Motor insurance: 8 key factors to consider when choosing the right policy

Motor insurance: With all the motor insurance plans out there, choosing the right one can be confusing. The cost of the premium is important, but you should also consider other factors. Here are eight key points you must consider:

1. Determine your coverage needs
Assess what type of coverage you need depending on your vehicle and how you use it. Decide if you need basic third-party liability insurance or more extensive coverage that protects against damage to your vehicle, theft, and natural disasters.

2. Check the Insured Declared Value (IDV)
IDV (Insured Declared Value) is the highest amount your insurance will pay if your vehicle is stolen or completely wrecked. Make sure it's based on your vehicle's current market value to avoid being underinsured or overpaying for premiums.

3. Consider add-on covers
Check the extra coverage options offered by insurers and pick those that suit your needs. Common add-ons include zero depreciation, engine protection, roadside assistance, and coverage for consumable parts like oil and filters.

ALSO READ | New insurance rule: What is e-Insurance? Benefits of e-Insurance Account for policyholders
4. Look for No-Claim Bonus (NCB) benefits
Look into the No-Claim Bonus (NCB) benefits that insurers offer for years without claims. Choose a policy that gives good discounts on renewals for not making claims, as this can lower your insurance costs in the long run.

5. Evaluate the deductible
This is the amount you're willing to pay out of pocket if you make a claim. Choose wisely to find a balance between affordable premiums and the costs you'll cover when you claim.

6. Review policy exclusions
Check the policy's exclusions to know what isn't covered. These can include things like consequential damages, illegal activities, or driving under the influence of alcohol or drugs.

7. Research the insurance company
Look into the insurance company's reputation, customer service, and how quickly they settle claims.

8. Compare premiums and benefits
Choose an insurer with solid finances and a track record of quick and easy claim settlements.

With inputs from Centre for Investment Education and Learning content which appeared in Economic Times

Ready to Master Stock Valuation? ET’s Workshop is just around the corner!