5 Essential Car Insurance Tips for Beginners

Introduction 

Car insurance buying for the first time can feel confusing, especially with so many policies, add-ons, premium options, and coverage terms available. As a beginner, it’s easy to feel overwhelmed or unsure about what to choose. But with the right guidance and understanding, you can secure a car insurance policy that protects your vehicle, your finances, and your peace of mind.

 

Tip 1: Understand the Types of Car Insurance Policies

Before you start comparing plans or checking premiums, it’s important to understand the basic types of car insurance available in India. This forms the foundation of your decision.

1. Third-Party Car Insurance

This is a mandatory policy as per law. It covers:

·        Damage to third-party property

·        Injury or death of a third party

However, it does not cover damages to your own vehicle.

2. Comprehensive Car Insurance

This is a more secure and recommended option because it covers:

·        Third-party liabilities

·        Damage to your own car

·        Theft, fire, natural calamities, vandalism

·        Add-on cover customizations

For beginners, comprehensive insurance is the safest and most practical choice because it protects both your vehicle and your pocket.

 

Tip 2: Choose the Right IDV (Insured Declared Value)

IDV is one of the most important elements of car insurance, yet beginners often overlook it. IDV represents the current market value of your car and determines:

·        Your premium amount

·        Your maximum claim amount in case of total loss or theft

How to Choose the Right IDV?

·        Avoid selecting a very low IDV just to reduce premiums. This may lead to insufficient compensation.

·        Do not opt for an unrealistically high IDV as it unnecessarily increases your premium.

·        Always choose an IDV close to the actual market value of your vehicle.

Choosing the right IDV ensures fair premiums and appropriate protection when you need it.

 

Tip 3: Select Useful Add-On Covers

Beginners often purchase a basic plan without understanding the value of add-ons. Add-ons enhance your policy coverage and offer financial protection in situations that standard policies do not cover.

Here are the most useful add-ons for beginners:

Zero Depreciation Cover

Ideal for new cars, this ensures no depreciation amount is deducted during claim settlements.

Engine Protection Cover

Useful for preventing losses due to damage to the engine or gearbox from water ingression, oil leakage, etc.

Roadside Assistance Cover

Helps during emergencies like breakdowns, flat tyres, towing, dead batteries, or fuel shortage.

Consumables Cover

Covers small yet necessary items like nuts, bolts, oils, washers, and more.

Key Replacement Cover

Covers the cost of replacing or repairing car keys if lost or damaged.

Add-ons may slightly increase the premium, but they provide significant value by reducing large out-of-pocket expenses during claims.

 

Tip 4: Compare Multiple Car Insurance Quotes

One of the biggest mistakes beginners make is buying the first policy they see. Instead, you must compare different policies to ensure maximum value.

What Should You Compare?

·        Premium amount

·        Coverage inclusion

·        Claim Settlement Ratio

·        Cashless garage network

·        Add-on options

·        Customer support quality

·        Deductibles

Comparing helps you:

·        Avoid overpaying

·        Understand the difference between coverage types

·        Identify hidden benefits or exclusions

Remember, the “best” car insurance plan is the one that provides maximum coverage at a fair premium—not the cheapest one.

 

Tip 5: Check Claim Settlement Process and Insurer Credibility

A good policy is only valuable if the insurer processes claims smoothly. Beginners should always check how reliable and customer-focused the insurer is before making a purchase.

Look for These Indicators:

Claim Settlement Ratio

A higher CSR shows the insurer settles most claims efficiently.

Customer Reviews

Look for real feedback related to:

·        Claim process

·        Customer support

·        Transparency in communication

Network Garages

A large network of cashless garages ensures quick and hassle-free repair service.

Digital Claim Filing

Modern insurers offer app-based, online, or self-inspection claim processes, making claim filing faster and simpler.

Choosing a trustworthy insurer ensures you get support when it matters the most.

 

Bonus Tip for Beginners: Understand Exclusions Before Buying

Many first-time buyers only focus on what is covered. But knowing what is not covered is equally important. This prevents claim rejections and avoids misunderstandings.

Common exclusions include:

·        Driving without a valid licence

·        Drunk driving

·        Wear and tear

·        Mechanical breakdown (without add-ons)

·        Unauthorized vehicle modification

·        Driving outside geographical limits

·        Using private cars commercially

Reading the policy document thoroughly helps you choose the right plan and use it responsibly. 

Conclusion

As a beginner, choosing the right car insurance may feel complicated, but following these essential tips simplifies the entire process. Start by understanding the types of policies, selecting an appropriate IDV, choosing practical add-ons, comparing multiple insurers, and checking the claim process and reliability. Car insurance is not just a legal requirement but a financial shield that protects you from unexpected expenses and ensures peace of mind.

If you’re looking for a reliable platform to explore beginner-friendly car insurance plans, Square Insurance offers transparent options, helpful support, and comprehensive coverage tailored to your needs.

 

Frequently Asked Question

1. Which type of car insurance is best for beginners?

Comprehensive car insurance is best because it covers both third-party liabilities and damages to your own car.

2. Do I need add-ons as a beginner?

Yes, useful add-ons like zero depreciation, roadside assistance, and engine protection can save you from large repair costs.

3. Is it necessary to compare car insurance plans?

Absolutely. Comparing plans helps you find better coverage at an affordable premium.

4. Does No Claim Bonus apply for first-time buyers?

No, NCB is earned only after completing a policy year without making any claims.

5. Can I change my insurer during renewal?

Yes, you can switch insurers anytime during renewal without losing your accumulated NCB.