Buying Insurance for Your New Vehicle: The Essential Do’s and Don’ts

Purchasing insurance for a new vehicle is a critical step for every car owner in India. It’s not just about ticking a legal box; the right policy offers financial protection and peace of mind. However, navigating the world of insurance can be daunting. Here’s an easy guide to help you make an informed decision.

Understanding Legal Requirements

In India, it is mandatory to have at least third-party insurance for any vehicle on the road. This policy covers damages or injuries caused to others in an accident involving your vehicle. However, it does not cover damages to your own car. Driving without third-party insurance can result in hefty fines or legal issues.

While third-party insurance satisfies the legal requirement, comprehensive insurance offers broader protection. It protects your vehicle against theft, fire, accidents, natural disasters, and third-party liabilities. Although optional, it is highly recommended for better financial security.

You Don’t Have to Buy Insurance from the Dealer

Many new car buyers assume they must purchase insurance directly from the dealership or manufacturer. This is not true. While manufacturers often partner with insurance providers, you can still shop around for the best deal.

Do’s (When Buying Insurance)

• Compare Policies: Use online comparison tools to evaluate premiums, coverage, and add-ons.
• Understand Add-Ons: Buying add-ons like zero depreciation, roadside assistance and engine protection will enhance your coverage but also increase your premium.
• Review the Insured Declared Value (IDV): Ensure the IDV aligns with your car’s current market value. A lower IDV reduces the premium but can leave you underinsured. Remember IDV is the sum insured in your motor policy and you will get only the IDV amount in case of a total loss to your vehicle.
• Check the Claim Settlement Ratio: The Claim Settlement Ratio (CSR) represents the percentage of claims an insurer settles in a year out of the total claims received. A high CSR reflects an insurer's reliability and efficiency in processing claims. For example, Royal Sundaram boasts an impressive 98.33% CSR, making it a trusted choice for ensuring smooth claim resolutions.

Don’ts (to Avoid)

• Avoid Overloading with Add-Ons: Unnecessary add-ons can inflate premiums without adding significant value.
• Never Drive Without Insurance: Lapses in coverage can lead to fines and leave you vulnerable to financial losses in the event of an accident.
• Don’t Focus Solely on a Cheap Premium: While a low premium may seem appealing, prioritize overall value. Reliable claims support depends on factors like a wide cashless garage network, a high claim settlement ratio, and positive customer reviews.

Buying vehicle insurance is more than a legal formality — it’s an investment in your peace of mind and safety. Take time to compare policies, understand your options, and choose what suits your needs and budget.

Consider Royal Sundaram car insurance for a hassle-free insurance process. Safe driving!