Guide To Buying Car Insurance For New Car Purchase

Buying a new car is an exhilarating experience. It is a symbol of freedom, achievement and status. However, to make the best of this experience, you have to prepare for the unpredictability of the road. 

How? By getting the right car insurance to protect your 4-wheeled companion!

While buying a new car, car insurance may seem like just another legal document required to drive. However, it’s much more than that.  It is necessary to ensure financial security and best care for your car in the long term. Hence, carelessly selecting the wrong type of insurance can lead to financial stress and dissatisfaction. This is why you must weigh your options thoroughly when you purchase a car insurance plan. 

In this article, we will help you find the right car insurance policy to match your needs while buying a new car.

How To Find The Right Car Insurance?

We get it – when buying car insurance, it is tempting to base your decision solely on the premium amount. However, this approach needs to be revised. Although it is essential to consider your ability to afford premium payments, it is equally important also to consider other factors such as coverage, type of insurance, and additional benefits. 

Remember to vet all the options your dealer provides when buying a car. You can also conduct your research to compare the car insurance benefits offered by different providers. Here are some factors to take into account: 

1. Third-party or Comprehensive Cover

First, you must decide what type of insurance you need: third-party or comprehensive car insurance. 

Third-party insurance is a legal requirement and provides a basic level of financial protection. With this insurance, the policy will cover damages caused to the other party if you get into an accident. One of the leading car insurance benefits of third-party coverage is the low premium cost. Third-party liability insurance is mandatory for all drivers, while it is up to the individual to opt for an own-damage protection.

On the other hand, comprehensive car insurance provides broader coverage. It covers damages caused to your car and those caused to the other party. Comprehensive car insurance benefits include coverage against natural calamities, theft, and vandalism. 

Though the premium for comprehensive car insurance is higher than third-party insurance, it covers you against various scenarios and damages. 

2. Flexible Coverage

Another important factor to consider when choosing a car insurance plan is the flexibility that the plan provides. We have different driving styles, habits and financial needs, which means our insurance needs differ. 

Ensure the insurance you choose offers all the add-ons you are looking for. They increase the scope of your insurance plan and tailor it to your specific situation. Your car dealer might provide you with multiple bundles of car insurance plans with lucrative pricing, but remember to dive deeper and check the add-ons included in the offered plans. 

3. Important Add-ons For New Cars 

To ensure your car is fully protected, choose add-ons based on your car type, driving skills, and needs.

For regular cars, you can consider the following add-ons : 

• Zero Depreciation: Ensures you receive your full claim amount without deductions for depreciation. 
• Engine Protector: Protects your car’s engine and pays for damages caused to it. 
• Roadside Assistance: Assists in situations like flat tyres, breakdowns, and accidents. 
• Key Replacement: Pays for charges to repair or replace the car key. 

For luxury high-end cars, along with the above add-ons, you should also consider add-ons like : 

• Return to Invoice: In the case of loss or theft, the insurance pays the original invoice value of the car. 
• Consumable Cover: Pays for consumables like engine oil, brake oil, etc., that need to be replaced after an accident. 
• Loss of Personal Belongings: Covers the loss of belongings from the car. 

4. Do Not Forget The ‘No Claim Bonus (NCB)’

A no-claim bonus is a must-have car insurance benefit that discounts insurance premiums if you do not make any claims. It rewards you for driving safely. This benefit adds up over the years. After one year of no claims, you receive a 20% discount on your next premium, this increases to 50% after 5 years of no claims. Usually, the no claim bonus is valid for 90 days from the car insurance policy renewal date. So, rest assured that if you drive safely, you can get a discount on the following insurance renewal.

5. Claim Settlement Ratio (CSR)

Before you commit to an insurer, check their claim settlement ratio. This is a metric that speaks volumes of their reliability and efficiency. The ratio represents the percentage of claims the insurer has settled out of all the claims received during a year. 

The higher the claim settlement ratio, the more likely the insurer is to settle your claim.

6. Renewal Process

Check what type of renewal process the insurer offers. Car insurance online renewals are more convenient and faster. A digital process also makes reassessing and customizing your add-ons and coverage easier. For your new car, if you bought a plan without much thought applied but now realize that the insurer or policy coverage is not the right fit, feel free to compare your options while renewing. 

Key Takeaways

Picking the right car insurance requires the same diligence as selecting the right car. It is essential to balance cost with coverage quality, customer service, claim settlement efficiency, and the flexibility of the policy. Research and dive deeper to understand plan benefits, exclusions, and deductibles to avoid regretting your choice later. 

Consider platforms like PhonePe for a seamless insurance purchasing experience.