How Does New Car Insurance Differ from Old Car Insurance?

Whether your car is old or new, it is mandatory to get it insured as per the Motor Vehicles Act, 1988. It is illegal to drive a vehicle on Indian roads without insuring it. Along with that, you must also make sure to renew it yearly. If you do not follow this rule, it could land you in serious trouble.

How to choose the right coverage?

There are two types of car insurance policies, one is third-party, and the other one is the comprehensive policy. Third-party cover is the basic policy that does not offer own damage cover, i.e. insurance against theft, fire, calamities. On the other hand, a comprehensive policy will provide own damage cover as well as the mandatory cover. It is entirely your choice whether to spend more money and buy extra coverage or spend little and take the basic cover.

If no claim is raised during the policy period, the car insurance premium will be less for insuring an old car, because of the accumulated No Claim Bonus, which is a concession for not raising a claim. Older cars have less premium as compared to the new ones, because of their low Insured Declared Value (IDV).

Choosing add-ons

If you have a third-party policy, you can’t take add-ons along with it. To purchase add-ons, you must buy a Comprehensive Plan. These additional covers can extend the score of your Comprehensive policy.

The selection of your add-ons basically depends on usage of the car. For example, if your car is new, it is suggested that you go for a Zero Depreciation add-on because it will negate the depreciation at the time of claim settlement. You might not get this cover for cars older than a certain number of years.

In the same way, if you are travelling in your car without passengers, paying an extra premium for a Passenger Cover Add-on would be of no help to you. If you travel long distances frequently, you can opt for a Roadside Assistance Add-on, as your car might break down in the middle of an unknown place and you might need some help in repairing it.

Purpose of the vehicle

Before purchasing the car insurance policy, you might go for compare car insurance online. But, what’s even more important than this is, understanding the usage of your car. Only then can you go ahead and purchase the policy.

Here are 10 questions you must ask yourself before comparing policies:

1. Do you use your car on a daily basis?
2. Will you be using your car for going on long drives?
3. Do you travel out of the state very often?
4. Do you own another car?
5. Who all will be driving your car apart from you?
6. Are you going to travel alone in your car, or with your family members?
7. Does your car have an accident history?
8. Do you live in a flood-prone area?
9. Is there a chance of your car getting stolen?
10. Is there any history of rioting involved in your locality?

To select an appropriate cover, make sure to ask yourself the questions mentioned above and make a list of the answers. You can even ask any other questions that might pop-up in your head to clarify all of your queries.

Buy your policy online

Old or new car, you can easily purchase car insurance online. This process takes only a few minutes. You can also renew your existing policy online. Usually, the insurance company would want to inspect your car if there is a huge gap after the expiry of your policy.

Always make it a point to compare policies before purchase or insurance renewal. Make your comparison based on the cover, premium, extra features and the overall reputation of the insurer. Also, go through the terms and conditions of the policy before making the purchase.