That gleaming new Tata Nexon or Hyundai Venue on your porch marks an important achievement. However, alongside the joy of your prized possession comes the important responsibility of adequately protecting it against misfortunes.
As new owners unfamiliar with the intricate world of insurance policies, providing optimal safeguards for your asset can seem daunting. To help simplify this crucial purchase decision, we clarify the top 5 tips:
1. Comprehensive Insurance is a Must
The Motor Vehicles Act in India requires all vehicles to have basic third-party liability coverage to compensate external parties for losses caused by your car in accidents. However, this does NOT shield your vehicle from damage risks.
Hence, complementing the legal minimum third-party policy with a Comprehensive Insurance plan is strongly advised. This all-encompassing coverage protects against both liabilities to others as well as wide-ranging own damage risks, including:
· Accidents - Covers repair bills for your Nexon, Venue, etc. after crashes
· Thefts - Protects against loss/damage during break-ins
· Disasters - Mitigates loss from floods, storms, etc.
· Fire - Shields against damage arising due to explosions, arson, etc.
· Transit - Insures against mishaps when relocating vehicles
· Vandalism - Even malicious damage by external elements gets covered
So with a Comprehensive policy, your precious new Tata Nexon, Hyundai Venue and other beloved vehicles get an insurance blanket against both third-party liabilities as well as extensive damage risks beyond your control. Pay slightly increased premiums but safeguard lakhs of rupees of assets.
2. Fix Insured Declared Value (IDV) Appropriately
IDV signifies the current prevalent market value of your vehicle. When getting insurance coverage for your new Tata Nexon or Hyundai Venue , precisely stating the total invoice price paid as the Insured Declared Value (IDV) holds significance.This invoice value factors in ex-showroom cost along with registration charges, road tax, insurance, etc., to reflect the full on-road price paid.
Fixing significantly lower IDVs might reduce the premium payable initially. However, when it actually comes time for Total Loss or Theft settlements, you will only receive the declared IDV amount. So accurately declare values instead of underestimating to minimise future shortfalls.
On the other hand, inflating IDVs will unnecessarily spike premiums payable. Strike an optimal balance so IDV reflects current market values without errors in either direction.
3. Evaluate Pros & Cons of Voluntary Deductibles
Deductible signifies the predefined out-of-pocket amount you pay before receiving claim reimbursements from insurers. Higher voluntary deductibles chosen allow for lowering policy premiums but reduce final payout eligibility.
For instance, opting for a ₹10,000 deductible might lower the annual premium by ₹2000-₹3000 over a standard ₹1000 slab. But in case of accidents, you must bear ₹10,000 expenses before receiving compensation as opposed to just ₹1000.
Carefully analyse asset value at risk, typical repair bills based on vehicle category, past claim history if renewing policy, plus annual premium constraints. This showdown helps finalise appropriate deductibles tailored to needs instead of unquestioningly maximising to reduce premium payouts at the cost of self-exposure later during claims.
4. Wisely Handpick Optional Add-On Covers
Comprehensive motor policies allow bolting on supplementary optional add-on covers to address specific requirements by enhancing protective scope. Key offerings include:
· Zero Depreciation Cover - Waives depreciation deductions towards replaced parts affected by covered incidents
· Engine Protector - Shields expensive powertrain components from breakdown risks
· Return to Invoice - Pays entire ex-showroom amount for Total Loss or Theft Relief.
· NCB Protection Cover - Retains accrued No Claim Bonus discounts despite filing claims
· Key Replacement Cover - Pays for replacing vehicle keys and recoding locks.
Evaluate each rider and associated premium costs, keeping your actual usage patterns, value-at-risk, claim possibilities, etc., in perspective before opting to customise coverage scopes. Avoid selection overdose by adding aspects prudently instead of targeting blanket maximisation at steep cumulative premium costs. Carefully determine which add-ons deliver the greatest relevance without overspending.
5. Opt for Reputable Insurers
When buying insurance for your new car, always opt for policies from leading and reputable insurance companies instead of lesser-known players.
Even if smaller insurers offer cheaper premiums initially, choose reliable big brands that have a proven track record of smooth customer service, hassle-free claim processing and a culture of paying out dues ethically.
Directly purchase insurance only from established companies instead of middlemen offering policies of unrecognised insurers. This reduces risks of future disputes or delays in claim settlements, which is the last thing you want after accidents, thefts or other contingencies with your precious new car on the line.
Secure Your Asset's Future
Your new vehicle is a valuable asset and a symbol of your aspirations. Ensuring its smooth ownership journey by insuring it suitably is integral. As a new owner unfamiliar with the nuances of insurance policies, arriving at optimal solutions protecting your prized possession can seem daunting. Follow this breakeven analysis framework for making prudent choices to mitigate wide-ranging risks at optimal economics adequately.
