All you need to know about car insurance

As a car aficionado, I am sure that you research extensively before buying your dream machine. I am sure that you spend hours deciding the color, the fittings and the interiors you would want for your car. And being a car enthusiast myself, I can vouch that you get an adrenaline rush the first time you take that car out for a drive.
There is of course an additional formality which you have to finish before buying car that is getting a car insurance policy, as it is mandatory. I am sure that most of us do not put much thought into buying the adequate car insurance for our vehicle. More often than not we end up buying the car insurance, from the insurer that your dealer has a tie-up with and put no thought what-so-ever in choosing the right policy.
Most of us do not realize it at the time, but this is a big mistake for which you pay in the future. When you invest your hard earned money in buying the car, you must protect it financially against all eventualities. And therefore, to me, getting an appropriate car insurance cover should be just as important as buying the car.
Instead of settling for the car insurance offered by your dealer, you must conduct a thorough market research and
choose a comprehensive car insurance cover to protect your investment. Here is a guide to all you want to know about car insurance:

Buying car insurance:
There are two crucial components in a comprehensive car insurance policythird-party liability cover and own damage (OD) cover.

Third-party insurance cover - Third-party liability cover is a mandatory cover without which you cant take your car on the road. It insures damages to life or property of a third party due to your vehicle. This is to say that if your vehicle is involved in an accident, then your third party insurance will cover for all the damages of the other driver and vehicle involved.

Own Damage (OD) cover This is an insurance which covers damages to your own vehicle in case of a road mishap. Typically people go for the third party insurance and ignore this part and end up paying a bomb as medical and repair charges. Comprehensive car insurance must include both these elements. There are a lot of car insurance policies available in the market. However, before zeroing in on any particular policy, it is advisable that you compare policies offered by different companies. Comparing will help you make an informed choice and help you save on money as well. Few parameters you must evaluate your car insurance policy on are coverage in terms of repair cost, medical cost etc and the premium.

Maintaining car insurance:
Once you have bought the policy, maintaining it well is also important. Your car insurance needs to be renewed every year and you must make sure that you do not have any breaks in between. While a break will not impact your third party insurance a lot, the repercussions on your OD cover can be serious. In case of a break in the policy, for OD cover, the insurer will first inspect and photograph your car to document any pre-existing damages to the car which the insurer will not cover going forward. If you do not renew you insurance in time, the insurer also reserves the right to revoke your no-claims bonus or give you a lower bonus. A no-claim bonus is the discount that you get on your premiums for each year you dont make a claim. This no-claim bonus is applicable on the premiums that apply for the OD cover. So every year when you renew your policy, you get a discountthat goes up to 50% of the premiumon the premium. So a refusal of no-claim bonus means you pay a higher premium for the cover.
In case your vehicle has too many dents or damages, the insurer can refuse insuring you altogether.

Renewing car insurance:
Renewing car insurance is fairly simple. Firstly review your policy. Your renewal is a good time to review your policy to verify discounts or make changes to coverage. It is a nice reminder because sometimes insurance is easy to forget if you havent had the need to use it recently.
Next is to make your payments. Notify the insurance company you want to continue the policy. It is especially important to pay your renewal payment on time because some carriers do not allow any grace period on renewals. It is equally important to cancel your insurance policy if you do not want to continue because some companies do extend a grace period and may charge you for the grace period if you do not notify them of cancellation.
In case you are unhappy with the services of your insurer, you can also switch your insurer at the time of policy renewal. Switching your insurer is a simple process. You will need the policy renewal notice from your current insurer along with the complete proposal form. However, try not to switch mid-term as you will lose out on many benefits. Also, the customer will not be eligible for a no claims bonus, which is calculated on a yearly basis. Also, your insurer can charge penalties for cancelling the policy midway so its best to switch at the time of renewals. But make sure that you buy a new policy first and then cancel the existing one and there isn't any gap between the date when your old policy expires and the commencement of the new policy date. If the old policy is cancelled even a few days before the new policy is obtained there will be a break in cover, which is not desirable. Also, do not forget to compare product features before switching. The online insurance product aggregators can be of help for this.

Cancelling your car insurance:
If for some reason you want to cancel your policy, all you need to do is inform your insurance company in writing, specifying the date you want the policy to be cancelled and the reason for the cancellation along with proof of an alternate insurance policy.
Do not forget to get a certificate from your present insurer for your no-claims bonus eligibility. Buy the policy from the new insurer before the expiry date of the existing policy to avoid a break in insurance cover for your vehicle.
In case you decide to sell your car, you can get the policy transferred by sending a transfer request to the insurance company. However, in this case, the no claim bonus (NCB) on the policy is not transferred and the difference has to be paid by the insurer.
Alternately, you can cancel your policy and buy a new policy. You will get a refund for the unexpired / unused period provided there is no claim on the policy. In this case too, you can retain your NCB and transfer it to your new insurance policy if you have purchased another vehicle. The buyer can transfer NCB in his previous policy to his new one. Your policy will be cancelled only if the insurance company is provided with the proof that the vehicle is covered by another policy.
So next time you buy a car, do not be lazy while buying insurance for it. Remember the mantra of stop, compare and save to keep both your car and yourself financially secure.