How to Compare Car Insurance

Comprehensive insurance provides complete cover for your vehicle. It protects against any risk of loss accrued due to theft, damage to the vehicle, injury or death of the driver and/or passengers in the vehicle, and loss caused by the vehicle to other persons or their property.

Third-party insurance covers only damage caused by the vehicle to other people or property. 
The policy premium of a new car is based on the sales value of the car. Where as, the policy premium for an old car is based on the Insured Declared Value (IDV). The IDV is nothing but the depreciated value of the vehicle. This value is agreed upon by both the insurer and the policyholder. Generally, the insurance companies have a pre defined list of the IDVs of the vehicles, brand wise, model wise and year wise. However, the conditioned of the vehicle will determine the final IDV.  

The insurance company is not liable to compensate if the driver was driving with invalid driving license at the time of accident, or for damages occurred under the influence of drugs or liquor, riots, civil war etc. If a private car meets with an accident while being used as a taxi, the insurance company is not liable to compensate.

Generally, the car insurance is sold at competitive rates. The following factors should be borne in mind before buying a Car Insurance:
No Claim Bonus: If the car owner does not make any claims on the motor insurance policy in a year, the insurance company gives a discount in the premium in the subsequent year. This discount is called No Claims Bonus. The policy holder gets a discount of up to 20% for no claims in the first two years. This discount percentage goes on increasing in the subsequent years as long as no claims are made. The opposite is also true. If a claim is made in two consecutive years, the premium will go on increasing. The No Claims Bonus clause should be read thoroughly before finalizing a Car Insurance Policy. 
Memberships: If the vehicle owner is a associated with a recognized automobile association, then the owner would get a discount on the premium. If the vehicle owner fits an anti theft alarm or any protective device in the vehicle, then he is eligible for a further discount in the premium. The anti theft device should be authorized by the same Automobile Association.
Special discounts available for handicapped people, available or not: Certain companies offer special premium discount for handicapped persons.

To avail this discount, the vehicle should have been altered for the use of the handicapped person. Different insurance companies offer varied discount rates. In case you are using such a vehicle, then compare the discount rates before going in for a car insurance.
Easy renewal procedure: Apart from monetary factors, check which company offers simple and easy paper work for renewal as well as for claims.

Katherine E. Ackerman

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