Buying car insurance is not just a legal rule in India. It is also a smart financial step. A good policy protects you from high repair costs and legal trouble. Still, many people make simple mistakes while buying car insurance. These mistakes can lead to claim rejection or low coverage.
Most buyers focus only on price. They ignore important policy details. This creates problems later. To help you make the right choice, here are the most common mistakes to avoid when buying car insurance in India.
Buying Insurance Only for Low Premium
Many people choose the cheapest car insurance plan. This is one of the biggest mistakes. A low premium often means less coverage. It may not include useful add-ons.
Cheap policies may have:
- High deductibles
- Limited coverage
- Poor claim support
Always compare coverage, not just price. A slightly higher premium can give better protection and peace of mind.
Ignoring Policy Coverage Details
Not reading the policy document is a common error. Many buyers do not know what their policy covers.
Some policies do not cover:
- Engine damage due to water
- Electrical failures
- Key replacement
Read the inclusions and exclusions carefully. Understand what is covered and what is not. This helps avoid surprises during claims.
Choosing Only Third-Party Insurance
Third-party insurance is mandatory by law. But it covers only damage to others. It does not cover damage to your own car.
If your car is new or valuable, third-party cover is not enough. A comprehensive policy is a better option. It covers:
- Own car damage
- Theft
- Natural disasters
- Accidents
Comprehensive insurance gives wider protection.
Not Adding Useful Add-Ons
Add-ons improve your car insurance coverage. Many buyers skip them to save money. This can be costly later.
Popular add-ons in India include:
- Zero depreciation cover
- Engine protection
- Roadside assistance
- Return to invoice
For new cars, zero depreciation is very useful. Choose add-ons based on your driving needs and location.
Giving Wrong Information While Buying
Providing incorrect details is a serious mistake. Even small errors can cause claim rejection.
Common wrong details include:
- Incorrect car model
- Wrong fuel type
- False claim history
Always give accurate information. Be honest about past claims. Correct details ensure smooth claim settlement.
Not Checking Claim Settlement Ratio
Many buyers ignore the insurer’s claim settlement record. This is risky. A low claim settlement ratio means more claim rejections.
Before buying, check:
- Claim settlement ratio
- Customer reviews
- Network garage list
Choose an insurer known for fast and fair claims.
Missing Policy Renewal Date
Letting your policy lapse is another common mistake. A lapsed policy means no coverage. You may also lose your No Claim Bonus.
Driving without valid insurance can lead to:
- Heavy fines
- Legal issues
- Loss of NCB
Set reminders for renewal. Renew on time to keep benefits active.
Not Using No Claim Bonus Properly
No Claim Bonus is a reward for safe driving. Many people do not use it correctly.
Key points to remember:
- NCB can reduce premium up to 50%
- It can be transferred when changing insurer
- It is linked to the owner, not the car
Always inform the insurer about your NCB while renewing or switching.
Buying Insurance Without Comparing Plans
Buying from the first insurer you see is a mistake. Car insurance plans differ in price and benefits.
Always compare:
- Premium
- Coverage
- Add-ons
- Claim process
Online comparison helps you find the best plan for your needs.
Ignoring IDV Value
Insured Declared Value is the car’s current market value. Many buyers choose very low IDV to reduce premium.
Low IDV means:
- Lower claim payout
- Less protection
Choose a correct IDV. It should match your car’s real value.
Final Thoughts
Buying car insurance needs careful attention. Small mistakes can lead to big losses. Do not rush the decision. Read policy details. Compare plans. Choose the right coverage.
A good car insurance policy protects your car and your wallet. Avoid these common mistakes and enjoy stress-free driving on Indian roads.
If you want to save money and get the right cover, always make an informed choice.