Buying car insurance online? Here is how to crack a good deal

With power comes responsibility, or so the saying goes. As India drives towards development, car sales have been accelerating as well. This, in turn, leads to the need for more safeguards and safety, which brings us to the need for a good insurance that safeguards you when your vehicle is damaged in an accident or mishap.

Before we dive further, it is important to note that third-party car insurance is a mandatory policy in India that provides coverage for damages, or injuries caused to a third party involved in an accident. It does not cover damages to your own vehicle. On the other hand, a comprehensive insurance policy offers broader coverage, including protection for damages to your own vehicle, as well as third-party liabilities.

So, with online players on the rise, here is a checklist of sorts to keep in mind while choosing car insurance in this competitive market.

Claim Settlement Ratio

Claim settlement ratio is the ratio of the number of claims the insurance company settled against the total number of claims it received during the financial year. This can be a good metric to check if the company has a good history of settling claims in the past.

“A ratio of 95% or higher is typically considered good. The same is published by the IRDAI (insurance regulator) on its website, and is also typically available under public disclosures of the website of every insurance company,” says Vivek Chaturvedi, chief marketing officer and head of direct sales, Digit Insurance.

Scanning reviews

It is important to read customer reviews and check ratings of an insurance company on social media platforms for red flags.

“Research their customer service reputation through reviews, and app ratings by checking the Play Store and App Store. Speaking with existing customers will give you insights into the company’s claims process and settlement speed,” says Animesh Das, chief underwriting officer, Acko.

Knowing the process

Having knowledge about the procedure for making a claim and the duration it takes for an insurance company to resolve it is also crucial.

“ Most new-age players have a completely digital process of filing a claim, which typically only takes 5-10 minutes. Many insurers also offer additional services like car pickup and drop, and usually coordinate the claim settlement process with the garage end-to-end for quicker resolution,” says Chaturvedi.

He adds that customers can also check the details of policy complaints and claim complaints that every insurer received in the current year per 10,000 claims it registered during the year. These details can typically be found in the “NL-45 (Grievance Disposal) Form” under the public disclosures section of the insurance company’s website.

Why online makes sense

Bypassing intermediaries such as agents or brokers, digital insurers eliminate commission fees – which reduces expenses and facilitates the provision of affordable premiums. Further, new-age insurance companies use a range of technological tools to develop predictive underwriting models. This enables them to offer customers more competitive rates.

“Digital insurers are able to offer online insurance with zero commission. Moreover, digital platforms and automated systems streamline the insurance process, enabling insurers to manage policy applications, claims, and customer inquiries more efficiently. This, in turn, translates into cost savings, which are then passed on to customers in the form of lower rates,” says Das.

You can easily compare different insurance policies online with your existing policy to see if you have a better deal. However, it is important to not just compare the prices, but also features and coverage details.

Add-ons

Motor insurance policyholders have the option to enhance their coverage with various add-ons. One popular add-on is the zero depreciation cover, which ensures that the policyholder receives the full cost of repair or replacement without considering depreciation.

Another valuable add-on is the engine protection cover, which safeguards against damages to the vehicle's engine and related components. Roadside assistance is also a commonly chosen add-on, offering services such as towing, flat tire assistance, emergency fuel and battery jump-starts.

No-claim bonus (NCB) protection is an add-on that allows policyholders to maintain their NCB even after filing a claim. Lastly, the invoice cover add-on compensates for the invoice value of the vehicle in case of total loss or theft. It is essential to carefully evaluate and select the add-ons that best meet your requirements and fit within your budget.