Top Mistakes to Avoid When Buying Vehicle Insurance in India

Top Mistakes to Avoid When Buying Vehicle Insurance in India

Table of Contents

• Ignoring the Type of Policy You Need in Vehicle Insurance

• Choosing Only the Cheapest Premium

• Not Checking Insured Declared Value (IDV)

• Skipping Add-On Covers

• Overlooking Policy Exclusions

• Not Comparing Policies from Different Insurers

• Delaying Renewal and Losing No-Claim Bonus (NCB)

• FAQs

Ignoring the Type of Policy You Need in Vehicle Insurance

One of the biggest mistakes is not knowing the difference between third-party insurance and comprehensive insurance.

• Third-party insurance is legally mandatory but covers only third-party damages.

• Comprehensive insurance protects your vehicle as well as third-party liabilities.

Choosing Only the Cheapest Premium

Many buyers focus only on the lowest premium cost, ignoring coverage details. While it saves money upfront, it often means insufficient protection during accidents or theft. Always balance premium vs. coverage to ensure adequate safety.

Not Checking Insured Declared Value (IDV)

IDV is the maximum claim amount your insurer will pay if your vehicle is stolen or completely damaged.

• A lower IDV reduces premium but gives you less compensation.

• A higher IDV increases premium but ensures better claim value.

Skipping Add-On Covers

Add-ons like zero depreciation cover, roadside assistance, engine protection, or NCB protector provide critical support. Many buyers skip them to reduce premium costs, only to regret it later when unexpected damages occur.

Overlooking Policy Exclusions

Every policy has exclusions such as:

• Drunk driving damages

• Driving without a valid license

• Normal wear and tear

• Mechanical failures

Not Comparing Policies from Different Insurers

Insurance buyers often purchase from the first agent they meet without comparing multiple insurers. By not using online comparison tools or checking multiple providers, they miss out on:

• Lower premiums

• Better claim settlement ratios

• Wider coverage options

Delaying Renewal and Losing No-Claim Bonus (NCB)

The No-Claim Bonus (NCB) is a reward for claim-free years, offering up to 50% discount on premiums. If you delay renewing your policy beyond the grace period, you lose this benefit.

FAQ's

1. What is the most common mistake while buying vehicle insurance?

Not checking coverage details and focusing only on the cheapest premium.

2. How important is IDV in motor insurance?

Very important, as it determines your claim payout in case of total loss or theft.

3. Can I switch insurers if I made a mistake in buying the first policy?

 Yes, you can switch insurers at renewal without losing your NCB benefits.

4. Do I really need add-on covers in motor insurance?

Yes, add-ons provide extra protection against situations like zero depreciation, engine damage, or roadside emergencies.

5. What happens if I miss my vehicle insurance renewal date?

Your coverage lapses and you may lose your No-Claim Bonus, besides being legally non-compliant.