How Much Car Insurance Do I Really Need

The new year brings new beginnings. Many people in India consider buying a new car at the beginning of the year. If you too have purchased a new vehicle in 2021, you must be probably looking for an adequate car insurance plan. 

When it comes to car insurance in India, the coverage requirements, affordability, and options available in the market are different for different drivers. If you want to understand how much car insurance you need, you first have to evaluate your existing situation, weigh your available options, and then make an informed decision.

So, before you proceed to take a car insurance online quote, follow the steps given below.

  • List down the coverage you need.

Instead of blindly researching on several car insurance plans online, list down your requirements from the coverage. Usually, people are tempted to buy the cheapest car insurance plan available out there. 

But know that cheap is not always the best. When it comes to car insurance, it is best to invest in a policy that is affordable and offers extensive benefits at its best. You can use the car insurance calculator to determine the cost of the policy based on your desired coverage and add-on covers. 

  • Understand the exclusions in the coverage.

Much like any insurance policy, car insurance plans have certain limitations. Just like how you would go about the kind of coverage the policy offers, it is essential to understand the exclusions in the policy as well. Some of the common car insurance exclusions are as follows:

  • The policy does not cover loss/damage due to wear and tear.
  • Any damage to tyres, electrical equipment, or electrical components is not covered. You can consider buying an add-on cover that covers damage expenses for the same. 
  • Damage to the vehicle or third-party property/person when under the influence of intoxicants is not covered.
  • Damage to the vehicle due to war-like situations is not covered.

Knowing these exclusions will help you make an informed financial decision. Besides, you will be able to raise a successful claim request in the future (if needed).

  • Consider the deductible limits.
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For those who are unaware of the car insurance deductible, it is nothing but the amount you (the policyholder) is liable to pay before the insurer settles the claim amount. Most car insurance plans available in the market have a deductible clause in the paperwork. 

Make sure that you are reading the policy terms and conditions carefully before signing it. If your policy mentions deductibles as mandatory, then you have to determine how much amount you are willing to pay from your pocket when a claim is raised in the future. 

Also, note that due to deductible, your car insurance premiums are reduced. In general, the higher the deductible amount is, the lower your car insurance premiums will be. But again, be mindful when determining this amount as when the claim is raised on your car insurance plan in the future, you will be liable to pay the deductible amount from your pocket. 

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