A car insurance is a regulatory requirement and hence, as a car owner, you must not skip buying one. To ensure your policy provides coverage, you need to pay a premium. It is the amount which the insurance company charges to underwrite the risk for your vehicle.
Many buyers are often seen to place extra emphasis on the price as they consider car insurance policies to be an added expense. However, it is more than that. In fact, it is an investment to avoid financial losses that repairs or accidents may bring in. Hence, it is essential to consider factors other than the premium when buying your policy.* Standard T&C Apply
Why should you consider factors beyond premiums?
Car insurance premiums are dependent on various factors like the model and make of the car, type of insurance plan, registration location, year or registration, etc. It is most probable that you will end up buying a policy that offers inadequate coverage by placing a higher emphasis on the premium. Thus, you will end up with a policy that does not help cover any financial losses when the time comes. Here are a few other reasons why you should not purchase the policy solely based on its premium:
- Lack of add-on covers
Among the two types of insurance plans, a third-party cover and a comprehensive policy, the latter one offers additional coverage by way of add-ons. These add-ons are those policy features which can be chosen to provide coverage for those events that are otherwise excluded from the standard comprehensive policy’s scope. When you buy a policy with lower premiums, these add-ons may not be included in your coverage. Thus, in effect, you will be required to pay higher expenses for repairs. *
- Higher deductibles
Opting for voluntary deductibles in car insurance is a nifty way to keep your car insurance prices in check. But many buyers opt for a high amount of voluntary deductible to lower the burden of premium. This results in a policy that will require you to pay a large amount when you make a claim by way of voluntary deductibles. Thus, it can be financially draining and not an advisable option for most car insurance buyers.
- Limited after-sales support
When you focus on buying a policy with lower premiums, you may end up with a policy that does not provide a strong after-sales support. This may result in problems like delayed claim settlement, deductions from your claim amount, etc. *
- Inadequate policy cover
Looking for a policy that is priced inexpensive will generally steer you to buying third-party insurance plans. This policy only covers the legal liabilities arising in the event of accidents to a third person. However, no coverage is available for damages to your car. Thus, any repairs for your car will be required to be paid from your own pocket. Hence, insurance experts advise on buying a comprehensive plan that offers an all-round coverage. *
These are some of the reasons to not place all the emphasis on a policy with lowest premiums. Instead, you can make a cost-benefit analysis to buy a policy with adequate features and balance the premiums. In this process, a car insurance calculator is a handy tool that can help you. *
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.