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Picking the right motor cover

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Avoid purchasing insurance from car dealers as it is usually bundled as part of the deal, and may have very little to offer

Avoid purchasing insurance from car dealers as it is usually bundled as part of the deal, and may have very little to offer

Ashwini Dubey

Car owners’ relationship with their vehicle often bears a stark contrast with the one they have with their motor insurance.

Overwhelmed with excitement in purchasing a new car, most buyers do not spare a thought for insurance.

From the time one decides to own a car till the time of taking delivery, most of the research and effort goes into the specifications of the vehicle. Motor insurance, on the other hand, is treated as an ‘incidental purchase’.

The insurance often comes bundled as part of the deal handed over by the dealer.

After all, who wants to think about damage at the time of purchase? However, much to the chagrin of car owners, accidents on Indian roads are as real as they get – 4.5 lakh road crashes per year, to be precise. With such an alarming figure, insurance goes beyond being a mere mandate to escape a hefty fine, and instead, becomes the shield that protects you and your prized possession. Therefore, it’s crucial to give motor insurance purchase its equitable share of research. If you are a potential car buyer looking for an insurance policy, you shouldn’t rush into grabbing whatever policy your dealer hands you.

Limited options

Models, features, accessories and what not? Buyers can’t get enough of researching unlimited options for each of these before they can zero in on their dream car. Why not do the same when buying a protective shield for it? Car dealers are not the primary dealers of insurance. They usually have a tie-up with a limited number of insurers and earn profit on the sale of insurance. For many insurers, car dealers act as the best point of sale to convert a customer. But before taking it up, do ask yourself if this is the best you can do to protect your vehicle in the event of an unfortunate accident? There’s a high possibility of following a cookie-cutter approach in designing these insurance policies with similar benefits for every buyer. It’s always advisable to opt for the policy that suits your needs best and not a pre-approved approach.

Pricier deal

A bundled car insurance deal might come with certain additional features or add-ons in the policy. The dealer acts as the best medium to present these features to the customer. While sometimes useful, quite often not all features are useful for the buyer, but he or she ends up buying the policy anyway. This later results in costlier premiums. Also, every add-on comes at a price. It’s the customer who might end up paying as much as 40% more in the dealer-insurer arrangement. So, do not rush into buying something that you might regret later.

For instance, if you live in an area where you think that your car will not have much exposure to water or you can go the extra mile to protect your engine carefully, you can choose not to buy the engine protection cover.

On the other hand, customers might also be tricked into paying costlier premiums for a deal that may or may not include adequate add-on covers. There’s a possibility that the buyer might need covers like roadside assistance, zero depreciation or personal accident cover, but might not be aware of them at the time of purchase. In this case, they will have to opt for such add-ons later which might be a costlier deal for them. So, do not rush into buying something you might repent later.

Losing online benefits

Technology is the foundation of the modern world, and everything you need is available at your fingertips. While insurance is still perceived as a distribution-controlled product sold via the feet-on-street model, you can just as easily buy insurance online as you buy anything else. Since the digital medium eliminates the need for any manual intervention, the cost reduction reflects in policy pricing as well. This is just one key benefit among many others of buying motor insurance online.

You can trawl through countless options and customise your features as per your needs. You can also get credible reviews from other policyholders and choose the best option. Given that we are still in the midst of a pandemic, you can get the end-to-end purchase done online safely from your home. Buying online is a lot more convenient too. If you need any assistance, you can talk to the insurer or aggregator via audio or video calls. You can easily compare important aspects of a policy like the claim settlement ratio or Insured Declared Value (IDV).

Buying one’s coveted car is a moment of significant importance for the owner, not just financially but also emotionally. However, it is equally important to not let this excitement get the better of you or land you in a subpar insurance deal.

(The author is Head-Motor Insurance Renewals, Policybazaar.com)



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