Avoid buying insurance from car dealers as they are usually bundled as part of the deal and may have very little to offer
Avoid buying insurance from car dealers as they are usually bundled as part of the deal and may have very little to offer
Ashwini Dubey
Car owners’ relationship with their vehicle is often in stark contrast to the relationship they have with their car insurance.
Overwhelmed by the excitement of buying a new car, most buyers don’t even think about insurance.
From the time one decides to own a car to the time it is delivered, most of the research and effort goes into the vehicle’s specifications. Car insurance, on the other hand, is treated as an “extra purchase”.
Insurance is often bundled as part of the deal handed over by the dealer.
Because who wants to think about damage when buying? However, to the chagrin of car owners, accidents on Indian roads are as real as they get – 4.5 lakh road accidents a year to be precise. With such an alarming number, insurance is more than just a mandate to avoid a hefty fine, and instead becomes a shield protecting you and your prized possessions. Therefore, it is important to give car insurance buying its fair share of research. If you are a prospective car buyer looking for an insurance policy, don’t rush to grab the policy your dealer will hand you.
Limited options
Models, features, accessories and what not? Buyers can’t get enough of exploring unlimited options for each of these options before settling on their dream car. Why not do the same if you buy a protective shield for it? Car dealers are not the main dealers of insurance. They typically have an affiliation with a limited number of insurers and make a profit from the sale of insurance. For many insurers, car dealerships are the best point of sale to acquire a customer. But before you tackle it, ask yourself is this the best thing you can do to protect your vehicle in the event of an unfortunate accident? There is a high probability of taking a cookie-cutter approach in designing these insurance policies with similar benefits for each buyer. It’s always wise to opt for the policy that best suits your needs, rather than a pre-approved approach.
More expensive offer
A bundled auto insurance quote may include certain additional features or add-ons in the policy. The retailer acts as the best medium to present these features to the customer. Although useful at times, not all features are useful to the buyer, but he or she still buys the policy. This later leads to more expensive premiums. Also, every add-on has its price. It is the customer who may pay up to 40% more in the dealer-insurer agreement. So don’t rush into anything you might regret later.
For example, if you live in an area where you don’t think your car will be exposed to much water, or you can go the extra mile to carefully protect your engine, you may choose not to purchase the engine protection cover.
On the other hand, customers could also be enticed into paying more expensive premiums for a deal that may or may not include adequate supplemental insurance. There is a chance that the buyer may need coverages such as roadside assistance, depreciation or accident insurance but are not aware of this at the time of purchase. In this case, they will have to opt for such add-ons later, which might cost them more. So don’t rush to buy something you might regret later.
Loss of Online Benefits
Technology is the basis of the modern world and everything you need is always at your fingertips. While insurance is still perceived as a distribution-driven product sold via the foot-on-the-road model, you can buy insurance online just as easily as anything else. Since the digital medium makes any manual intervention superfluous, the cost reduction is also reflected in the tariffs. This is just one key advantage among many others of buying car insurance online.
You can browse tons of options and customize your features to suit your needs. You can also get credible reviews from other policyholders and choose the best option. As we are still in the midst of a pandemic, you can safely do the end-to-end shopping online from the comfort of your own home. Buying online is also much more convenient. If you need help, you can speak to the insurer or aggregator via audio or video calls. You can easily compare important aspects of a policy such as the claims settlement rate or the declared value of the insured (IDV).
Buying the coveted car is a moment of great importance for the owner, not only financially but also emotionally. However, it’s equally important not to let that excitement overwhelm you or lock you into a subpar insurance contract.
(Author is Head-Motor Insurance Renewals, Policybazaar.com)
