on the extent of cover offered, third-party insurance plans are the cheapest motor insurance plans in India. You can buy a third-party cover if you wish to satisfy the basic legal mandate and get an affordable cover. However, this plan will not offer cover for your car or for your injuries. For that, you need to buy a comprehensive car insurance cover.
Here are a few ways to get affordable car insurance cover.
5 Steps to Buy Low-Cost Car Insurance Online
Here are five simple steps to buy low-cost insurance for a car online:
Step 1: Research
Most insurers offer online auto insurance. Hence, before you start looking at who has the cheapest car insurance in India, research the options available to you by visiting the websites of top car insurers. Look at the cover offered by different plans and compare them.
Step 2: Add-ons
Add-ons can play an important role in determining the car insurance price (premium). You need to assess the way you use your car and choose add-ons accordingly. Once you know the add-ons needed, use the car insurance premium calculator and find the premium across different insurers.
Step 3: Claim Settlement Ratio
When you purchase car insurance, understanding the claim settlement ratio is essential to assess the insurer’s efficiency in settling claims. This is an important metric since low-cost insurance with a low claim settlement ratio can cause issues while getting your claim processed.
Step 4: Read Reviews
Every insurer has certain pros and cons. Hence, it is important to read customer reviews to understand the benefits offered by each provider to find the perfect one for your car at the lowest cost. For example, TATA AIG car insurance, with over five crore policyholders and a 150-year-old legacy of TATA, makes it a reliable insurer. Also, it focuses on settling claims quickly with claim experts working across the country for the same.
Step 5: Use a Premium Calculator
Leading motor insurance providers in India, such as Tata AIG, provide a free car insurance calculator on their website. You can use these calculators to determine the exact amount of premium you will have to pay for the coverage you choose. You can check the total premium based on the type of policy you choose, the tenure, the combination of add-ons you opt for, any discounts, etc. Once you find the right policy at the price you prefer, follow the purchase instructions mentioned on the insurer’s website and buy car insurance online.
Tips to reduce the cost of car insurance
Here are some things that you can do to reduce the cost of car insurance:
- To reduce the possibility of theft, you can install the latest anti-theft devices in your car. This can help you get some discounts on the car insurance premium.
- There are two deductibles in car insurance – compulsory and voluntary. A deductible is an amount you have to pay every time to make a claim. The compulsory deductible is determined by the IRDAI. On the other hand, a voluntary deductible is optional and can be decided by you. A higher deductible results in a lower premium.
- All insurers offer discounts to policyholders on renewal, called the No Claim Bonus (NCB), if they have not filed a claim during the policy tenure.
- Many insurers also offer discounts on premiums to car owners who are members of certain automobile associations. Ensure that you check the list of associations acknowledged by the insurer.
Some essential terms that you should know before buying car insurance online
Car insurance providers use certain jargon that can be confusing for a first-time car owner. Here are some commonly used terms that you should know before buying car insurance online:
- Insured Declared Value (IDV) – This is the amount that you will receive if your car is irreparably damaged or stolen. It is also the value of your car used by the insurer to calculate the premium of the policy.
- No Claim Bonus (NCB) – Car insurance reimburses costs associated with the repair of your car and/or third-party vehicle in the event of an accident, mishap, theft, etc. But, what if none of this happens? Most car insurers offer a discount to car owners who don’t file a claim during a policy tenure called NCB.
- Zero Depreciation Cover – Since a car depreciates in value with time, car insurers consider depreciation while determining the claim amount. Many insurers offer a Zero Depreciation add-on that allows you to avail of the complete market value of the car in the event of total loss without depreciation.
Some common questions
Q1. Who has the cheapest car insurance? Which is the cheapest car insurance in India?
Third-party insurance covers are the cheapest car insurance in India. However, if you are opting for a comprehensive cover, then the price of car insurance will depend on a lot of factors like the Insured Declared Value (IDV), age and condition of the car, add-ons needed by you, etc. Hence, the cheapest comprehensive car insurance in India will depend upon the policy required by your car and the way you intend to use it.
Q2. Which is the best and cheapest car insurance in India?
Choosing the best car insurance policy requires a clear understanding of your insurance requirements and thorough research of the options available to you. It is important to focus on cost-efficiency as opposed to low price.