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3 Common Mistakes People Make While Buying Car Insurance

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Published on February 19, 2019. EST READ TIME: 3 MIN

Policy wording with details of inclusions and exclusions, legal aspects and the cost involved are some of the complexities that people face while buying a car insurance plan. Lack of awareness creates unnecessary confusion in understanding how a Car Policy works.

An insurance policy is aimed at reducing your stress and not elevate it further. To help you better understand its workings, mentioned below are some of the common mistakes that people make while buying a car insurance:

Buying a policy with low premium

For those who are very calculative about their funds, purchasing an insurance policy with low premium remains the prime focus. Many people use a car insurance premium calculator to check where they can pay the lowest premium and that is the firm they choose. However, cost should not be the only deciding factor when you choose your insurance policy. Reliability of the company and inclusions in your plan are two important factors that make a good insurance plan.

For instance, let us look at deductibles. It is the amount of money you pay for repairs while insurance covers the rest. People sign into deductibles keeping the low premium amount in mind. However, at the time of filing a claim, the policyholder realises the amount he or she needs to pay, thanks to choosing a high deductible.

If an insurance company offers a low premium, find out how they are managing to bring down the cost and cater their services at low rates. A low premium policy often translates to less cover, when the need arises. Make sure your policy covers all the major risks that you are exposed to. Underinsured is as good as no insurance.

Avoiding Add-on Covers

Most people try their best to get the lowest premium for their car insurance plan. Since add-on covers increase the premium, many decide not to buy them. That is a mistake. Buying the right add-on will benefit your car in many ways. For example, buying an Engine and a Gear Box Protector comes in handy during monsoons when there is a high probability of water seeping in.

Not doing adequate research

Buying an insurance for your car is not something you do on a whim. It requires a good amount of research and consideration. People need to take a thorough look at the firms offering car insurance. You can visit aggregator websites which list out different firms and their services. When you compare; here are some points you should look out for:

• Number of authorized network of garages offering cashless claim

• Do they offer an instant car policy if you buy it online?

• Does their website offer a smooth experience while buying a policy?

• Do they offer Personal Accident Cover? If yes, does it cover the unnamed passengers too?

• How many add-on covers are on offer?

• How is the claims process?

• Do they have a high claims settlement ratio?

• How is their customer service?

Generally, people tend to buy the first insurance policy that they come across or the one that their friend or relative recommended to them. Do not do that. Use the internet to compare the above points before zeroing down on one insurance firm.

When you make a decision about purchasing an insurance policy, ensure that it covers all your major requirements. Manytimes people sign the policy without reading and understanding the information that is provided in the document and suffer later at the time of making a claim. One should never assume about the coverage that the policy plan provides; be informed, be certain. Moreover, whenever you have a doubt, the insurance company is always at your service to sort it out. You should ask for help without hesitation.

This blog has been written by

Mukesh Kumar| Motor Insurance Expert |36+ years of experience in insurance industry

A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 7,600+ network garages, you can be assured of help in event of any damage to your vehicle".

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