Most of the states in India require a car or any other vehicle to be insured. It’s not much of a choice really; it’s kind of a mandate. So it goes without saying that if you want to drive a car legally, you must have an insurance. Generally, a car insurance policy includes the following requirements:
• Own Liability
This cover includes compensation benefits for the damage caused to your vehicle due to natural or manmade calamities such as fire, explosion, storms, earthquake, theft, burglary, and so on. It may also cover expenses incurred due to damage to your own vehicle and injuries endured by you and the people in your car.
• Third party liability
This policy helps cover the expenses when you are at fault in an accident. The benefits from this policy will go to the person you have hit. However, it does not cover any expenses for you or the people in your car. This cover is for the third party in an event that your vehicle causes damage to the third party or in case of any major injuries caused to them.
When it comes to deciding how much you should spend on your car insurance, the following tips will come in handy:
• Check your state’s minimum insurance requirements
It is of absolute importance that you know the minimum insurance requirements of your state. Mostly, all states require car owners to have an insurance policy. If you are found to be driving without a valid insurance policy, then your vehicle can be taken into legal custody due to infringement of law.
• Research about the different types of coverage available
It is important for you to do a little bit of research yourself to realize your own requirements. An in-depth understanding of comprehensive and collision coverage can help you decide how much you really want to spend on your car insurance policy. In short, if your car is damaged in event of an accident, collision coverage will cover it but if your car is damaged due to theft or something other than collision, then the expenses will be covered by a comprehensive coverage.
• Pay routine repair costs with your own money
Take care of minor damages to your car all by yourself and fix them by paying it from your own pocket. You must utilize the insurance policy for major damages and not for every single time something goes wrong with your car. Filing a claim for minor damages makes you less efficient because this would lead to higher premiums. You must opt for the highest deductible you can afford because this will significantly lower your premium.
At times, a policy that satisfies your basic requirements is all that you need. Ultimately, you must have a very clear idea about your requirements to help you deduce the amount you need to spend on your car insurance policy.