In this article, you will find some important auto insurance tips that a first-time buyer must know. But before that, let’s know about the importance of having auto insurance.

Planning to buy your first new vehicle? That’s great! While planning your vehicle, auto insurance might be the last thing on your mind. But it is the most important thing. Having a third party auto insurance is made mandatory by the Motor Tribunal of India.

The insurance provider will help you in the case of accidental damages to your vehicle. The insurer whose auto-insurance policy you have purchased will pay for the damages caused to your vehicle. Our auto insurance tips will tell this in detail.

As a charge, you have to pay the company an annual premium timely to receive the insurance benefit. But, as the result, it will help you in paying the expenditure you would have to face if you have an uninsured vehicle.

In easy words, you pay the company to bear your financial aid whenever your vehicle met with an accident, thus reducing your financial burden.

Types of Auto Insurance

There are two types of vehicle insurance policies

Third-party Insurance: It is a mandatory insurance policy made by the Motor Vehicle Act of 1988 that is essential to be purchased with the purchase of an automobile.

Comprehensive Insurance Policy: Covers against own-damages and the total loss of or damage to your vehicle. It can be caused by theft, accident, explosion, fire, lightning, self-ignition, strikes, riots, natural calamities, or acts of terrorism.

Some top Auto Insurance Tips For first-time buyers

The following pointers include some valuable insurance tips-

  1. Do some research work- as you are a first-time insurance buyer. You should know all the available details of the insurance policies. Find out a suitable source online to view and compare policy deals based on several parameters like low premium cost, coverage, additional benefits, claim settlement ratio, etc. Estimate your car insurance premium using the online calculator. This helps to find your policy most easily and quickly to match your requirement to the policy you need.
  2. Knowing What’s Best

    The three most important insurance claim ratios you really required to understand are:

    • Claim Settlement Ratio
       number of claims settled / number of reported claims + remaining claims at the beginning of the year – remaining claims at the end of year = claim settlement ratio
    • Claims Repudiation Ratio
      Rejected claims / total claims = claims repudiation ratio percentage
    • Claims Pending Ratio
      Outstanding claims / total claims = claims pending ratio percentage claims data helps in analyzing the insurance company’s claim history and its handling process. remember that relatively new companies in the market will have a low settlement ratio as claims that early could mean fake.
  3.  Understand What You Buy

    The insurance policy document acts as a legal contract that contains technical terms that are hard to understand.

    A deep study of the document before signing the document is necessary if you want to resist future confusion. The following must be your policy document checklist:

    • What is the coverage, what is included or excluded, and what are the limitations
    • term period of insurance with exact dates
    • the premium you’ll need pay for this coverage
    • the process to file a claim or report a loss

    Meet an insurance advisor to explain the various types of car insurance, terms, and conditions of insurance. He will give you some valuable auto insurance tips.

  4. Periodic Evaluation of Vehicle

    Your insurance needs periodic evaluation. Some points that require a change to your existing insurance policy are if you are:

    • getting married or divorced
    • starting a family
    • making a major purchase like a car or a house, etc.
    • becoming self-employed or re-employing
    • alteration in business
    • change in income substantially
    • You are taking care of your aging dependent
  5. A Quick issue of Insurance Coverage And Policy

    One major factor that you must keep in at the time of selecting a car insurance provider is how speedily it can provide you with the insurance claim. Today’s technological advancement has made quick services possible.

  6.  Customer Service and Helpline

    This is also considered an important factor to look into a company when buying car insurance. Once you buy insurance, the customer support comes into play for all your future worries regarding your insurance policy.

    The feedback of other users will provide more information about how efficient the customer support of a company is. You can research online reviews or ask your belongings who are previous users about the customer services of various companies. Also, make a check of the 24×7 customer helpline service which would help you connect to your company whenever required.

  7.  Buying it Online

    This is the most cost-effective and faster method of buying car insurance than by that hassle paperwork. You are free to compare different deals online at one platform. It is wholly paperless work and soon after your policy is issued, you can access it anytime and anywhere.

Your Motor Insurance Won’t Help You If:

  • at the time of the accident, you were driving drunken
  • Your vehicle was involved in any illegal activity or any other thing that the policy resist you to
  • Driving without a valid driving license
  • Damage happens outside India, except in case of foreign cover for your sports car