Points to consider before buying Long-term Comprehensive Car Insurance Policy

Owning a car is a dream-come-true for most of us. With easy-to-get car loans, it is no longer difficult getting the four-wheeler of your choice, home. After the initial year of car ownership, you need to make sure that you renew your car insurance. It is one of the mandatory documents required when your car is on the road. We all understand why insurance is essential – because it is the best way to save your vehicle from unexpected accidents, theft, or even calamities.

Car insurance in India is required to be purchased from a third-party insurance provider. As a car owner, you have the choice to buy a one-year car insurance policy, as well as, long-term comprehensive car insurance policy.

What is a long-term comprehensive car insurance policy?

The Supreme Court of India passed a directive on September 1, 2018, regarding this. If you have purchased a car after September 1, 2018, you are entitled to buy the long-term comprehensive car insurance policy. You have two options to choose from –

1. 1-year own damage plus 3-years third party; and
2. 3-years own damage plus 3 years third party.

Benefits of the long-term comprehensive motor insurance policy

• Convenience – the hassle of annual renewal can be painstaking. You can avoid it smartly by choosing to buy the long-term comprehensive policy.
• Price advantage – by buying now, you will be paying for a three-year policy at the current rate. This means to say, at the present price, you will get your car insured for the coming three years. As is common knowledge that insurance companies invariably raise the policy pricing annually, you are shielded from the price hike.

Thus, buying a long-term comprehensive car insurance policy is the ideal way to drive your car hassle-free and stress-free.

Points to consider before buying a long-term motor insurance policy

Getting your car insured is definitely a wise decision. Choosing to buy a long-term comprehensive plan is being smarter. However, you do need to consider certain points meticulously before deciding if this is actually the right investment at the moment for you or not.

The factors that need to be considered are:

1. Understanding if the vehicle is going to be subjected to high risk or not

If your car needs to be driven regularly through areas that are earmarked as high-risk zones for accidents or thefts, you should certainly go in for the long-term comprehensive plan. However, if the car is generally parked in the garage or is occasionally taken out, you might settle for the one-year policy because the long-term comprehensive plan is going to block your money.

 

1. Are you planning to sell the car in the near future?

If you are, then you need to consider the fact of the matter before buying a long-term comprehensive plan. When you sell your car, you need to transfer the insurance policy to the buyer of the car. This means that the new owner will be the holder of the motor insurance policy henceforth. Even if he pays you, remember that when you buy a new car, you will have to take a new car insurance policy. This means that you are spending twice while getting paid once. If you have plans to sell off the old car now or in the near future, then, it is recommended that you should go in for a one-year insurance policy rather than the long-term comprehensive coverage. Only when you are sure that the vehicle is going to be there with you through the next three years, go in for the long-term comprehensive plan.

 

1. Consider the add-ons before investing

When you buy an insurance policy, you get to select add-ons that increase the premium amount. There are add-ons like road-side assistance or Engine protection. Your choice of the added facility should be based on facts and future planning. For example, if you are someone who drives out of town quite frequently, you should look at adding the road-side assistance feature to the policy. Similarly, if you have taken a Rider feature because you havef a colleague or a friend travelling with you every day, you need to consider it futuristically so that the payment that you make today should be truly utilized in the later years. In this example, if there is any chance to shift your job or your friend leaving town, you must reconsider this added feature.

 

1. Voluntary deductibles versus Compulsory deductibles

Compulsory deductibles are specific and pre-determined; voluntary deductibles are adjustable. When you choose the first type, your premium payment will be high and accordingly, during the claim process, there are higher chances of getting better payouts. If you choose Voluntary deductibles, the premium amount is comparatively less but the payout during the claim process is also going to be lesser.

 

1. Considering the services being offered by the insurance company

This is one of the most important aspects which needs to be considered when buying any type of motor insurance. Factors to consider include – the reputation of the insurance provider and it is the claim settlement process that to a great extent determines if you should choose the insurance company or not. The provider that offers a hassle-free process should be your first choice. You need to read through the company profile, reviews, and testimonials of customers on the brand website as well as social media sites to get a better understanding of the credibility of the company. Then there are some insurance providers that offer a stress-free porting option – change from one provider to another – while some providers act difficult.

 

1. Free value-added features

A complete study of the services being offered by each of your shortlisted insurance providers is crucial before making a decision. There are insurance companies that facilitate online interactions, while there are some that do not. There are few that offer free pick-up from the accident spot or your home whereas some charge and some do not offer any such service. Your requirement needs to match with the services being offered by the company for the correct decision.

 

Conclusion 

Use the digital medium to make well-informed decisions when considering buying a long-term comprehensive motor insurance policy.