Everyone thinks about the best features or the flashiest cars on the market while purchasing any. But, it is often seen that customers often forget to think about the best car insurances for securing the future of vehicles and have protection from the compensation of damages.
What is Car Insurance?
Car Insurance is a part of Vehicle Insurance, insurance for cars, trucks, motorcycles, and other motor vehicles. Its primary goal is like any other insurance, i.e., providing financial protection against any losses mentioned in the insurance contract.
Car insurances often give you protection against theft or damages caused by reasons other than traffic collisions. In many countries, it is compulsory to have your car insured before using them on public roads.
Concept of Car Insurance
Car insurances often work on a “use it or lose it” policy, and you have to pay a monthly premium to avail of it. If you don’t make use of the insurance policy for too long due to no accidents, you will lose the premium amount. Also, Insurance policies often contain no claim bonuses from 20% up to 50%, due to which you should not make insurance claims on minor damages.
Your car insurance’s value is based on the IDV of your car. IDV is the Insured Declared Value of your vehicle, which is also the maximum amount of compensation you will get in for any losses. IDV is often an amount close to the market value of your car at the time of purchase.
However, every time you renew your car after a year, the IDV for your vehicle will decrease, keeping in mind your vehicle’s depreciation rate. IDV is the sum of (Manufacturer’s listing price- depreciation) and (Accessories not included in the price- depreciation).
Benefits of a Car Insurance:
Coverage of many risks: Your car is in danger of damages from many different causes. Your vehicle may succumb to damages from natural disasters, traffic collisions, technical issues, accidents, riots, and many other reasons. Some car insurance policies also have third-party liability, so any damage to the other party is also covered.
Savings on the premium amount paid: Car insurance policies contain NCBs( No Claim Bonus). You can get discounts on the amount of premium to be paid through NCBs. You will only be eligible for a No Claim Bonus if you go through an entire year without making any claims.
Vehicle Replacement: If you pick the right insurance plan, you may even be eligible for a vehicle replacement if the damages caused to your car are far above the compensation you can receive from the policy. In this situation, the insurance policy will replace your car with a car of equivalent price.
How to Avail Car Insurance?
With some policies, you can purchase your car insurance and avail the claim online without much paperwork. Some insurance policies also provide the option of cashless garages where you can get your car serviced for free. If you choose to go to a garage outside the network of garages of your policy, the insurer will reimburse the cost of services.
It is always recommended to have a comprehensive insurance policy for your cars which will cover damages caused by multiple reasons since your car faces many risks. While choosing a car insurance, you should not undermine the IDV of your car for less premium as it will also mean less cover for damages.