By: Mayank Gupta, Vice President – Motor Insurance, ACKO
Are you planning to buy a new car? You must have thought about color, engine, features and price. But have you thought about the car insurance you need to buy with your new car? If not, let us help you.
It is a common assumption that one can or should obtain car insurance from a car dealership when purchasing car insurance. Car buyers think the dealership can help them get a good deal while getting insurance, but that’s not the case.
When buying auto insurance, you need to do your due diligence just like you did for the car. You can view the different policies available online, compare their features and premiums, and choose the best policy for your needs.
Here’s a quick checklist you should remember when shopping for new car insurance.
Know your insurance rights
As a new car owner, you have every right to collect and obtain correct information about the car insurance you are considering purchasing. While dealerships serve as outlets for insurance companies and offer a good deal, car buyers do not get the most suitable insurance policy for the car. Thus, before buying a policy from a car dealership, one should always cross-check the offers of the various insurers, including the insurers of the new era.
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Digital native companies sell bespoke fonts that meet all requirements at a very low cost which can be around 20% less. This is possible because new-age businesses pay no commission to agents and pass this benefit on to customers. With the proper knowledge, you can save a considerable amount of money when purchasing an auto insurance policy and renewing the policy.
‘One Size Fits All’ is a misconception
It is generally accepted that “one size fits all” when buying car insurance. You must not fall into this trap and must always identify what you are looking for and adapt your insurance policies accordingly. Once you have identified your needs, you can ask your insurer to provide for them, and you can pay for them. You won’t need to pay for features that don’t apply to you.
Two ways to buy car insurance
You can either purchase insurance from a dealer or directly from an insurer. It is perceived that the car dealer is authorized to sell insurance policies, but this is not the case. Auto dealerships are positioning traditional insurers as the best possible options and preventing customers from turning to other new-age insurers that offer custom policies at a lower premium. There are several choices to consider before opting for a new car insurance policy.
The untold truth
Most dealerships have a flat rate card and customers can choose any carrier from the list, but the price remains the same. Generally, the dealer pushes the insurance company, which gives them the highest commission. Usually, customers unknowingly end up with the burden of premiums charged due to this additional commission. Although Indian laws make it compulsory to purchase insurance before the car hits the road, buying it from your dealership is not mandatory.
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The Insurance Regulatory and Development Authority of India (IRDAI) states that customers have the freedom to purchase insurance from whomever they want. The consumer can also opt for an insurance policy with a digital native insurance company. These new-era companies offer buyers better benefits like huge premium savings, hassle-free renewal, and fast settlement.
The power to choose your add-ons
Dealerships offer generic auto insurance, often bloated with extras that aren’t necessary. However, when customers buy directly from the insurer, they can add custom add-ons such as engine protection, zero depreciation coverage, roadside assistance, etc., at an additional cost. Thus, the power to choose add-ons belongs to the customer and not to the reseller.
To sum up, it is safe to say that we should do our due diligence before buying any insurance product, because the devil is in the details.
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of Indian Express Group or its employees.