Insurance policy purchase of new and old car-what should you know
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Whether
you own a new or an old car, you need to take an auto insurance and renew the
policy regularly before driving it on Indian roads. It is mandatory to have your
four-wheeler insured in India if you
want to drive legally. This mandate is under The Motor Vehicles Act, 1988. Neglecting
to follow this rule can land you in a legal mess. Besides, it is better to get
your vehicle insured.
Purchase
of new car insurance vs. old car insurance
Comprehensive
policy or third-party policy- which one to purchase?
A
third-party policy is simple and compulsory. It does not provide own damage
cover against theft, fire, or other disasters. However, a comprehensive policy comprises
of the mandatory cover as well as extends own damage cover. New cars are prone
to theft, so a comprehensive plan is appropriate, but expensive. You have to consider
whether you wish to spend funds for extra protection or spend less money and buy
the basic cover?
If
you register no claims during the policy term, car insurance premium for
insuring an old car will be low due to the accrued No Claim Bonus, a discount
for not filing any claim. Also, premium for older car is less compared to a new
car due to its low Insured Declared Value.
If
you have a new car, you should go for a comprehensive new four-wheeler
insurance to get full coverage. If you have two cars, you can opt for a Third-party
Liability plan for the older car if it is used less and choose a Comprehensive
new insurance plan for the newly-purchased car.
Choosing
appropriate add-ons
Keep
in mind that you cannot purchase add-ons with a third-party policy. You need to
purchase a comprehensive plan for purchasing add-ons. Think of them as additional plans that can be included
to a comprehensive base plan.
Add-ons
are based on the age and usage of the car. For instance, it is recommended to go
for a zero-depriciation add-on if it is new four-wheeler as it removes the
depreciation aspect while settling claims. Such a cover might be unavailable
for old cars.
Similarly,
it is not wise to pay premium for passenger cover add-on if you travel in your four-wheeler
solo. Old vehicles tend to have issues, so roadside assistance add-on seems helpful.
Understand
the car usage
Before
sitting down to compare car insurance online, understand what is the usage of
the vehicle. Also, ask the following question:
·
Is the car for everyday
commute?
·
Are you going to
use the vehicle for long rides regularly?
·
Do your go for
road trips often?
·
Do you own another
four-wheeleer?
·
Who is going to
drive the car?
·
Is the car for
personal travel or other passengers are also going to be seated in it?
·
Have you been
involved in a car accident?
·
Is your geographical
are vulnerable to floods?
·
Is your locality
vulnerable to car theft?
Make
a note of your answers to the above questions and any other related queries
that might come in your head. Base on the answer go with the coverage that is the
appropriate one.
Buy
car insurance online
You
can buy car insurance policy online for a new as well as an old car. It only
takes few minutes to buy or renew them online. In some cases, the insurance provider
might want to examine your four-wheeler if a substantial time has passed after
the lapse of the policy.
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