Mistakes to avoid while buying car insurance policy

Car insurance is legally mandatory in India as per the Motor Vehicles Act 2019. Whether the vehicle is for personal or commercial purposes, old or new, two-wheeler or four-wheeler, one must have at least third-party insurance. Purchasing car insurance online has now become quite simple, easy and time-saving. However, many policyholders still make mistakes on car insurance policy; like instantly purchasing an insurance policy without doing proper due diligence, and several others. You can learn more about how to avoid making these mistakes while purchasing a car insurance policy here.

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Car Insurance Mistakes | Finserv MARKETS

12 Most Common Mistakes People Make While Buying Car Insurance

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Buying car insurance online has now become quite simple, easy and time-saving. However, for many policyholders, this means instantly purchasing an insurance policy to secure their vehicles. But did you know there are some key aspects to getting your four-wheeler covered? To ensure you can make the most of your car insurance, allow us to take you through some of the common mistakes that policyholders make.

Common Mistakes People Make While Buying Car Insurance

  • Forgetting to Compare Plans

Not comparing car insurance plans is a big no when it comes to getting the best coverage. You might end up letting a good deal slip through your fingers because you didn’t compare it. Hence, it is recommended to go through the various policies available online and put their features side-by-side. This not only helps you get an affordable premium quote but also enables you to personalise the plan.

  • Avoiding Research

Shopping for a car insurance policy is similar to getting anything online. It is crucial to conduct your research about the insurance provider and the kind of services they offer. You can refer to the Claim Settlement Ratio, Incurred Claim Ratio, Solvency Ratio, etc. to pick a trustworthy insurer. Furthermore, it is advised to check the customer reviews and ratings to understand the facilities offered by the company.

  • Opting for a Lower Premium

When it’s time to buy car insurance, many people end up searching for policies with the lowest insurance premium. Keeping the price as the deciding factor can be a major mistake. More often than not, a low premium translates to less coverage. Hence, it is important to ensure that your policy covers all major risks that your vehicle is exposed to. Underinsuring your vehicle can be detrimental in the long run.

  • Choosing Too Many Add-Ons

Add-on covers are a great way of enhancing your car insurance coverage to get maximum protection. So, sometimes you might find yourself opting for too many covers. However, do note that add-ons come at an additional cost. Purchasing a lot of covers can lead to an increased premium cost. Therefore, it is best to only get the add-on covers that fulfil your insurance requirements and offer you sufficient coverage.

  • Declaring the Wrong IDV

The Insured Declared Value or IDV of your car is a vital aspect of your insurance plan. It is the maximum amount you can get in case of vehicle theft or total loss. The IDV is also proportional to the insurance premium rate-the lower the IDV, the lower is the premium. This can cause many policyholders to declare the wrong IDV to avail an affordable insurance quote.

This isn’t ideal as the incorrect IDV will not offer sufficient protection to your car. Similarly, a higher IDV does not translate to a higher claim amount either. So, to know the correct IDV of your car insurance plan, visit our IDV calculator now!

  • Avoiding Online Insurance Plans

Purchasing a motor insurance plan on the internet can be worrisome for many individuals. It could be due to online fraud or the unfamiliarity of the platform. However, shopping for insurance online enables you to enjoy better and get cost-effective premiums in comparison to offline plans.

With Finserv MARKETS, you can easily purchase insurance online as we offer high security. Furthermore, you do not have to be tech-savvy to navigate your way through the website and safeguard your vehicle.

  • Not Reading the Policy Documents

An insurance policy document can be quite extensive and thus, many people don’t have the patience to scrutinize the entire document. This can be a big mistake, as it’s very important to understand the terms and conditions of the policy to avoid facing last-minute problems during claim settlement. So, read the fine print and review all important information such as the coverage, deductibles, exclusions, etc. mentioned in your policy.

  • Cancelling Your Existing Plan Before Purchasing a New One

In case you find a better car insurance policy with increased benefits, you may choose to change insurers. Instead of cancelling your ongoing policy, you can switch insurance providers and buy a new plan. After doing this, you can scrap your existing car insurance plan.

If you cancel your current insurance first, you will be left without coverage until you get a new insurance policy. Apart from the legal aspects, your past insurer will not settle any claims for the damage incurred during this period.

  • Only Buying Third-Party Insurance

Since a third-party insurance plan is mandated by law, many people choose to stick with it instead of getting comprehensive car insurance. As third-party cover only compensates for the damages caused to a third party, you would have to bear the financial burden of repairing your own vehicle. Whereas, a comprehensive insurance policy provides extensive coverage against third-party liabilities and own damage.

  • Hiding Crucial Details

Many a time, factors like the claim history, safety accessories, modifications and other such details are hidden from the insurer to avail a lower premium. Being dishonest about any such information in a bid to enjoy an affordable premium can certainly backfire at the time of claim. Hence, full and honest disclosure is a must while buying car insurance.

  • Disregarding the No Claim Bonus

No Claim Bonus or NCB in car insurance is a reward given to the insured for making zero claims during the policy term. By not raising any claims for five consecutive years, you can avail a discount of 50% on your insurance renewal premium. But some policyholders tend to disregard the NCB or fail to maintain it. By filing small claims throughout the policy period, you lose out on the chance of enjoying a lower premium rate. However, you can accumulate the NCB reward by not raising any claims and covering minor expenses that you can afford for a discount!

  • Failing to Renew Before Due Date

It is common to forget your car insurance due date and fail to renew it on time. This can lead your insurance plan to lapse if it isn’t renewed within the stipulated period. Not only will you end up losing your insurance coverage but also get penalised if caught by the authorities. So, it is vital to set reminders or opt for auto-renewal to avoid policy lapse. Head over to our car insurance renewal guide for more details!

Why Should You Buy Car Insurance from Finserv MARKETS?

Here are some key reasons as to why you should choose to purchase car insurance from Finserv MARKETS:

  • Trusted Companion

100 million+ happy customers across India have chosen Finserv MARKETS as their trusted insurance partner to financially safeguard their vehicle. It's your time now!

  • Multiple Offerings

Finserv MARKETS makes it easier for you to make the right choice when it comes to online car insurance due to our multiple offerings made to suit your requirements.

  • Hassle-Free Renewal

With a simple and hassle-free method of online car insurance renewal, Finserv MARKETS secures you with the best coverage instantly!

  • Quick Online Process

No extensive paperwork is the way with us! Just search the insurance plan of your choice and buy it online with just a few clicks on Finserv MARKETS.

  • Tailor-Made Insurance Plans

From numerous insurance plans to lucrative add-on covers, Finserv MARKETS lets you customise your car policy as per your insurance needs.

FAQs on Car Insurance Mistakes

  • ✔️Is there a limit on the number of add-ons I can purchase with my car insurance plan?

    No, there is no limit on the number of add-on covers you can purchase. However, it is recommended to only buy add-ons that fulfil your insurance requirements.

  • ✔️Can I rectify the mistake of not mentioning my past claim history to my existing insurance provider?

    Yes, you can contact your insurance provider and inform them about your past claim history.

  • ✔️How can I get a discount on my car insurance premium?

    You can get a discount on your car insurance premium by installing an anti-theft device in your vehicle. However, it is advised to install a device approved by the Automotive Research Association of India (ARAI).

  • ✔️Is it possible to switch from a third-party insurance policy to comprehensive car insurance?

    Yes, you can switch to comprehensive car insurance during your policy renewal. Visit Finserv MARKETS today to secure your vehicle with the right insurance plan!

  • ✔️What will happen if I provide false information to my car insurance provider?

    The insurance company will cancel your car insurance plan if they were to discover the false information. With the wrong details regarding your vehicle on the proposal form, the insurance policy shall become invalid. Therefore, it is advised to be truthful and provide accurate information to your insurer.