For most Indians, buying motor insurance is just a legal necessity under the Motor Vehicles Act, 1988. Most Indians are happy to take the dealer's basic, bundled offer without a thought, overlooking beneficial add-ons. This could cause a lot of regret in the case of an accident, or during renewal.
Here’s MahaMoney's guide to making smarter choices.
Best Practices When Buying Motor Insurance
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Look for Strong Cashless Garage Networks |
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Choose Long-Term Cover |
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Include Riders | These small but powerful riders (additions to your policy) help you get more from your policy at minor extra cost:
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Protect Your No Claim Bonus (NCB) | If you don’t raise a claim, your NCB discount grows each year. Opting for an NCB Protection Add-On protects this bonus, even after making small claims. |
Set the Right IDV | Your Insured Declared Value (IDV) decides how much you will get in case of total loss of your vehicle. It's tempting to opt for a lower IDV to reduce premiums, but it will lower your claim amount. |
Renew On Time | A lapse triggers a reset - you lose your NCB and the insurer will want a re-inspection. Set reminders or enable auto-renewal to keep your coverage going. |
Report Accidents Immediately | Always inform your insurer within 24–48 hours. Wait for the surveyor to come before initiating repairs, to avoid deductions or rejections. |
Common Mistakes Buyers Make
Taking the Dealer-Bundled Policy | Dealer-bundled insurance is based on a tie-up with insurance companies, and is often overpriced—it looks small compared to the vehicle price. You can not only save up to 40% by buying directly online, but also find riders and garage networks useful to you. |
Focusing only on premiums |
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Skipping the fine print | Cheaper insurance premiums come with multiple exclusions and a reduced IDV. They may also make you waive your NCB rights. Convenience today can lead to complaints tomorrow. |
Neglecting claim service reputation |
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| It may be tempting or expedient to get minor fixes made by garages or roadside mechanics not authorized by your policy. but such fixes can mean invalidation of your policy. |
Before We Go
When buying a vehicle, dealer-bundled insurance looks like a small cost to pay against the price of the vehicle (since motor insurance is mandatory), without requiring a ton of thinking. This is especially true in the exuberance of festive-time buying. However, the same can suddenly appear like a large sum to fork out during renewal, and may feel worse when you face rejections or deductions when making a claim after an accident or rain damage.
It helps to compare policies across insurers, choose the right premiums and riders, and most importantly, an extensive network of garages. It also helps to know know the exclusions and other conditions - sadly, the perfect insurance policy for every vehicle does not exist. But a well-chosen poliy adds to the life of your vehicle, making your festive experience last for a long time.
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