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Whenever we talk about car insurance, the phrase that comes in our mind is – ‘Protect yourself and others’. Owning a car has become a necessity due to the benefits that it brings to us. With higher disposable incomes, most people in India can afford a four-wheeler, sometimes even multiple vehicles.

While having a car is important, it is equally important to purchase a car insurance policy. While many people in India purchase car insurance due to the mandate of the government, it is an important way to keep ourselves and others safe from unexpected occurrences. 

In this technological age, how can you purchase a car insurance policy online that suits your needs? Well, you can make use of the online websites and mobile applications to make the right choice while selecting a four-wheeler insurance policy. Before we understand the steps of how to purchase car insurance online, we need to understand the various factors that determine the price of the car insurance premium.

Factors that determine car insurance price

#1 Car Type & Purpose

The model of your car, its safety features, engine capacity, etc. have a bearing on the premium charged by the insurance company. Cars of higher value have higher premiums and diesel cars charge higher premiums than petrol or CNG vehicles. At the same time, if you are using your car for commercial purposes, then the premium charges would be higher than the private vehicles.

#2 Age of your car

The date when the car was manufactured is another factor that determines the premium of the car. Newer cars have higher IDV, which reduces over time, while the premium increases. This means that you spend more on insurance as your car gets old.

#3 Personal Driving History

The driving record of an individual is another determinant of car insurance premiums. If the driver has a record of rash driving or driving under the influence of alcohol, etc., the insurance company charges a higher premium. Hence, it is recommended to maintain a clean driving record.

#4 Insurance Zones 

IRDAI has divided the country into zones that are determined by the rate of accidents, thefts, etc. in that particular location. If your car is insured in an urban location, then the insurance premium will be higher than rural areas, which fall into zones that have lesser premiums.

#5 Add-on covers and riders:

The premium of your car insurance also depends on the add-on covers and riders that you choose for your policy. These riders, while beneficial, can increase the premium, and hence it is important to research and study to know which cover is important for you.

Now that we know all the different aspects that impact a car insurance policy, it is important to check out the prices from different insurance companies in India.

Table of Car Insurance Prices

The below table shows a list of car insurance companies and the prices that they charge for insuring a TATA Nexon AMT 1.2 Revotron:

Company

Insured Declared Value (IDV)*

Zero Depreciation (Add-on)

Estimated Car Insurance Premium

New India Assurance

6,42,960

-

13,756

Oriental Insurance

6,48,090

2,234

18,045

Digit

6,55,857

2,623

18,078

Universal Sompo General Insurance

6,23,065

3,738

19,408

HDFC ERGO

7,49,078

8,989

26,171

*Year of registration is 2019 and the place of registration in Delhi

If you look at the above table, you will notice a list of insurance companies and the policies that they offer to their potential customers. To purchase a policy, you need to enter a few details such as the car make, model and variant, year of manufacture, claims submitted, etc. which will help the insurance company to get the best-suited insurance policy for you. You will also have the option of adding any riders or add-on covers to increase the level of coverage. 

How online comparison can lead you to buy cheap car insurance?

Most of the time, buying a low premium policy will seem attractive, but sometimes it may not be adequate for our needs and may not give the protection or cover when we need it the most.

Any car that is driven on the road, irrespective of its price or the driver’s financial background, can cause risks that may impose a great deal of financial burden on the family. Hence, we need to buy car insurance that is not only cheap but provides comprehensive coverage as well. 

Many people make the mistake of directly visiting a car insurance company’s website and try to search different plans and policies offered by them. This can be an ineffective method, as many people will miss out on some other insurance companies and the offers and benefits that they provide. In this scenario, web aggregators will help. These aggregators compile and provide information about various insurance companies on their website in a way where consumers can easily compare the policies, their benefits, and their premiums. Online comparison helps in the following ways:

#1 To understand the type of policy:

The type of insurance that you avail has a direct bearing on your claim settlement. When you compare insurance policies online, you can clearly ascertain the types of policies that insurance companies provide, and can take an informed opinion on it. Usually, insurers provide the following three types:

  • Comprehensive Car Insurance, which covers the damages done to your car as well as to the third-party impacted by the accident. 
  • Third-Party Car Insurance, where the policy will only cover the death, disability, injury, or property damage to the third-party involved in the accident, and will absolve you of any legal liability. If any damage occurs to you or your vehicle, you need to bear your expenses for it. 
  • Pay as you Drive Insurance, where the premium payment is decided based on the kilometers driven. You can read more about this ‘usage-based-insurance plan’ in this article.

#2 To check the claim ratio

When you compare policies online, you get a holistic picture of the insurance companies by looking at their claim settlement ratio. This is an important parameter that helps you understand the reliability of your insurer in paying the claims. It is recommended that you select a car insurance policy from companies that have a higher incurred claim ratio, which means that there are more chances of your car claim being settled without much interference. 

#3 To increase cover at minimum cost 

With online comparison, you can even increase your cover by adding add-ons and riders at minimum cost. In fact, you can even compare the cost of add-ons as well. These add-on covers provide an additional layer of protection to our existing policy and will help us keep our cars safe from dangers not covered by our policy. Some of these add-on covers are: 

  • No Claim Bonus Protection Cover
  • Engine Protection Cover
  • Zero Depreciation Cover
  • Consumables Cover
  • Key Protection Cover
  • Daily Allowance Benefit

#4 To understand and check the IDV

When you compare insurance policies online, you can view all the IDVs of the insurers, which is an indication of the actual cover you will get for your vehicle. While a cheaper premium looks good to the eyes, the IDV that it provides is the important thing that determines the compensation that you will get through your claim.

Why choose PolicyX.com to buy a cheap insurance policy?

PolicyX.com was established in 2013 and is approved by the IRDAI. It uses a complex algorithm to help customers search, compare, and select a suitable insurance policy for their needs. More than 8 million visitors use it every year to compare more than 100 plans across 24 insurance companies. Apart from searching quotes, it also provides guidance on health, life, travel, and motor insurance policies.

As of 2020, PolicyX.com has more than 100,000 customers and its user-friendly dashboard is designed to help you compare easily, save time, and buy the most affordable policy for your four-wheeler. The advantages of purchasing car insurance through an aggregator like PolicyX.com are: 

  • Savings of more than 50%
  • Avail add-on covers at minimal costs
  • Fewer documents required
  • Hassle-free renewal

Nowadays, mobile applications are gaining a lot of attraction in this digital age. This means that you can purchase car insurance not only from your homes but while you are on-the-go too. Apart from PolicyX.com’s website, you can also use the PolicyX.com mobile app (for Android users) to purchase and renew car insurance policies.

Conclusion

Risk and damage to your car or your life can bring irreparable financial damage to your standard of living. To reduce the risks, and ensure a suitable and affordable financial cover, you must research well before selecting the right car insurance policy. With all the new products and services being launched, you can be sure that you will get the best and the cheapest policy to give you a worry-free ride.

Naval Goel is the founder of PolicyX.com. He is an Associate Member of the Indian Institute of Insurance`, Pune. He has been authorized by IRDA to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
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