Car insurance is the policy that protects you and your car against expenses arising out of damages. To keep this car insurance valid, you have to pay a premium amount. This premium amount is the monetary compensation to the insurance provider for the risk that they undertake. In India, the consumer mentality is of having cheaper goods of the highest quality. Due to this, they tend to put more consideration on the price of the car insurance over the coverage it provides.
The premium for a car insurance policy
is dependent on various factors such as the model of the car, the situation the policyholder is in, or the amount of risk the insurance provider will have to bear in case of an emergency. By assigning a higher weightage to the cost of the policy, there are chances that you may lose out on certain important coverage and benefits that may make the premium seem more expensive to you. It is important that you need to undertake a cost-benefit analysis before choosing car insurance. Why should you look beyond the premium?
Lower premium makes car insurance affordable but with the benefits car insurance becomes obsolete.Lack of add-ons
When you add various add-ons to the car insurance policy, the cost of such add-ons is reflected in the amount of premium you are liable to pay. Due to this, many people don’t opt for certain important add-ons like zero depreciation cover, engine protection cover, etc. which leads to lower claim amounts in the future.Poor-after sales support
With the cutthroat competition existing in the market, various insurance providers are trying to woo the customer with cheap premium amounts. Insurance is a subject matter where it is important to have strong and reliable after-sales support. Insurance providers which offer cheap car insurance might not have strong after-sales support and this can be a source of stress when you file a car insurance claim.Higher Deductibles
As mentioned before, the premium for car insurance
is dependent on various factors. One of these factors is the deductibles you opt to pay. If you choose a higher deductible amount then the amount you are liable to pay as premium decreases. But this also means that you are liable to pay for most of the damages incurred which can be financially draining for some. Inadequate coverage
There are two main types of car insurance available- third-party and comprehensive car insurance policies. Third-party insurance is cheaper than comprehensive cover but it also provides less coverage in terms of injury or damages caused to you or your car. This is why it is always advised to opt for comprehensive car insurance if you are able to afford it.
Car insurance should not be looked at as an expense but as an investment. Higher the investment, the greater the rewards that you will benefit from. There might be situations where you can avail a range of benefits at cheaper rates but for this, it is important that you undertake an adequate amount of research and make an informed decision. The pages slugged ‘Brand Connect’ are equivalent to advertisements and are not written and produced by Forbes India journalists.