Car Insurance Checklist for First Time Buyers

Car Insurance Checklist for First Time BuyersPolicybazaarAverage Rating / 5 ( reviews)
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Buying your first car is an amazing experience. Most of us tend to invest a lot of time in deciding and finalizing the model and specifications of the vehicle. When it comes to insuring the vehicle majority of us do not research and purchase and any insurance that comes in our way.

Owning a car comes with the responsibility of managing it and taking care of it. One of the most important components required to safeguard your car against unexpected is car insurance. Different providers offer customized tailored plans that are meant to protect your vehicle against potential damages.

Based on the UAE guidelines it is mandatory for car owners to have a valid car insurance plan with third party liability coverage. The type of car insurance you choose decides the premium that would be payable. There are multiple factors that are to be taken into consideration while buying car insurance in UAE. Typically with an increase in coverage, there is an increase in the premium of the plan.

Car insurance plans available in the market are mainly categorized into three categories i.e. third-party liability coverage, Vehicle damage coverage, and personal accidental coverage. Third-party liability coverage plans are meant to safeguard the car owner against liabilities arising from third party damages or injuries. Furthermore, it protects and covers expenses in case of legal prosecution. Vehicle damage coverage plans cover expenses incurred due to accidents and personal accidental coverage cover expenses incurred due to injuries.

Car insurance plans come in the form of different packages based on the requirement of the buyer. By compiling a list of things that are to be protected it becomes easy to determine the kind of insurance plan and riders that one should buy. If you are planning to buy car insurance stay tuned because in this article we’ll be sharing the list of important things to consider while buying car insurance in UAE to save time and money.

Personal Details

The first thing to include in the checklist for buying car insurance is your personal details. The documents submitted to the insurance provider must be latest and accurate in order to avoid any hassle. Major documents required in order to get car insurance include identity proof, driver’s license, and address proof.

Details of the Vehicle

The second thing car insurance buyers’ needs are the details of the vehicle. The insurance provider decides the premium of the car insurance plan based on the type and category of the vehicle. Premium sedans and SUVs are charged with higher premiums in comparison to mid-ranged hatchbacks. The main documents required include registration certificate, engine capacity, pollution control certificates, etc.

Insurer Declared Value (IDV)

Insurer declared value or IDV is defined as the maximum amount assured by the insurance provider that is payable in case of total loss or theft of the vehicle. In simple words, IDV is the current value of the vehicle in the automobile market. In case of a total loss, IDV is the amount that is paid by the provider in case of total loss or theft of the vehicle.

Very often insurance agents reduce the IDV in order to reduce the monthly premium. Car owners should ensure that the IDV is sufficient as it might lead to unwanted trouble later. The correct approach here would be looking for the insurance plan that offers the highest value of IDV at the lowest price.

IDV is typically calculated on the basis of age and the current market value of the vehicle in the UAE. The table below shows the percentage depreciation observed that affects the Insurer declared value or IDV or the vehicle.

Age of the Vehicle Percentage

Less than six months

5 percent

Between six months and one year

15 percent

Between one year and two year

20 percent

Between three year and four year

30 percent

Between four year and five year

40 percent

More than five year

50 percent

Claim Settlement Ratio (CSR)

Claim settlement Ratio or CSR is referred to as the total number of claims that are settled by an insurance provider against the total number of claims received. The claim settlement ratio depicts the efficiency and effectiveness of an insurance provider in processing the claims. While buying car insurance in UAE buyers should look for the provider that has the highest claim settlement ratio.

Additional Benefits (Riders)

Additional benefits that are known as add-ons or additional riders are additional coverage that is optional. Insurance buyers can opt for these riders by paying extra over the premium amount of the plan. The primary objective of availing riders is to protect your vehicle against situations that are not covered in the basic car insurance plan in the UAE.

Network of Garages

Car insurance providers have a network of authorized garages that offer quality services to policyholders. Before you go ahead and buy car insurance in UAE you should properly research and look for garages available in your city. Many providers offer cashless repair services to reduce the hassle from the customer’s end.

Deductibles

Deductibles are fixed part of out of the total claim amount that is to be declared while buying a car insurance plan in UAE. Car insurance buyers should focus on getting the plan that charges the lowest deductibles at the lowest monthly premium.

Conclusion

Insurance buyers while purchasing car insurance should lay emphasis on covering all aspects of accidents to be covered within the plan. The checklist shared in the article shows an insight into different situations and scenarios covered in your car insurance plan. Using this simplified checklist to choose a comprehensive plan that not only saves money but suites all your insurance needs.

Buyers should properly research the market and compare different insurance providers and plans before purchasing car insurance for your vehicle. Buyers should not only look for low rates of premium but should also lay emphasis on choosing a provider that offers good post-sales services along with a high claim settlement ratio.

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