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5 Steps You Go Through With New Car Insurance Policy

Why Do You Need Car Insurance?

Before delving into the five phases, it's essential to understand why car insurance is necessary.


While you may be confident in your driving skills, accidents can happen due to the actions of other drivers or unforeseen circumstances like natural disasters.


Car insurance provides financial protection against such incidents, ensuring that you are not burdened with hefty repair costs or legal liabilities.


Additionally, it is a legal requirement in India for every vehicle to have at least third-party insurance under the Motor Vehicle Act of 1988. Non-compliance can result in penalties and even legal consequences. Therefore, purchasing car insurance is not only sensible but also a legal obligation.


Step 1: Determining the Type of Car Insurance Needed

The first phase of buying a new car insurance policy involves determining the type of coverage you require. There are two primary types of car insurance policies to choose from:


1- Third-Party Liability Coverage: This type of insurance is mandatory and covers any liability caused to a third party in the event of an accident. It provides financial protection for injuries, disability, death, or property damage caused to a third party due to your vehicle.


2- Comprehensive Coverage: As the name suggests, comprehensive car insurance offers broader coverage. It includes third-party liability coverage as well as coverage for damages to your own vehicle caused by accidents, natural calamities, and theft.


In 2019, the Insurance Regulatory and Development Authority of India (IRDAI) introduced standalone own damage coverage, allowing vehicle owners to have separate policies for third-party coverage and own vehicle damage coverage. Depending on your needs, you can opt for either comprehensive coverage or standalone own damage coverage.


Step 2: Choosing the Best Car Insurance Plan

Once you have determined the type of car insurance coverage you need, it is time to compare different insurance plans to find the best one for your new car. Factors to consider during this phase include:


1- Premium: The insurance price for a new car varies across different policy issuers. It is essential to compare premiums to ensure you get the best value for your money.


2- Network of Cashless Garages: Check if the insurance policy offers a wide network of cashless garages where you can avail of repairs without worrying about upfront payments.


3- Brand Repute: Consider the reputation and reliability of the insurance provider. Look for customer reviews and ratings to measure their service quality.


4- Claim Settlement Ratio: The claim settlement ratio indicates the losers' efficiency in settling claims. Higher ratios indicate better claim settlement processes.


While conducting your research, you may revisit the type of coverage you need based on the plans you come across. For example, if you find a comprehensive car insurance policy with attractive features and a reasonable premium, you may reconsider opting for only third-party liability coverage.


Steps 3: Exploring Add-Ons for Extra Protection

In addition to the base coverage, car insurance policies often offer add-ons or riders that provide extra protection. These add-ons can be customized based on your specific needs and preferences. Some popular add-ons include:


  • Zero-Depreciation Cover: This add-on ensures that you receive the full claim amount without considering depreciation. It is particularly beneficial for new cars.
  • Engine Protection: Engine repairs can be expensive. An engine protection add-on covers the repair costs in case of damage.
  • Roadside Assistance: This add-on provides assistance in case of breakdowns, flat tires, or other emergencies while on the road.
  • Personal Belongings Cover: If your personal belongings are stolen or damaged from your car, this add-on covers the loss.
  • Consumables Cover: This add-on covers the cost of consumables like engine oil, coolant, and brake fluid during repairs.

onsult your chosen insurance provider to understand the available add-ons and determine which ones are suitable for your needs.


Step 4: Assessing the Insured Declared Value (IDV)


The Insured Declared Value (IDV) is the maximum amount an insurance provider will pay in case of theft or total damage to the insured vehicle. It is essential to set an appropriate IDV for your new car. 


While the IDV depreciates over time, it is advisable to opt for an IDV close to the market value of your car. This ensures that you receive adequate compensation in case of a loss.


Please note that a higher IDV will result in a higher premium. Consider your budget and the value of your car when determining the IDV.


Step 5: Making the Final Policy Purchase

After completing the previous phases, you are now ready to make the final purchase of your new car insurance policy. The most convenient way to do this is by purchasing car insurance online. Follow these steps to complete the process:



  1. Provide the necessary details: Fill in the required information, including the make and model of your car, engine number, chassis number, and details of the Regional Transport Office (RTO) where the vehicle is registered.
  2. Online verification: The insurance provider will verify the details provided and assess the risk associated with insuring your car.
  3. Payment: Once the online verification is completed, you can proceed to make the payment for the policy. Ensure that you have your bank details ready for a smooth transaction.

By following these steps, you can easily purchase a new car insurance policy online, saving time and effort.


Buying car insurance for a new vehicle involves several important phases. Understanding these phases and the factors to consider at each stage will help you make an informed decision and choose the best policy for your needs.


Remember to assess the type of coverage required, compare different insurance plans, explore add-ons for extra protection, determine the IDV, and make a secure online purchase. By following these steps, you can ensure that your new car is adequately protected, giving you peace of mind on the road.


Disclaimer: The information provided in this article is for general informational purposes only and should not be considered as professional advice. For specific details and policy information, please consult with a qualified insurance provider.

5 Steps You Go Through With New Car Insurance Policy

5 Steps You Go Through With New Car Insurance Policy

Why Do You Need Car Insurance?

Before delving into the five phases, it's essential to understand why car insurance is necessary.


While you may be confident in your driving skills, accidents can happen due to the actions of other drivers or unforeseen circumstances like natural disasters.


Car insurance provides financial protection against such incidents, ensuring that you are not burdened with hefty repair costs or legal liabilities.


Additionally, it is a legal requirement in India for every vehicle to have at least third-party insurance under the Motor Vehicle Act of 1988. Non-compliance can result in penalties and even legal consequences. Therefore, purchasing car insurance is not only sensible but also a legal obligation.


Step 1: Determining the Type of Car Insurance Needed

The first phase of buying a new car insurance policy involves determining the type of coverage you require. There are two primary types of car insurance policies to choose from:


1- Third-Party Liability Coverage: This type of insurance is mandatory and covers any liability caused to a third party in the event of an accident. It provides financial protection for injuries, disability, death, or property damage caused to a third party due to your vehicle.


2- Comprehensive Coverage: As the name suggests, comprehensive car insurance offers broader coverage. It includes third-party liability coverage as well as coverage for damages to your own vehicle caused by accidents, natural calamities, and theft.


In 2019, the Insurance Regulatory and Development Authority of India (IRDAI) introduced standalone own damage coverage, allowing vehicle owners to have separate policies for third-party coverage and own vehicle damage coverage. Depending on your needs, you can opt for either comprehensive coverage or standalone own damage coverage.


Step 2: Choosing the Best Car Insurance Plan

Once you have determined the type of car insurance coverage you need, it is time to compare different insurance plans to find the best one for your new car. Factors to consider during this phase include:


1- Premium: The insurance price for a new car varies across different policy issuers. It is essential to compare premiums to ensure you get the best value for your money.


2- Network of Cashless Garages: Check if the insurance policy offers a wide network of cashless garages where you can avail of repairs without worrying about upfront payments.


3- Brand Repute: Consider the reputation and reliability of the insurance provider. Look for customer reviews and ratings to measure their service quality.


4- Claim Settlement Ratio: The claim settlement ratio indicates the losers' efficiency in settling claims. Higher ratios indicate better claim settlement processes.


While conducting your research, you may revisit the type of coverage you need based on the plans you come across. For example, if you find a comprehensive car insurance policy with attractive features and a reasonable premium, you may reconsider opting for only third-party liability coverage.


Steps 3: Exploring Add-Ons for Extra Protection

In addition to the base coverage, car insurance policies often offer add-ons or riders that provide extra protection. These add-ons can be customized based on your specific needs and preferences. Some popular add-ons include:


  • Zero-Depreciation Cover: This add-on ensures that you receive the full claim amount without considering depreciation. It is particularly beneficial for new cars.
  • Engine Protection: Engine repairs can be expensive. An engine protection add-on covers the repair costs in case of damage.
  • Roadside Assistance: This add-on provides assistance in case of breakdowns, flat tires, or other emergencies while on the road.
  • Personal Belongings Cover: If your personal belongings are stolen or damaged from your car, this add-on covers the loss.
  • Consumables Cover: This add-on covers the cost of consumables like engine oil, coolant, and brake fluid during repairs.

onsult your chosen insurance provider to understand the available add-ons and determine which ones are suitable for your needs.


Step 4: Assessing the Insured Declared Value (IDV)


The Insured Declared Value (IDV) is the maximum amount an insurance provider will pay in case of theft or total damage to the insured vehicle. It is essential to set an appropriate IDV for your new car. 


While the IDV depreciates over time, it is advisable to opt for an IDV close to the market value of your car. This ensures that you receive adequate compensation in case of a loss.


Please note that a higher IDV will result in a higher premium. Consider your budget and the value of your car when determining the IDV.


Step 5: Making the Final Policy Purchase

After completing the previous phases, you are now ready to make the final purchase of your new car insurance policy. The most convenient way to do this is by purchasing car insurance online. Follow these steps to complete the process:



  1. Provide the necessary details: Fill in the required information, including the make and model of your car, engine number, chassis number, and details of the Regional Transport Office (RTO) where the vehicle is registered.
  2. Online verification: The insurance provider will verify the details provided and assess the risk associated with insuring your car.
  3. Payment: Once the online verification is completed, you can proceed to make the payment for the policy. Ensure that you have your bank details ready for a smooth transaction.

By following these steps, you can easily purchase a new car insurance policy online, saving time and effort.


Buying car insurance for a new vehicle involves several important phases. Understanding these phases and the factors to consider at each stage will help you make an informed decision and choose the best policy for your needs.


Remember to assess the type of coverage required, compare different insurance plans, explore add-ons for extra protection, determine the IDV, and make a secure online purchase. By following these steps, you can ensure that your new car is adequately protected, giving you peace of mind on the road.


Disclaimer: The information provided in this article is for general informational purposes only and should not be considered as professional advice. For specific details and policy information, please consult with a qualified insurance provider.

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