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Is Your Car Insurance Policy Leaking Money?

Team AckoJan 17, 2024

In times when people are finding it difficult to maintain work-life balance, thinking about one’s car insurance policy doesn’t quite top the priority list. But you need to be prompt, for a bad policy is just like a money-leaking tap.

Contents

Purchasing quantity:
Insured Declared Value:
Discounts:
Timely Renewal:

Purchasing your policy:

First-time car buyers usually go by what the showroom suggests as far as car insurance is concerned. But what you can do is go online and lookout for affordable policies, without compromising anywhere. Find your ideal car insurance policy and save your money from leaking.

Purchasing quantity:

While it is a good idea to purchase an extensive cover in the form of a Comprehensive Insurance, you need to take a call regarding the optional add-on covers. They do lend personalization to your policy and strengthen it, however, hoarding add-ons isn’t beneficial.

Since add-on covers increase insurance premiums, one needs to be pragmatic. For example, going for a passenger cover will not be productive if you drive alone.

Insured Declared Value:

Insured Declared Value or IDV, as it is popularly referred to, is a value that is declared by you while purchasing the policy. It doesn’t have a direct implication on the claim amount, unless the claim is for total loss. However, it does impact your insurance premium.

Many people confuse the IDV as the car’s resale value and thus go for a higher IDV. But this is not true. At most, it can be vaguely termed as your car’s current market value. Declaring a higher IDV means paying unnecessarily high premium. Going for a lower IDV means being underinsured. So, it’s better you declare the correct IDV.

If you are unsure about it, feel free to call the insurance company’s executive for guidance. Know more about IDV.

Discounts:

No Claim Bonus is a component that reduces the car insurance cost drastically. It is a discount offered by the insurance company to the policyholder for not raising a claim during the policy period. In most cases, you have to mention during the policy renewal process that you haven’t raised any claim by selecting a radio button.

Some insurance companies also offer a discount if you: have installed anti-theft devices in your car, are a member of Automobile Association of India, or are insuring a vintage car.

Timely Renewal:

Ensure to renew the policy before its expiry date. It is mandatory by law to be insured in India. Delaying the car insurance renewal process will mean that you lose out on the accumulated NCB (if any), break the law of the land, and be financially exposed to losses in case of an unfortunate event.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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