New Car Insurance

You’re probably really happy after buying that car you’ve been talking so much about! We wouldn’t want to kill the happy bug, but with a new car comes a new set of responsibilities!

Now, let’s imagine this scenario- you’ve just planned a weekend getaway with your friends in your new car. With all that music and chatter, you suddenly hear a loud sound, and you realise your tyre has just burst! Yikes. If you’ve been responsible, you probably won’t make a big deal out of it.

After all, if you have car insurance in place, with the right add-ons, then this little accident won’t only be solved soon but will also not eat away your weekend budget. Why are we telling you this hypothetical story, anyway? To help you make some responsible choices of course! So, let’s get started- shall we?

Car insurance for new cars is an insurance policy for your new car that acts as a shield against unfortunate events. It helps cover your new car against thefts, financial losses caused by accidents and any subsequent liabilities you may come across unexpectedly. 

So, when you purchase a new car, you need insurance coverage before you can legally drive it. This is when new car insurance comes into play and ensures that your new car is protected from the moment you drive it off the lot

There are essentially two types of new car insurance plans- you can either opt for a Third-party car insurance or a Comprehensive Car Insurance. To make things easier for you, we’ve put down a table together that’ll help you compare the two, after which you can make the choice that suits you better.

In India, driving a car, new or old without a valid car insurance is illegal. As per the Motor Vehicles Act 1988, it is mandatory to have car insurance that at least covers third-party liabilities. However, having a new car policy is important for the following reasons:

Legal Requirement

In India, having at least a third-party car insurance for new cars is mandatory by law. Driving without it can result in a fine or penalty.

Financial Protection

Having a new car insurance policy can help you save significant expenses for any repair or replacement of car parts in case of an accident.  Additionally, you can also protect yourself from hefty traffic fines!

Avoid Third-Party Liabilities

Anyone can become a victim of road accident, and in case your new car accidentally damages someone's property, vehicle, or cause injury, your car insurance will cover the costs, saving you from any disputes and financial loss.

Enhanced Coverage with Add-Ons

Opting for comprehensive car insurance allows you to enhance your coverage with add-ons like zero-depreciation cover, return to invoice cover, consumables cover, and breakdown assistance, providing even greater protection for your vehicle.

There are several factors to keep in mind when buying car insurance for new cars. Paying attention to them will ensure that you fetch an ideal level of cover. Some of these factors include the following:

Here are the tips to save premium when buying car insurance for new cars:

• Compare and Customize: Search online for the best new car insurance quotes, compare them, and then go for the policy that suits your budget.

• Limit Add-ons: Try to avoid opting for unnecessary add-ons and consider only usage-based car insurance add-ons such as Pay As You Drive, if you don't drive much.

• Optimize Payment and Deductibles: Pay your car insurance premium on time to save on monthly premium payment. You can also consider increasing your deductibles to lower your premium. 

• Good Driving Habits: You can keep a good credit score by driving safely and staying accident-free to get better insurance rates and possibly more discounts.

No Claim Bonus or NCB is a discount offered to policyholders who do not file any claim in a policy year, as a reward for safe and responsible driving. The best part about it is that NCB keeps on accumulating for each year you do not make a claim, up to a maximum of 50% of the car insurance premium.

Now, here are some things that you should know about the role of NCB in reducing your new car insurance premium:

Use Your NCB When Buying a New Car

When buying a new car, you can transfer the accumulated NCB from your old car insurance to the new policy, if applicable. Since NCB accumulates each year without a claim, you can get a discount of up to a maximum of 50% on the new car insurance policy. This can significantly reduce your new car insurance price.

NCB Certificate

Know that your No Claim Bonus is transferable whether you buy a new car or switch to a new insurer and you can benefit from the NCB certificate to avail the discount. 

However, to transfer the NCB, you need an NCB certificate. If you're buying your new car insurance policy offline or through an agent, you'll need to transfer your No Claim Bonus (NCB) by submitting your buyer-seller agreement (Forms 29 and 30) along with a letter requesting the NCB transfer from your current insurance company.

The insurer will then issue an NCB certificate, which you must submit to your new car insurance company.

However, if you're buying a new car insurance policy online, you don't need to go through this process. Simply declare the correct NCB, provide your old policy number and the name of the insurer, and your new insurance company will handle the rest.

Furnish the following documents along with the application:

• Copy of delivery note that you’ve received for the sale of the old car

• Copy of insurance policy of the old car

• Copy of the booking form that you received for purchasing the car

• Transfer application

• Buyer-seller agreement (Forms 29 & 30)

• Copy of transferring the old RC if you’re selling your old car

• NCB certificate from the insurer 

The best of us prefer to escape all the time and energy that will go into looking for the right insurance company online or offline. No wonder, many people are tempted to opt for any car insurance offered by dealers. It saves time and of course, it is convenient. But is it the right thing to do? Let’s see what can go wrong if you plan to buy a policy from your dealer:

• You will get limited options - Once you’ve purchased your car from the dealer, the second thing they’re likely to sell you a car insurance policy. While this may be convenient, it comes with the disadvantage of limited options, as compared to options online. Additionally, your car dealer will probably have tie-ups with specific insurance companies and will offer you insurance solutions provided by these companies only.

• Best Add-ons - You won’t have the freedom to choose from a wide range of add-ons that can give your car better coverage. Buying a car insurance online gives you the benefit of customizing your plan with different add-ons to choose from. 

• Can’t compare rates - Comparing rates is very important but when you plan to buy insurance from a dealer you will not get this opportunity. 

We recommend go online, do some research or better, directly buy your car insurance policy online. The process is fast, there’s no paperwork and the best part- you know exactly what to expect out of your car insurance since you’ll be the one choosing it!