If you plan to buy a car during Diwali or anytime soon, it's wise to opt for long-term car insurance. While car insurance is legally mandatory, the festive season may bring discounts and special offers that can benefit you.
The benefits of a long-term policy include a discounted price for three years, fixed premiums even after a claim, and protection against losing the no-claim bonus, unlike short-term policies where premiums may increase significantly with claims and renewal prices rise annually
If you plan to buy a car during Diwali or anytime soon, it's wise to opt for long-term car insurance. While car insurance is legally mandatory, the festive season may bring discounts and special offers that can benefit you.
Having both third-party and own damage insurance is essential to protect you financially in case of accidents. You can choose different insurance tenures based on your preference. The minimum tenure is one year, but you can opt for a long-term plan to avoid the hassle of renewing annually.
In September 2018, the Insurance Regulatory and Development Authority of India (Irdai) made it compulsory for new car owners to have long-term third-party insurance. You can choose from either Standalone three-year third-party insurance or three-year third-party insurance with one-year own damage cover or post de-tariffing, insurance companies now offer three-year third-party insurance with three-year own damage cover. These options help you stay compliant with the law and avoid the yearly renewal process. Ignoring this mandate could lead to legal consequences.
The benefits of a long-term policy include that the (i) customer receives a discounted price for three years as a reward for long-term commitment. (ii) “Unlike short-term policies, where the premium may rise significantly in case of a claim, in a long-term policy, the price remains fixed for three years. (iii) In the case of an annual own damage (OD) policy, the customer loses no claim bonus in the event of a claim and hence the renewal prices go up. Whereas in a three-year long-term OD policy, the price does not change irrespective of claims,” says Subhasish Mazumder, head- motor distribution, Bajaj Allianz General Insurance.
You can tailor the policy based on your budget and coverage needs. Consider add-ons such as engine protection, Return to Invoice (RTI), zero depreciation, or roadside assistance to enhance your policy and provide extra security for your vehicle.
“Also, please pay attention to your car's Insured Declared Value (IDV), which represents its current market value. The IDV is crucial because it directly impacts your insurance premium. A higher IDV typically means a higher premium, but it also ensures better coverage in case of a claim. Specific add-ons like motor protection and depreciation cover are highly recommended for electric vehicles to provide additional safeguards for unique risks associated with EVs,” says Mazumder.
Additionally, some companies provide the most comprehensive product, like Vpay, relieving the client from choosing multiple add-on covers. Vpay providers cover all possible add-on covers for motor cars.
It's important to carefully evaluate the protection your car requires and choose from the wide range of optional covers that insurers offer.
When opting for long-term car insurance, it's essential to consider a few key factors carefully. First, recognize that a long-term policy is a three-year commitment. “While this offers benefits like avoiding yearly renewals, thinking about how your car usage might change over time is essential. Selecting the right add-ons, such as roadside assistance, engine protection, zero depreciation, or Return to Invoice (RTI), is crucial. These add-ons can enhance coverage and increase your premium, so choosing only those beneficial throughout the policy's duration is wise,” says Mazumder.
It's equally important to think about your future needs. You should evaluate the long-term utility of chosen add-ons. Additionally, compare different car insurance providers before purchasing a plan. Comparing policies allows you to assess coverage options, premiums, and features, helping you make an informed decision that balances cost and comprehensive protection for the years ahead.