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How To Compare Car Insurance

Sampurna Mitra|4 min read|27 July, 2022

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When you wanted to buy that watch you’re wearing, what was the first thing you did? You probably visited stores or went online to research on the features and prices of various watches. Taking this step helped you make an informed decision about your purchase. That is exactly how you must buy car insurance. You look at the plans offered by different providers, compare car insurance quotes and buy a plan that fits all your needs.

Now, the market is flooded with a wide range of car insurance policies. As a result, it can get confusing to know which policy would be the best fit. In this article, we will look at how you must compare car insurance policies and find the right one that takes care of all your insurance needs.

But before we look at the ‘how to’, let’s quickly understand what car insurance is.

Car insurance can be purchased in two ways –

  • A third-party liability insurance and comprehensive car insurance. Third-party liability insurance is the most basic form of car insurance, whereby any liability that arises because of your vehicle to a third-party individual or property is covered.
  • A comprehensive car insurance policy, on the other hand, covers third-party liability as well as offers protection from any loss or damage to your car.

The choice between the two is up to you, but the obvious benefit of the latter stands out. Keep in mind that having a third-party insurance cover in place is mandatory by law for all vehicle owners.

Factors To Keep In Mind When Comparing Car Insurance

The market is flooded with car insurance policies. If you are able to identify your needs, you can find the perfect car insurance policy. Here are some important factors to be kept in mind when you compare car insurance online.

  • Insured Declared Value

You will not receive the total value of your vehicle in case of its total loss. Instead, the amount payable will be the Insured Declared Value. This is the maximum amount that an insurance company will pay out in case of total loss of your vehicle. IDV represents the current value of your vehicle. Every object depreciates, and IDV is calculated after factoring depreciation from the listed selling price.

Now, the IDV quoted by one insurer can be different from another insurer. Insurers will have their parameters for calculation. Hence, we recommend checking the IDV of various insurers and going ahead with the provider that offers high IDV.

  • Cashless Claims Facility

On the PhonePe app, you will see the term Network Garages against comprehensive policies. This tells you how many garages the insurance company has tied up with for providing cashless claims facility to policyholders. What this means is that if your vehicle is repaired at a network garage, the insurance company will pay the garage directly. Look for an insurance company with a wide range of network garages, especially in the routes you often drive.

  • Add on Covers

Add-ons are like the toppings in your ice cream. Just like how the toppings enhance the look and taste of the ice cream, including add-ons to your car insurance policy gives you extra protection. The number of add-on available will be different for every insurance provider. Additionally, each add-on will have its own premium. When you compare car insurance online, we recommend looking at the add-ons available as well. Please note, you can only avail add-ons with a comprehensive car insurance policy.

  • Claim Settlement Ratio

This tells you the number of claims settled by the insurance company in comparison to the total claims filed. When you compare car insurance online, it is advised to shortlist those providers with a high claim settlement ratio. You must also check the consistency of the ratio, at least for the previous 5 years. The IRDAI publishes the claim settlement ratio of the insurance companies in the industry on an annual basis.

It’s important to remember that a high or low claim ratio is not a guarantee of acceptance or rejection of your claim. The insurance company will factor in multiple parameters before taking a decision on the claim.

How To Compare And Buy Car Insurance on PhonePe App

You can compare the benefits of various car insurance policies on the PhonePe App. Depending on your needs, you can pick from Comprehensive Plans, Third-Party Plans and Own Damage Plans. Below are the steps you need to follow to compare and buy car insurance on PhonePe App:

  1. Tap Insurance at the bottom of your PhonePe app home screen. You can also tap See All under the Insurance section on the home screen.
  2. Tap Car under Motor and Travel
  3. Enter Registration Number of your vehicle and tap View Plans
  4. Choose from Third Party, Own Damage or Comprehensive Insurance Plan
  5. Compare the plans on the basis of the benefits, IDV and premium. Select the policy of your choice.
  6. Add-ons (if applicable to your policy selection) will be listed. Pick your preferred add-on, provide details of your car and proceed to pay the premium.

How To Choose The Right Car Insurance

We don’t make a purchase unless we know the price. In case of car insurance, premium, which is the price of a policy, is considered when comparing car insurance policies. You shouldn’t avail a car insurance policy simply because the cost is low. You must compare the benefits you’re deriving against the cost.

The lowest premium among the car insurance categories applies to third-party insurance. However, keep in mind that this is the most basic form of car insurance and you cannot opt for add-ons with it. It doesn’t cover loss or damage to your vehicle, but protects you from liabilities arising due to property damages, injuries or death of third parties if your vehicle is at fault.

And finally, take your time to go through the terms and conditions. There will be conditions associated with making a claim as well as the benefits you can claim. Carefully read them before buying a car insurance policy as this will ensure you don’t face any hassles during the time of claim settlement.

Before you buy a car insurance policy, it is highly crucial that you compare what is offered by different insurance providers. Choose a plan whose premium fits your pocket and benefits cover all your insurance needs. On the PhonePe app, you can compare policies of various insurance providers based on the factors mentioned above. You can purchase the policy in just a few taps and it will be issued instantly*.

*In case of renewal of an expired car insurance policy on the PhonePe App, the renewal may take some time.

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