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Buying a new car is an exciting experience, isn’t it? But it also comes with the additional responsibility of ensuring your car is well-protected and insured. Advancements in technology have now made the process of acquiring car insurance more advanced, accessible and simplified over the years. At Elephant.in, customers can compare and purchase car insurance plans online in just 3 easy steps.

Nonetheless, you need to keep certain factors in mind while insuring your car. In this blog, we will cover some of these points.

What Are the Different Types of Car Insurance in India?

Selecting the best car insurance when buying a new car may seem complicated. With numerous coverages available, it is important to make a choice that is informed and reflective of all your requirements.

  • Third-Party Liability Insurance: It helps in covering the costs when one injures someone or damages someone’s property in the event of an accident. In India, the Motor Vehicles Act of 1988 has made it compulsory for all motorised vehicles to have third-party liability insurance.
  • Own Damage (OD) Insurance: This type of insurance is useful in case of damages caused to your car by natural calamities like storms, earthquakes, floods etc. or man-made disasters like riots, vandalism or theft. They cover damages that a third-party liability won’t cover. Bear in mind that while OD insurance may not be mandatory under Indian motor laws, it can only be purchased along with third-party liability car insurance.
  • Comprehensive Car Insurance: It is an all-around car insurance policy that covers you from third-party damages along with protection against damages caused to one’s vehicle due to accidents, natural disasters, theft or vandalism. Along with that it also covers the costs of hospitalisation for the driver and/or passenger, towing charges, and personal accidents.

Often, low-cost car insurance policies offer coverage only for third-party liabilities. That means in the event of an accident, the insurer will only cover property damages or physical injury or death to the third party. Damages to your vehicle and yourself will have to be borne by you.

That’s why it is always recommended to buy a Comprehensive Car Insurance Policy, which offers coverage for own damages, in addition to third-party liabilities. It may seem to be a little more costly, but it will prove to be helpful in the event of an accident.

Various Factors Affecting Insurance Costs

The cost of insurance for new car purchase can vary significantly depending on numerous factors:

  • Vehicle Type: The make, model, and age of your car influence premiums. High-end and newer vehicles often cost more to insure.
  • Driving History: Your driving record, including accidents and traffic violations, affects rates. Safe car owners typically pay less.
  • Coverage Limits: The amount of coverage you choose impacts costs. Higher coverage limits result in higher premiums.
  • Deductible Amount: A higher deductible means lower premiums, but you pay more out of pocket in case of a claim.
  • Location of RTO: The location of the Regional Transport Office (RTO) where the vehicle is registered also affects the insurance costs. Insurance providers consider your car’s registration location as one of the key factors when determining your premium.

Understanding the Legal Requirements

The legal requirements for car insurance in India are governed by the Motor Vehicles Act of 1988. According to the act, Third-Party Liability Insurance is a mandatory requisite for all vehicle owners. This coverage protects one against legal liabilities that arise from causing damage or injuries to third-party individuals/property in case of an accident. Personal accident cover, which is included along with the mandatory third-party liability insurance, provides coverage to cover the costs of bodily injuries or death of the vehicle owner or driver.

Consider Additional Coverage

Third-party liability insurance doesn’t cover own damages. While the Comprehensive Plan safeguards your car, it may overlook certain liabilities like depreciation, engine damage, consumables repair costs, and roadside breakdowns. It is better to have additional coverage plans under you to make everything even more safe under additional protection policies. They are referred to as “add-ons” and some of these are:

  • Roadside Assistance Cover
  • Zero Depreciation Cover
  • Engine Protection Cover
  • Return to Invoice (RTI) Cover
  • No Claim Bonus (NCB) Protection
  • Personal Accident Cover for Passengers

Assess Your Voluntary Deductible

A deductible is a part of the claim and is the amount the policyholder pays before the insurance company takes responsibility for the claim. There are two types of deductibles in car insurance namely– Compulsory and Voluntary Deductible. The compulsory deductible is an amount that is fixed by the insurer and has to be paid mandatorily by the policyholder whenever a claim arises. Voluntary deductible is the amount that is chosen by the policyholder to meet a part of the claim from his own pocket before raising it to the insurer which is not mandatory. In the case of voluntary deductible, the higher the deductible, the lower the premiums one pays.

One must plan out their finances and decide how much one can comfortably afford in the event of a claim.

Check for Discounts

Did you know installing a government-approved anti-theft device in your car can reduce your car insurance premium by a considerable amount? Additionally, being a valid and recognized member of the Automobile Associations can also earn you a 5% discount on the own damage section of the premium. To find out which reductions you might qualify for, check with your insurance provider.

Can You Buy Insurance for a New Car from Outside?

When purchasing a brand-new vehicle from a  car dealership, you might be offered the option to get the insurance for the new car purchase right then and there. However, you can explore and select car insurance providers of your choice as long as they offer their insurance services in India. You may purchase your car insurance from Elephant.in regardless of where you purchased your vehicle from.

Conclusion

Purchasing auto insurance at the time of a new automobile purchase is crucial for safeguarding your financial investment and guaranteeing your safety while driving. By considering extra coverage, comparing costs, and being aware of your legal requirements, you may select the insurance policy that best suits your needs and budget. Getting into the world of insurance can get complicated, but with the presence of Elephant Insurance, no more! We have leading insurance experts who can help guide you through the entire process, email us at support@elephant.in  and get in touch with Elephant Car Insurance!

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.| EL/BLOGS/23-24/09

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