A detailed guide on car insurance

by Radhika Adsule Financial Expert

When you buy a four-wheeler, you need to buy a good insurance policy. Four-wheeler insurance is compulsory under the Motor Vehicle Act of 1988. Driving without a valid insurance plan results in many legal and financial issues, including penalties, serving a prison term, or both. You need a car policy that offers broad coverage such as accidental coverage to hospitalisation, vehicle damage to car theft coverages.

Here is a detailed guide on buying car insurance online.

Types of policies and coverages offered

The most crucial aspect of buying insurance begins with understanding its types. There are two types of policies to choose from:

Limited liability policy

This one is beneficial for third-party assets and people injured or damaged in an accident. The premiums for limited liability policies are generally low. Under this, the coverages offered include:

An accident leading to hospitalisation of the third-party person
Temporary or permanent disablement endured by third-party resulting from the accident
The accidental death of the third-party person
Damages caused to third-party vehicle or property

All owners must invest in such a policy under the Motor Vehicle Act, 1988.

Comprehensive insurance policy

Here, both the policyholder and third-party people are beneficiaries under the comprehensive car insurance policy. While the premiums for these are usually high, you get a wide range of coverage under which it includes:

Damages resulting from natural calamities like earthquakes, floods, tsunamis, cyclones, etc.
Coverage for loss of the vehicle due to the calamities mentioned.
Damages resulting from human-made calamities like vehicle theft, vandalism, riots, strikes, and terrorist activities.

The comprehensive plan offers coverages more than the third-party policies.

Factors deciding insurance premiums

Your car policy also includes factors that decide the insurance premium you pay. They are:

The car make, model, and size of the vehicle. The engine or cubic capacity of the four-wheeler.
The geographical location of where you stay is flood-prone, theft-prone, or conflict-prone.
Your claim record during car insurance renewal.
Your age and marital status.
Your driving history.

How to buy them online?

The other crucial aspect is buying car insurance online. You could also approach your insurance agent offline. But to buy them online, the following are the steps:

Compare different insurers based on their market reputation, service availability, claim settlement ratio, and consumer reviews.
Finalise the insurer and visit their portal.
Compare the policies offered and select the one that fits your budget.
Choose the necessary add-ons.
Pay the premium through net banking, mobile banking, credit or debit cards, or digital wallets.
You get the policy agreement on your email ID and post as well.

Remember, always have a copy of the insurance in your vehicle.