Thread by @ithoughtplan

Have you bought a car on the occasion of Diwali?🧨 While purchasing a car is an enjoyable process, choosing the correct insurance often becomes confusing.

Here is a short #thread on 7 things you should consider before buying #CarInsurance. (1/n)

#1 Should you take insurance from the tie-up dealer or with an outside agent?

Insurance from the dealership is often more expensive than when individually purchased. The reason is the dealer passes on the commission received on selling #insurance to the customer. (2/n)

✅What You Can Do: A prudent thing to do would be to check outside before going ahead with your dealer. This can also help you to negotiate better prices with your dealership. Policy bazaar is a great place to compare quotes from different insurance providers. (3/n)

#insurance

#2 Third-party Vs Comprehensive - Which plan should you go for?

Third-party insurance is mandatory, and it covers any damage incurred to a third party i.e. another vehicle. Comprehensive insurance is where own damages, as well as third-party damages, are covered. (4/n)

✅What You Can Do: Taking a comprehensive plan is the better option. A good practice would be to keep renewing comprehensive insurance coverage from the 2nd year on till the 5th year. (5/n)

#insuranceplanning #uncertainity

Best practice: A third-party cover will only cover the damages to the other person, whereas a comprehensive plan will cover the damages to both the self and the third party. (6/n)

#insurancecoverage

#3 What is not covered under car insurance?

❌Windshield Glass Cover

❌Key Replacement Cover

❌Spare Car Cover

❌Electrical Accessories

❌CNG Kit Cover

❌Tire Replacement Cover

❌Vehicle Replacement Cover

❌Consumables

❌Engine replacement (7/n)

#Insurance

✅What You Can Do: These are available as add-ons; you can pick and choose the ones that will be most useful for you. (8/n)

#vehicleinsurance

#4 What add-ons are worth it (in order of importance)?

✅Zero Depreciation Add-on

✅Return to Invoice Add-on

✅Consumables Add-on

✅Engine Protection Add-on

✅Protection of NCB Add-on (9/n)

#5 What is IDV? What % of IDV should you reduce each year?

IDV or Insured Declared Value is the value you will receive if your vehicle is stolen or damaged beyond repair. (10/n)

#CarInsurance #InsuredDeclaredValue #insurancechallenges

For example: You have a 1-year-old car its initial IDV is ₹10 Lakhs at the time of purchase. If you consider depreciation at 10% every year, your current IDV is ₹9 Lakhs which is the amount that you will receive in case your car is stolen. (11/n)

#insurance #insuranceplan

#6 What are the things that need to be checked when renewing your car insurance?

✅ IDV is reduced by a minimum of 10% from last year

✅ Premium is less than the last year (If you have not made any claim.)

✅ NCB (If applicable) is more than last year’s NCB (12/n)

#7 What is a Compulsory Deductible?

Compulsory deductibles are ones where the insured has no choice but to pay one part of the claim. As per IRDAI regulations, the compulsory deductible is ₹1k if the Car does not exceed 1500 CC and ₹2k if the Car exceeds 1500 CC. (13/n)

If you find this thread useful, retweet the first tweet that helps us to reach more people like you. (14/n)

#financialplanning #CarInsurance #personalfinance