Buying a new car is an exciting experience. Not just the purchase, but the entire process is eventful. With countless car brochures to skim through, test drives are essential for buying a car. In addition, the vehicle you buy must be based on your requirements. For instance, your primary purpose of this new car is for long-range touring, while you might have another vehicle for city commutes. With the right vehicle zeroed down upon, the next step is buying a suitable car insurance cover. There is no bypassing purchasing a cover.
With the various jargon used in defining the policy terms and features, it is often a perplexing decision akin to selecting the best-suited car. However, once you are familiar with these terminologies, it becomes a prudent policy choice.
There are essentially two types of policies—third-party plans or comprehensive policies—that can be purchased. A third-party goal is the bare minimum one needs to buy as required by the law, the Motor Vehicles Act of 1988. But due to its limited policy scope, a comprehensive plan is preferred. A complete policy has three components, a third-party cover, own-damage cover, and a personal accident cover. This policy provides 360-degree coverage against various perils like damages, theft, and natural threats.
One of the many terms you might encounter in car insurance plans is deductibles. They are an out-of-pocket expense that the policyholder, i.e., you need to pay before the insurance coverage kicks in. Deductibles are divided into two types – Compulsory and Voluntary deductibles.
As the name suggests, the compulsory deductible is a mandatory type of deductible. All car insurance policies have a compulsory deductible as a part of their policy terms. The required deductible is defined by the regulator, the Insurance Regulatory and Development Authority of India, IRDAI. The regulator represents this amount based on the engine capacity of the vehicle. For four-wheelers or cars, the deductible amount is set at ₹1,000 for vehicles equal to and below 1500 CC, whereas the same is ₹2,000 for vehicles above 1500 CC. In addition, the insurance company may charge a higher deductible for older cars. * Standard T&C Apply
The other type of deductible is the voluntary deductible. This is an optional deductible that can be opted by you in addition to the mandatory deductible. Depending on your assessment of the risk to your car, this amount can be selected by you. Since it is an additional out-of-pocket expense that you undertake to pay at the time of claim, it ends up lowering your premium amount. It serves as an effective way to lowerbut increases the amount you will be required to pay during the claim. So, make sure to select this amount after assessing whether you can bear such additional expenditure. * Standard T&C Apply
When selecting a voluntary deductible, remember it lowers the premium in the short run but ends up increasing your liability during a claim. How much voluntary deductible you must select can be decided after using the read the sales brochure/policy wording carefully before concluding a sale.. Please note, insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please