5 tips that will put you in the driver’s seat while buying vehicle cover

In today’s digitally wired world, consumers are getting more and more comfortable searching, comparing and buying products online. One such product that consumers compare and buy online is vehicle insurance.

However, insurance as a category is not well understood, and sometimes consumers end up making mistakes while buying it.

Here are a few points one must consider while buying motor insurance to avoid any issues later.

Motor insurance is mandatory for all vehicles on the road in India. Since a ‘liability only’ policy is mandated by law and ‘own damage’ is not, people often make the mistake of buying a ‘liability only’ motor insurance, which only covers against third-party death and property damage. This is the single biggest mistake that motor vehicle owners can make as it leaves them uncovered for ‘own damage’ to their vehicle. While cost is a primary concern in any buying behaviour of the customer, lowering the cost should not be the primary objective. One should look at the cost only after making sure that all the necessary features required are available in the policy. While this might mean taking a cover at a higher cost, it will serve the customer well in the long run in case of a claim.

While buying a policy, your insurer will ask you certain details — such as the year of manufacture of the vehicle, type of fuel used (CNG or LPG or petrol), any past claims and so on. Not giving the exact details may land you in trouble as the insurer may cancel the policy upon discovering the facts.

A common bad practice is to hide the past claims to derive the benefit of the No-Claim Bonus. You may hide such a claim for a while, but if the insurer eventually comes to know from their personal investigation, your NCB bonus will get cancelled straightway. Not just this, the insurer may also cancel your policy.

We sometimes tend to buy the first policy that we come across and don’t compare it with other options. Comparing vehicle insurance is very important as it makes the buying decision easier. When you have a choice of five or six plans, you tend to get lower premiums. There may be plans with better features or lower premium available. So, make sure you make a wise decision.

The reason you buy insurance is to indemnify or protect yourself in case of a natural or man-made calamity or adverse situation. Some insurance companies have a better track record when it comes to quick and timely settlement of insurance claims. Brand name helps, and research is always a good idea.

It is important to know what you are buying. So, read the policy wordings carefully to understand what you are — and are not — covered for. Make sure you are aware of the exclusions for which you will not get the claim — for example, driving under the influence of alcohol, cranking the engine in case of water logging, not having a valid licence or registration documents, and so on. If you do not have the time or don’t know enough, ask an insurance advisor or intermediary for their opinion on it.

The author is CEO of RenewBuy.com, an online insurance platform founded by industry veterans

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