Buying Auto Insurance? 5 Things To Keep In Mind

By | August 11, 2017

Buying Auto Insurance

Buying an automobile holds significance as you own it after spending a large chunk of your hard-earned money. It is, thus, an investment which you would help you cover the cost of repair and accident. Auto insurance is an integral part of owning a vehicle so make sure you carry out the necessary research before you zero in on a product. Insurance is largely picked on the basis of the size of the premium and also the cover it provides.

Here are a few things you must keep in mind before buying auto insurance:

Types of Insurance – There are two types of auto insurance policies. One being third-party insurance, which is compulsory in India and the other is a comprehensive insurance policy. The third-party insurance is typically provided by dealers and the premium is factored in the price of the vehicle.

The comprehensive insurance, on the other hand, takes care of third party liabilities, personal accidents, and thefts. Although the comprehensive policy is expensive compared to the compulsory third-party liability, it is worth every extra penny.

Add-ons – If you are purchasing insurance through an agent, there is a fair chance that he/ she would try to sell you additional coverage. Additional coverage would mean optimal protection if you purchase them based on your requirement.

For example, a depreciation waiver cover would allow you to claim the entire amount on auto parts to be replaced. So, do a review of the list of add-ons on the Car Insurance policy and pick ones that are beneficial for you.

No-Claim Bonus (NCB) – The No-Claim Bonus feature in auto insurance allows you a discount on a certain year’s premium if no claims were made in the previous year. The NCB rate offered is same for all the insurance providers. The discount for car and two-wheeler insurance policies can rise up to 50 percent.

If you continue with your policy without breaking it for years, the No-Claim Bonuses would get accumulated to attain a substantial size.

Voluntary Excess – This is the amount of money you would pay from your pocket without filing a claim. By choosing this option, you would be decreasing the premium amount by around 35%, as on the event of a claim, the insurer would not have to pay as much. The amount chosen as voluntary excess should not be more than the No-Claims Bonus sum that you are entitled to in the following year.

Research – Don’t give into a dealer’s offer just because he is pushing too hard. Look at the products available in the market to find the best offers. You can compare products online with just a few clicks. Buying a policy online can help you save money.

Exclusions in Auto Insurance

Instances for which you cannot claim auto insurance include drunken driving or driving under the influence of drugs. Any deliberate loss or damage is not covered. Even if your car is insured, you could face challenges in getting your claim accepted if your car is driven by an uninsured person. Damage caused by war or nuclear attack is not covered by auto insurance. Regular wear and tear, and aging of the car are also not covered.

Before zeroing in on a product, don’t forget to run your research or get your doubts clarified from auto insurance agents.

(The writer is CEO,

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit for the latest rates/offers.
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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

6 thoughts on “Buying Auto Insurance? 5 Things To Keep In Mind

  1. Lance Baxley

    You pointed it out right. The type of Insurance matters more than everything else. People buy the wrong type and blame the entire system. But in reality, people should look deeper,and agents should explain better to help them understand.

    1. Team BankBazaar

      Hi Lance,

      That’s correct. We’re glad you found our post useful. Keep reading our blog for more insights into the world of finance.

      Team BankBazaar

  2. Alice Carroll

    Thanks for the tip about studying about the kinds of add-ons I could get when buying auto insurance. For the longest time, the car that I’ve been driving has been the car that my dad gave me as a present when I moved out for college. Now that I will be buying a new car using my own money, it would be a great learning opportunity to also figure out on my own how to get auto insurance.

  3. Levi Armstrong

    I like that you said that I should not give in to a dealer’s offer no matter how persistent they are without researching the market first for the best auto insurance deal. I’ll keep this mind because I’m planning to buy my first car soon. Perhaps it would be wise to do research in advance and find a reputable auto insurance agent to hire, so everything would go smoothly once I finally buy a car. Thanks for this!

    1. Team BankBazaar

      Hi Levi,

      Yes, please do that. We’re glad you found our post useful. Keep reading our blog for more insights into the world of finance.

      Team BankBazaar


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