Car Insurances 234 views
It is vital to get your car insured as the policy cover indemnifies you from the losses caused on account of accidents, theft of the vehicle, etc. With the growth in number of car buyers, the number of insurers and agents have also risen significantly. In order to lure the customers, car insurers are offering a gamut of discounts. Also, customers are increasingly bargaining to cut down the premium on their car insurance. And so often it is being found that the premium gets reduced by the insurer or the agent upon hard negotiation. But it comes at some costs, which can be a sheer disadvantage to you in terms of cover to your car. So, you need to be vigilant and read the below mentioned points to stay away from the problems that may bite you otherwise.
Lowering of car value
Generally, mis-selling gets committed while you buy an insurance policy from an agent. Upon hard negotiation with the agent, he/she may reduce the value of your car to lower your premium. But doing the same will result in the lowering of insured declared value (IDV) and thus deprive you from gaining the full cover while you make claim with the insurer. Suppose the value of your car is Rs 7 lacs and you are charged a premium of Rs 22,000. Upon hard bargaining, the agent may cut down the value of your car to Rs 6.5 lacs and thus lower the premium by around Rs 2,000. But, this will lead to less cover for your car, and so you will get a lower payout while you file the claim. So, do ask the agent about the IDV of your car while settling for a lower premium amount.
Increase in voluntary deductible
When the insured bears the financial loss, then it is known as deductible, classified into either compulsory or voluntary. On an IDV of say Rs 6.5 lacs, you can get a lower premium offer of Rs 18,930 with a voluntary deductible component of approximately Rs 5,000. If the voluntary deductible rises to around Rs 7,500, the premium will fall to Rs 18,480. Agents often resort to the practice of lowering the premium amount by raising the voluntary deductible. But allowing agents to do the same will make you shell out heavy amounts of compulsory and voluntary deductible in case loss happens.
Misrepresentation of claims
You are most likely to receive the discounted premium from the new car insurer if you do not reveal your claim history to it while shifting from the previous one. But, while you make a claim with the new insurer, the problem will start to rise make you worried. Your new insurer will call to the previous insurer to check the history of your claims. If any misrepresentation on your part is found, your existing insurer holds the rights to reject your claim when you file the same. These faulty ideas are often suggested by agents to policy holders, who suffer the most while agreeing to the same.
Removal of add-on cover cost
Sometimes agents lower the premium on car insurance by removing the add-on covers from the policy you might have bought. Firstly, the agent will provide a quote by factoring in the add-on cover cost. And if you start bargaining, the agent will take out the add-on cover cost to lower the quote. A third-party car insurance policy offers covers for both drivers and co-passengers in most cases. As these covers are not compulsory, often people discard the same to reduce the amount of premium. But bear in mind that add-on covers can be vital and thus you should not go overboard while reducing the premium on your car insurance.