Best Practices for Finding an Affordable Car Insurance Online – 2024 Guide

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Elevating petrol and diesel prices in India are affecting the car cost and its maintenance. Therefore, it becomes mandatory to look for ways of cost-cutting in other related areas of the car. One way to do this is to opt for affordable car insurance.

There are many best car insurance online in India but opting for the most suitable one is challenging. Here, we are discussing some of the factors that affect the cost of car insurance and the best practices that you should follow to get an affordable car insurance policy online:

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  • Know the type of car insurance: There are two types of car insurance plans available – Third-Party Insurance and Comprehensive Insurance. Therefore, you must know the type of car insurance plan that you need. If the reason to purchase a car insurance plan is following the law only, then go for a third-party insurance plan. This is because it only covers the third-party if it gets damaged by your vehicle and it does not cover your car. This is why a third-party car insurance policy is cheaper. On the other hand, a comprehensive plan is one that provides third-party cover and covers for your vehicle against damage and loss. While the cost of third-party insurance is decided by the government, the cost of comprehensive car insurance is decided by the insurer and depends on the coverage you opt for. So, it is your responsibility to know the type of cover you want.
  • Factors that Affect the Car Insurance Premium:

The factors that affect the premium of car insurance are:

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    • Claim History: If you claim for your car insurance, then the premium goes up for the coming year. 
    • Type of Vehicle: The make, model, cubic capacity, and fuel type, etc affect the premium of your vehicle. Commercial vehicles and Sports Utility Vehicles (SUV) most of the time attract a higher premium because the insurance providers get a large number of claims for these vehicles. The diesel cars generally have 10 – 15% higher premiums than petrol vehicles.
    • Insured Declared Value (IDV): The IDV plays a major role at the time of policy renewal. This is because at the time of policy renewal the vehicle’s age and its depreciation majorly determine the rate of premium that you have to pay. For the calculation of IDV for the vehicles that are not more than five years, the years for which the car is being used is applied to its ex-showroom price. For all the vehicles that are more than five years old, the market value is considered as IDV.
    • The Location of the Car Owner: This means the area from where you get the registration of your car. The premium is high for urban areas, densely populated areas, or near highways. If the cases of theft are high in the area where you live, then premiums can be high.
    • Related to Driver of the Car: The profession and age of the driver also decide the premium of the car. If a car is driven by multiple drivers, then its premium is high.
  • How to Reduce the Premium of Your Vehicle:

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    • No Claim Bonus (NCB): For each claim-free year, the insurance company pays a bonus. This is the reward by the insurer for good driving. By using this bonus, you can reduce the premium of your policy of up to 50%, if you do not claim the insurance for your car. Moreover, you can transfer your NCB to your new insurance plan in case you sell your old vehicle, and hence you can avail of the low premium as well.
    • Voluntary Excesses: The excesses or deductibles are the amounts over which the claim is paid by the insurer. If you pay for the petty damages in your car from your pocket, you can easily reduce the premium cost up to 30%.
    • Discount on the Security Features: Some cars come with security features that are built-in like immobilizers and anti-theft alarm. The cars having these features have a low probability of theft. Therefore, these cars have a low premium. However, only the devices that are approved by the Automotive Research Association of India (ARAI) get a discount of 2.5% over the premium.
    • Purchase a Policy Online: Buying a car insurance policy online reduces its cost because it removes the cost of middle-men. There are many insurance web aggregators where you can compare different insurance policies as per your requirement and can get the best car insurance online in India.
  • The Riders that Increase the Premium but Are Useful:

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    • Personal Cover: A basic comprehensive insurance plan includes personal accident cover for the car’s owner. However, in a small amount, you can get the personal insurance cover for the additional drivers of the car who have a driving license. With a small fee, they can as well be covered in the same insurance policy. Many insurance providers by default provide this cover in their comprehensive plan. 
    • Nil-depreciation: For plastic and rubber parts, a nil-depreciation policy provides coverage. Most of the time, an insurance provider offers only 50% coverage of these parts which are subject to wear and tear. However, it is good to have nil-depreciation cover as even 50% from the pocket can cost too much to you in case of damage to any of the plastic or rubber parts of the car.   
  • Points Where You May Go Wrong in Selecting an Affordable Cover:

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      • Car Value: For lower premiums, people sometimes go for lower IDV. In such a case, if an accident happens, then the car can be treated as a complete write-off. However, it is not a good practice and should be avoided.
    • Policy Lapse: Avoid insuring your vehicle after its policy lapses. After the insurance policy lapse, the insurance provider may offer you a grace period of one week and insuring your car insurance even after this may waive off the insurance discounts.

Summing it Up!

The final thought at this stage while buying the best car insurance in India online is finding the balance between policy’s cost and the coverage it is providing. The word which we are focusing the most at this point is ‘affordable’, it should be looked in a way of getting the appropriate insurance cover at a quite reasonable cost. It should not mean cheap; it must mean wide coverage at the best cost. By doing the same, you can insure your vehicle against various risks without spending much.