5 Important Factors to Consider While Buying Online Car Insurance

5 Important Factors to Consider While Buying Online Car Insurance


Purchasing car insurance policy online saves time and gives the option to compare plans from different insurance companies. Here are some crucial things to consider while buying an online insurance policy for a car. The Internet has changed the way the insurance industry operates. While purchasing or renewing car insurance online is convenient, it’s possible to overlook some of the critical aspects.

Here are some of the crucial factors to consider while buying an insurance policy online:

1 Type of Insurance Policy: 

Every vehicle insurance policy falls under one of the following two categories:

  Third-Party Cover:According to the Indian Motor Vehicles Act 1988, third-party insurance is mandatory for all car owners. A third-party insurance policy does not cover your car, but it covers the damages caused to another person or his/her property.

  Comprehensive Cover:Besides covering the loss to the third party in an accident, a comprehensive plan provides wider coverage (as compared to TP Only insurance policy, based on the the coverages opted for) of your car. It also provides coverage against any damage due to theft or accident.

2 Insured Declared Value (IDV) and Premium Cost

Insured Declared Value (IDV), defines the maximum liability of the insurer for your car. In case of a total loss, the insurance company will reimburse an amount equal to the IDV value of your car. Naturally, the larger the IDV, the more will be the compensation. However, do note for IDV it should be as per the depreciation set by the IRDAI.

The premium cost depends on several factors like the car’s engine capacity, the type of insurance plan, the local tax of your city, set IDV, add-ons chosen, etc.

3 No Claim Bonus (NCB):

If you do not make any claim throughout the year, most insurance companies offer you a No-Claim Bonus while renewing your policy. Providing NCB is a way of rewarding the policyholders in the insurance business. The NCB usually starts at 20% and can go up to 50% (for all consecutive years). The percentage increasing with every claim-free year. In case of any claim if made, will subject to drop the value of NCB, and will be calculated from zero.

4 The Reputation of the Insurer

To ensure proper service, check the image of the insurance company in the market before buying online car insurance. The claim settlement ratio indicates how efficient a company is in settling accident-related claims.

A well-reputed insurance provider will have a good track record in settling the claims in a timely fashion. Online reviews and feedback from other policyholders of the insurance company is another smart way to get an idea about its image in the market.

5 Add-on Covers

In addition to the basic plan, insurance companies offer several add-on features. For example, Roadside Assistance feature can be helpful if your car breaks down in the middle of nowhere.

Similarly, you can choose from other optional features like zero-dept, engine protection, etc. as per your requirements. However, as you add these features, the premium amount will increase as well.

Buying the Best Insurance Policy for your Car

Selecting your car insurance online gives you the flexibility to compare different policies. By paying attention to the finer details and a bit of research, you might be able to get the best insurance policy for your car. Hopefully, the tips mentioned above will help you in making an informed decision.

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