Car Insurance: Don’t Get Lured by Low Premiums – Tips to Avoid Costly Mistakes

---

New Delhi: With the GST rate cuts just before Diwali, the prices of several cars have dropped by ₹1–1.5 lakh. Many buyers are rushing to purchase vehicles and seeking insurance online to save money. However, opting for extremely low premiums can backfire, as one car owner, Navneet, recently discovered after a major accident revealed gaps in his motor insurance coverage.

Insurance Experts Warn:
Rakesh Kaul, Chief Distribution Officer – Retail Sales at Bajaj General Insurance, emphasizes that motor insurance is not just a regulatory formality. “It reflects your awareness of risks and responsibility. Trying to save a small amount on premiums can lead to costly mistakes,” he says. Many buyers focus only on the mandatory third-party liability cover, neglecting comprehensive protection that could safeguard them financially in an accident.

Understanding the Policy Matters:
Motor insurance is essential, but many consider it only a legal requirement. The true importance of a policy becomes clear only when a claim arises. Often, claim disputes occur not due to negligence, but because of misunderstandings regarding policy terms, documentation, or coverage limits. Understanding your policy and making informed choices at the time of purchase can prevent claim rejections and financial loss.

Choose the Right Insured Declared Value (IDV):
IDV represents the maximum insured amount payable by your insurer in case of a claim. It is calculated based on your car’s age, make, model, and depreciation. Setting a balanced IDV is crucial: too low may reduce premiums but result in insufficient coverage; too high increases costs unnecessarily. Consulting your insurer or advisor helps ensure adequate coverage without overpaying.

Add-On Covers Are Key:
A standard own damage policy provides basic protection, but add-ons turn it into comprehensive coverage tailored to your vehicle’s risk profile.

• Zero Depreciation Cover: Covers full repair/replacement costs without depreciation deductions.
• Consumables Cover: Pays for essential items like lubricants, nuts, bolts, AC gas, and brake fluids, often excluded from standard policies.
• Engine & Battery Protection: Safeguards against water ingress, lubricant leaks, or electrical failures – especially vital in flood-prone areas.
• Roadside Assistance: Offers towing, flat tire support, jump starts, emergency fuel, hotel accommodation, and legal aid during breakdowns.

Bundled Packages for Convenience:
Many insurers offer bundled packages combining Zero Depreciation, Engine Protection, and Roadside Assistance. These simplify policy management, reduce costs, and make claims easier compared to selecting individual add-ons.

Maintain Accuracy and Hygiene in Policy Documentation:
Insurance policies are legal agreements. Ensure accurate details of your vehicle registration, chassis number, owner name, address, pin code, and past claim history. Providing correct information minimizes paperwork, prevents delays, and ensures a smooth claims process.

Bottom Line:
While low premiums may seem attractive, they often come with hidden risks. Taking the time to understand your motor insurance, choosing the right IDV, and adding relevant covers ensures comprehensive protection – and peace of mind – when you need it most.