4 common mistakes people make and end up overpaying for car insurance

Car insurance is much more expensive than two-wheeler insurance. In fact, the average single year, a comprehensive policy will set you back around Rs. 10,000-15,000/- and that’s a conservative estimate. However, every penny you spend is worth it as you are buying yourself a financial safety net that will help you bounce back from the financial impact of an accident.

It is only a problem when people end-up overpaying for this financial safety because of simple errors due to lack of understanding or clarity during the purchase process. This results in a waste of money and is a mismatch of cover as well. However, you can avoid all of this by NOT making the 5 purchase errors mentioned in this article.

1. Setting a high IDV when buying car insurance.

When you buy a policy, you have to set the Insured Declared Value or IDV of your policy. IDV is simply the market value of your car insurance and is the amount your insurance company will provide in case of a total loss or theft of your vehicle. Ideally, your IDV should be the market value of your vehicle. However, some people set a higher IDV to get a higher payout if and when the unimaginable were to happen.

What they don’t know is that their premium is directly proportionate to the IDV they set. Meaning, a higher IDV will result in higher premiums.

                                               
                                                  

2. Opting for too many add-ons.

Some buyers go overboard when it comes to add-ons. They want to get protection from every kind of uncertainty. And though it’s good to be prepared for anything, it does not make sense if you do not need the protection of a certain add-on. You should opt for ones that make sense to you and that you feel will be required. Being over insured is just a waste of money.

3. Not opting for long-term plans.

Car insurance is much more affordable when you buy it for longer periods of time at one go. This is because buying long-term plans safeguards you from the yearly price hike of third party insurance. You get the current rate locked for 3 years or more. Insurers also provide discounts for the buyers of long-term plans. So if you’re going to buy car insurance, don’t make the mistake of buying a single policy, buy a multi-year policy instead and enjoy better savings.

                                               

                                        

4. Not comparing.

Preferences might skew your decision-making process. You might hold a certain insurance company in high regard or favor a certain insurer - but that doesn’t mean you skip on making a thorough comparison before purchasing a car insurance plan. This could prove costly, simply because there could be more affordable plans that provide the same amount of cover.
Staying away from these mistakes should ensure you enjoy a cost-efficient process when purchasing car insurance. For further information, simply contact a motor insurance company near you. We hope this article has been helpful, good luck and drive safe!