Complete Guide to Buying Auto Insurance Digitally – Forbes Advisor INDIA
The pandemic has changed our view of insurance. Not only has this increased awareness of the need for insurance, but it has also led to a behavior change in the way we consume insurance. There has been a surge in the discovery, purchase and consumption of insurance digitally.
Speaking of auto insurance, all of us who own a vehicle would hate to see it damaged. Add to this the inconvenience of being without personal transport, especially in the current context, where we are more and more dependent on our personal vehicles. It is therefore important to invest in insurance to ensure that we can repair and overhaul our vehicles in no time, without burning your pocket!
While auto insurance can be purchased online and offline, most people now prefer the online route. The Covid-19 pandemic has encouraged consumers to switch to buying insurance digitally instead of buying it offline. Interestingly, online doesn’t necessarily mean unassisted anymore; even for clients who wish to be supported in decision-making; the online platform now provides it by activating the advisers. Digital media facilitate search and discovery by democratizing information and, of course, the process is convenient. You can purchase your policy in minutes from the comfort of your own home or on the go via your mobile.
Today you can:
- Do your full research online.
- Take out auto insurance in just a few clicks and without paperwork.
- Customize the plans according to your needs.
- Get an online advisor.
- Store your insurance digitally.
- Manage your complaint via an app, over the phone or online.
Buying auto insurance online is now a snap thanks to the penetration of mobile internet, improved data transmission speeds, reduced data costs and of course. , digital transformation in the insurance sector.
The whole process only takes a few minutes provided you have all the information handy and ready with you.
Some information to keep handy when purchasing auto insurance online:
- Registration number of your vehicle.
- Details of any claims made in the past year.
- When your old insurance expires.
- In some cases, you may also need to remember your vehicle’s engine and chassis number.
Basics of the Do-It-Yourself Online Auto Insurance Process
Types of policies
In India, there are two types of auto insurance policies: liability insurance and comprehensive insurance.
- Third party insurance is a legal obligation. Under this, only damage caused to the third party is covered. You do not get any compensation for damage to your car.
- A comprehensive auto insurance policy, on the other hand, covers both civil liability and damage to your car.
It is always recommended that you have a comprehensive policy to protect both you and your vehicle from legal liability.
Add-ons are additional coverage options that you can purchase at an additional premium. They expand the scope of the policy and provide coverage for specific damages that are not included in your regular plan. When you compare plans, it’s important to check out these add-ons. All auto insurance companies have an extensive list of add-ons that they offer.
Depending on how you plan to use your car, you can select the ones you need. If your vehicle is new, you will want to go for something like zero depreciation coverage. Remember that the number of add-ons you select will have a direct impact on your premium. So choose wisely.
Declared insured value
The age of your car, its condition, and the miles driven all affect the type of policy and extensions you can purchase. They also determine the value called declared insured value (IDV) for which you can cover your car. IDV is the maximum amount your insurance company will pay if your vehicle is stolen or damaged beyond repair. Your car’s IDV will have a direct impact on the premium; the higher the value, the higher the premium.
Most police will recommend an IDV for your car with some flexibility to change it. Avoid underinsurance – that is, insuring for less than the ideal number just to get a lower premium, as you risk losing a lot more in the event of theft or total loss. A higher than ideal IDV will impact your premium and is also not recommended.
No claim premium (PNE)
This is the discount you can get on your premium for the following year if you don’t make a claim in the current year. The discount continues to increase, that is, it is 20% for a loss-free year (say the first year) and continues to increase to a maximum of 50% for no claims made or pending in the previous five consecutive years of insurance.
Remember that a claim, even a year from now, will bring your SOP to zero. So think carefully before making a small claim, the NCB you lose on the renewal premium may be higher. Another fact is that the NCB belongs to the individual and not to the car, so if you sell your car and you have a 50% NCB; you can transfer it to the new car you buy. This means that you will get a 50% discount on the insurance of the new car. Isn’t that a great incentive to drive safely.
Insurer’s Claims Settlement Ratio (SCR)
This is an important indicator that few customers know and understand. The CSR shows the number of claims the insurer has settled compared to the number of claims it has received in a year. The higher the claims settlement ratio, the better an insurance company in terms of measured ratio.
Be aware of what your policy won’t cover
- Accidents that occur outside the authorized geographical area according to the police. For most of the fonts in India, the geographic limit is in India and the font has a function to extend it to countries like Nepal, Bhutan, etc. after paying an additional premium.
- Claims that may arise as a result of any contract you may have entered into with a third party. For example, if you enter into a contract to pay compensation to someone in the event of an accident.
- Your car is used / driven illegally. For example, a claim for an accident when the car was driven by a person without a valid license.
- Any loss or damage resulting from a car accident. For example, your vehicle has been hit by a rock or stone which damaged the engine oil pan and you continue to drive the vehicle and eventually there is an engine seizure and the car stops. The policy will cover damage to the oil pan (oil pan) and consequential damage to engine parts will not be covered.
- Loss or damage caused due to situations such as enemy strikes, civil war, mutiny, other incidents of war, etc.
- If your vehicle is used for purposes other than personal (social and domestic use); such as auto trading, hiring or rewarding, transporting goods for commercial purposes, racing, speed testing, etc.
- Any damage to your car while driving under the influence of alcohol or drugs.
Mistakes You Can Avoid
When it comes to buying and renewing auto insurance, people often choose the fastest and cheapest option. But, to enjoy real peace of mind and enhanced coverage, you need to weigh your options and select the one that meets most of your protection needs.
- Buying full coverage is prudent and more helpful. Avoid buying only mandatory TP coverage.
- Avoid choosing your policy solely on the premium. Service and experience are also important.
- It is not a wise thing to do not buy additional coverages just to reduce your premium. Additional coverages provide additional security and help reduce your out-of-pocket expenses at the time of a claim. A little extra cash on top of the regular premium will help protect you against unforeseen eventualities. But you should choose add-ons according to your needs and requirements only.
- Renew your policy on time to make sure you don’t lose the No Claims Bonus (PNE). For each loss-free year, your insurer will give you a discount on the premium for the following year, known as the PNE. Also, don’t forget to use the accumulated NCB when changing vehicles. Remember to transfer the accumulated SOP from the last policy to the new policy when changing vehicles to reduce premium expenses.
- Often people tend to give wrong information about their age, driving experience etc. in order to reduce the amount of the premium. Beware of such practices! Providing false / inaccurate information when purchasing / renewing auto insurance may result in cancellation of the policy or rejection of a claim. Insurance fraud is a crime and can lead to heavy fines, jail time, etc. It should therefore not be taken lightly.
With all of this in mind, don’t hesitate and take out comprehensive vehicle insurance and enjoy the trip. Make an informed choice and choose an insurer who offers you a relevant product that meets your protection needs, good service benefits and excellent customer service!