Purchasing car insurance for first-time buyers can often be confusing. Many unfamiliar terms, plans, and pricing structures can confuse anyone. 40% of first-time buyers find it difficult to learn about insurance policies, while 72% find it challenging to compare insurance policies.
So, in such instances, the importance of a car insurance calculator is visible. An insurance calculator provides instant quotations and makes it easier for new buyers to make decisions. So, keep reading to know more.
How to Use a Car Insurance Calculator to Make Smart Choices?
Here are some tips to follow for effective use of a car insurance calculator for first-time buyers to make smart choices:
1. Include the Basic Car Details
Accurately enter the make and model of your chosen vehicle with fuel type and variant, as every car has a different repair cost. Since car insurance includes the cost of theft and damage, the premium amount varies from one car to another.
For example, for a Maruti Swift VXI Petrol car, you can get an accurate premium estimation with the use of the insurance calculator. It also guides you with the types of plans suited for your car.
2. Choose Policy Type
Selecting the appropriate policy is crucial. The premium depends largely on the coverage you opt for. First-time buyers generally benefit from choosing comprehensive plans along with relevant add-ons to enhance protection.
3. Check the Insured Declared Value (IDV)
The IDV represents the current market value of your car and is the maximum amount you will receive in case of total loss or theft. Choosing an IDV that reflects the actual value of your vehicle ensures adequate coverage without inflating your premium.
4. Opt for No Claim Bonus (NCB)
NCB is the reward for not filing a claim in your previous year’s policy. This discount rate, however, increases for each consecutive claim-free year. It can be as high as 50% based on the premium.
5. Choose a Personal Accident Coverage
Purchasing Personal Accident coverage is essential if you are driving in India. With this, you can avail coverage of up to ₹15 Lakhs against injury or accidental death. Use of the insurance premium calculator gives an accurate value of this coverage.
6. Apply Discounts Online
To save on premiums, look for offers or discounts available on your insurer’s official website. After checking the estimated premium using the calculator, apply these discounts to reduce your final cost.
7. Comparison Between Plans
Use the car insurance calculator to compare different plans offered by your insurance provider. You will get a clear idea of the provided coverage and premiums charged. For example, you might save ₹3,200 by selecting a plan with fewer add-ons but a higher IDV.
Why is Car Insurance Confusing for First-Time Buyers?
Choosing car insurance is confusing to first-time buyers due to the availability of several plan options and differences in pricing. Apart from this, there are many new buyers with no knowledge of key terms such as NCB (No Claim Bonus), IDV (Insured Declared Value), and Zero Depreciation. This makes it challenging to select the right plan.
Studies reveal that approximately 60% of first-time buyers are overwhelmed while choosing their initial policy. First-time buyers also end up overpaying and choosing a plan that does not offer adequate coverage. For these reasons, knowledge of a car insurance calculator is essential for first-time buyers to further simplify the process.
Key Factors to Consider While Using a Car Insurance Calculator
With the accurate use of a car insurance calculator, insurance companies provide an estimation of insurance cost and premium based on several factors. The key factors most car insurance premium calculators consider include:
For Used Cars:
- Details of the existing car insurance policy
- Car type and its type of fuel
- The car’s previous ownership details, including the details of the owner and other information
- Claim information if there is a submission of a claim during the previous year
- Detailed information about the change in ownership
For New Cars:
- Make and Model of Car
- Year of manufacturing of the car
- Details of registration, which include the registration number and place of registration
- The beginning date of the new car insurance policy
- Detailed information of the car owner driver that includes the name of driver, contact details, age, and address
Final Words
Overall, an efficient use of a car insurance calculator can turn confusion into clarity. It prevents work delay, saves time, and makes well-informed choices. The majority of first-time buyers nowadays prefer the use of online calculators to decide the right plan with comprehensive coverage. Using the right tool, a first-time buyer can feel informed and confident in making the right decision.
