Understanding Your Car Insurance Quote

WHAT IS CAR INSURANCE

Car insurance is a safeguarding protection for damages incurred or any kind of incidents or any  accidents. It’s mandatory to provide financial safety against physical damage or injury resulting from traffic collisions and against liability that could also arise from incidents in a car. Car insurance may additionally offer financial protection against theft of the vehicle, and against damage to the car sustained from events other than traffic collisions, such as keying, weather or natural disasters, and damage sustained by colliding with stationary objects. The specific terms of car insurance vary with valid regulations in each region. If you are here and reading this, we assume you need the conviction to buy the right insurance from a good company for your car. You have to buy right automotive insurance policy for the complete protection of your precious car.

WHY IT’S SO NECESSARY

Insurance is a step that you take today, in anticipation of a calamity that can hit you tomorrow. Even though the odds of that calamity happening may be very low but that does not mean you should not be prepared for it. Think of it like the polio drops and vaccinations we subject our children to. Now, what are the odds that polio comes back full swing to our country? Low, right? But we do it to insure our children against it. And similarly, there are steps that we take to insure us and our families every now and then.

The most important factor to understand today in any kind of Car insurance policy is that it isn’t only about repairing the damage that happens to your car. Rather, it is an umbrella of services covering you, your vehicle and the third party vehicle too (in case of an accident). We do not say that accidents, thefts, calamities etc are inevitable. But they are certainly unplanned. Hence, you may be better off having a provision for such situations, through a good car insurance policy.

Why do I need a vehicle insurance?

  1. For comprehensive coverage in situations of theft, fire, earthquakes etc.
  2. For collision/accidental coverage of you and your car.

What is auto insurance?

Auto insurance is an agreement between you and your insurance company that can cover your car, damages you cause if you hit someone else, and other events. When you get car insurance, you’re buying “coverages,” which are essentially things your insurer agrees to pay for.

In a nutshell, : It’s like paying a little now to avoid potentially paying a lot later.

How does car insurance work?

When you buy insurance, your insurer or agent will ask some pretty basic questions about you and your car, and then you’ll have some options when picking coverage. All of these factors impact your price. Generally, more coverage means a higher price. Then if you have damages or something happens, you can file a “claim” with your insurer–that’s just an insurance term for asking the company to pay for something. If it’s covered, your insurer will then pay for the damages or losses up to certain limits.

Generally, more coverage means a higher price. The car owners pay a premium to an insurance company which promises to pay for the car repairs as per the terms and conditions of the policy.

Your personally out-of-pocket costs

Deductible: It’s a common misconception that if you have car insurance, you don’t ever have to pay for anything. Unfortunately, no insurer can promise that. All insurers have deductibles for a few coverages. Your deductible is simply the amount you have to pay for repairs or claims (your own out-of-pocket costs).

For example, you have a Rs.200 deductible, hit a telephone pole, and your car repairs cost Rs.2,000. You’d pay Rs.200, and your insurer would pay the rest. You can pick your deductible amount.

The higher your deductible, the more of the repair or claim cost you’ll have to take on. That means your out-of-pocket costs will be higher, but you’ll have a lower overall rate and vice versa.

How car insurance is priced

There is a simple formula to understand the car insurance premium calculation better. Premium = Own Damage Premium – (No claim bonus + discounts) + Liability Premium as Fixed by the IRDAI+ Cost of Add-ons.

Benefits of Car Insurance Premium Calculator:

  • The car insurance premium calculator is easy to use and it is calculated immediately.
  • Major advantage of a car insurance calculator tool is that it is not influenced by insurance agents who, are working towards attaining their sales targets and wants to get it fulfilled.
  • It is very convenient to be used at home also and benefit from a hassle-free and paperless policy purchase experience.
  • On the calculator tool, the variables of coverage can be changed and the premium changes accordingly. This tool is a great medium to educate people about it hence, it helps to take the best decision at the time of choosing and buying a policy.

Factors that affect the Car Insurance Price:

The premium of car insurance depends on the following factors:

  1. IDV (Insured Declared Value) of the vehicle
  2. Type and age of the vehicle
  3. No Claim Bonus (NCB)
  4. Fuel type
  5. Cubic capacity of the engine
  6. Voluntary deductible
  7. Geographical zone
  8. Age and gender of the owner-driver
  9. Profession of the owner
  10. Anti-theft device installation

A sensible choice to make after buying a car is obtaining the car insurance. Comprehensive car insurance covers and it acts as a financial safeguard against unexpected accidents on the road. A car insurance policy is mandatory in India by law and it also ensures that you and your vehicle both stay safe always.