Insurance is like a spare tyre. You may not require it, but not having one is not an option.

Why Cheap Car Insurance Is Not A Good Idea

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When making a significant purchase like a car insurance policy, you should muffle your innate bargain-seeker instincts and look beyond procuring the cheapest deal. Agreed that “cheap” does not always mean “low-quality”, but as far as insurance is concerned, a low-priced plan can offer much less coverage and expose you to a myriad of risks.

Here, we take a look at the various reasons why you should not settle for a cheap car insurance policy.

Cheap Versus Affordable Car Insurance:

In the realm of auto insurance, the cost is always indicative of the extent of coverage or service that you are liable to receive from the insurer. You have to understand that there is a wide difference between cheap and affordable car insurance. “Cheap” car insurance may actually offer you less coverage, while you can receive adequate cover by selecting an “affordable” insurance plan. So, it is advisable to compare rates of insurance policies and weigh these out against the coverage offered under each plan. This facility is available at neutral financial websites and should be used before buying car insurance.

Drawbacks Of Selecting The Cheapest Car Insurance:

The appeal of a low price tag is irreplaceable, but that should not deter you from finding the most suitable plan. If you do a little research you can find a policy that offers extensive coverage in a cost-effective manner. Some of the drawbacks of picking the plan with the lowest price tag are described below:

  • Insufficient coverage - Some of the cheapest car insurance plans offer only third-party liability insurance coverage. This means that if you ever get involved in an accident, your insurance company will only pay for the damages suffered by the third party. You and your vehicle will not be protected under this cover. You will have to foot the bill for the repairs that your car may undergo following the accident.
  • High deductibles - Some insurers offer comprehensive auto insurance plans at a low cost with the clause of high deductibles hidden in the policy wordings. Voluntary deductible is an amount that the policyholder will be expected to pay at the time of a car insurance claim. Opting for high deductibles will reduce your annual premium to a large extent. However, at the unsettling time of an accident, you will have to pay a part of the expenses. So be prepared for the same.
  • Poor customer service - The insurer offering the cheapest policy may not have the best customer service. The claims support facility may not be efficient as well. So, you should read reviews from existing customers and find out about the company’s claims handling procedures and customer service.

How To Select The Best Car Insurance Policy:

Here are some ways to ensure that you get the best coverage under your car insurance at an affordable cost:

  • Compare insurance - Compare car insurance between providers. As indicated above, this is a crucial step in the process of identifying the best insurance plan.
  • Add-on covers - Review add-on covers offered by the insurance company. Select an insurance provider that is able to offer you a wide range of useful add-on covers. This way, you can choose additional coverage suited for your specific insurance needs. For instance, the engine protect add-on cover is highly beneficial for car owners who live in areas prone to waterlogging. The engine of a car is not usually protected under a comprehensive car insurance policy. So, this add-on cover is very useful for this purpose.
  • Price negotiation - Negotiate with the car insurance company on a reasonable price.
  • Preserve NCB - If you are looking for renewal of your policy, use the NCB that you earned on the previous policy. This will give you a significant discount on premium.
  • Claim settlement history - Check out the claim settlement ratio (CSR) of the insurance provider. A ratio above 85% indicates that the insurer has a good history of settling claims.
  • Cashless garages - Ensure that the car insurance company has a wide network of cashless garages. This ensures that you can avail hassle-free claim settlement without having to pay for the damage repairs upfront.
  • Cost-to-feature ratio - As indicated above, it is best to evaluate the features offered under the plan and weigh it out against the cost. Pay close attention to exclusions under the plan so as to have a clear picture of the type of claims that the insurer does not honour.
  • Online policies - It is recommended that you buy car insurance online. This way, you can get discounts on premium without any compromise on the extent of coverage. Car insurance companies have significant savings when they sell insurance online. This is because there is no involvement of middlemen, resulting in savings on processing and distribution costs. The insurer, in turn, passes on a part of these savings to the customer in the form of premium discounts on online policies.
  • Other discounts - Car insurance companies offer various other discounts to customers. For example, if a vehicle is installed with approved anti-theft devices, the customer can get insurance at a lower cost. Another type of discount offered by car insurance companies is the automobile association membership discount. Car insurance providers also offer discounts based on the profession of the policyholder and loyalty discounts. Check with the insurance company if you are eligible for any of these benefits to save on premium.

In conclusion, although a minimum level of car insurance is mandated by the law, it is better to stay safe with comprehensive car insurance. So, rather than focusing on “cheap”, look to buy the most “cost-effective” plan. After all, a car is one of the most expensive purchases you will make in life. Protect it with the maximum insurance cover you can afford so that it serves you well for years to come.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

Car Insurance Reviews

Page 1 of 50 1 2 3 4 5
  • Bajaj Allianz Car Insurance
    "Good to Go with Bajaj"
    0.5 4.0/5 "Great!"
    The conditions and the insured which they are providing is good, I have insured Ford Car with Bajaj Allianz, the premium amount is reasonable but they can reduce it. Its 1.5 year old year but still the insurer providing 24 hours service, cash less garages and they have tie up with many centers, the response is great.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 17, 2019
  • ICICI Lombard Car Insurance
    "Premium should be standard as per market"
    0.5 4.0/5 "Great!"
    I never used the policy if something happen I claim it, I didn't interact with the customer care but I get the reminder message for car renewal. I have insured my maruthi Suzuki riz with ICICI Lombard, The premium is higher but still they are good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 14, 2019
  • HDFC Ergo Car Insurance
    "Very good"
    0.5 5.0/5 "Blown Away!"
    Even my car was insured with HDFC Ergo. It is a second-end car and have chosen the third party insurance. I have not done any claim so far. The premium is reasonable. It offers bumper to bumper facility and road side assistance. The policy period is 2 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 14, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 1
    , tirupur
    Reviewed on Jan 10, 2019
  • Tata AIG Car Insurance
    "Good Insurer"
    0.5 5.0/5 "Blown Away!"
    My financier suggested the Tata Aig general insurance, the premium is economical for the car policy. I have honda amaze car it got insured with them. The insurance company is providing 24 hours service, cash less garages, brake down service for the tenure of four years. On time I got the papers from the Tata Aig.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 10, 2019
  • National Insurance Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this Insurance policy for my Maruti Car and i had been paying the premium on an annual basis. The premium amount has not been too high and there has been cash less garages available with this insurance policy. Their customer support has also been helpful at times.
    Was this review helpful? 1
    , pune
    Reviewed on Jan 09, 2019
  • ICICI Lombard Car Insurance
    "Nice Policy"
    0.5 4.0/5 "Great!"
    My car was insured with ICICI Lombard. Last year i have purchased this insurance policy. My wife has referred me about this policy. I pay the premium amount of Rs. 13500. They have given me a convenient IDV value. I had no claim experience so far.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Need to improve the service"
    0.5 3.0/5 "Satisfactory"
    I'm not satisfied with the service provided by new India. I have bought the car insurance policy. They closed their branch on every weekends hence its difficult to renew the policy. I have been paying the premium amount of Rs. 14000 which is a competitive price. They have given the IDV value of Rs. 1.50 lakhs.
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • New India Car Insurance
    "Average Car Insurance"
    0.5 3.0/5 "Satisfactory"
    My car insured with the New India Insurance company. I have been renewing the policy with the same company for 3 years. I have paid the premium amount of Rs. 7000 and they have offered me a satisfied coverage value. The documentation process was fine
    Was this review helpful? 0
    , mangalore
    Reviewed on Jan 09, 2019
  • review Car Insurance
    "Its Good"
    0.5 3.5/5 "Pretty good"
    Last year I had car policy with Bharthi axa whenever I try to renew it ask my poliy no, whenever I mention the same, it shows the its incorrect. If I try to reach the customer care its not reachable. I done the claim, some minor damage back side of the car, they have processing fee 1500. Remaining all taken care by the insurer.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Great Policy"
    0.5 4.0/5 "Great!"
    ICICI Lombard has a good brand value hence i have selected the car insurance policy with this card and the dealer has also recommended about this policy. I pay the premium amount of Rs. 9000 and this is a 100% coverage with bumper to bumper facility. I'm not sure about the IDV value. Its easy to renew the policy.
    Was this review helpful? 2
    , new delhi
    Reviewed on Jan 08, 2019
  • ICICI Lombard Car Insurance
    "Good"
    0.5 5.0/5 "Blown Away!"
    Previously my car was insured was with ICICI Lombard and it was offered by the showroom. I got a call from the representative for the policy renewal as reminder. I got the insurance paper. I have not done done a claim. It is a comprehensive with zero dep. The premium was high so changed my insurer.
    Was this review helpful? 1
    , mumbai
    Reviewed on Jan 08, 2019
  • Future Generali Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    I have taken a car insurance from Future Generali through online portal. The premium was reasonable and also they have provide bumper to bumper facility. The policy period is one year. There is no interaction between the customer service. I just gave my car for the claim so no experience.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 08, 2019
  • Oriental Insurance Car Insurance
    "Good insurance company"
    0.5 2.0/5 "Expected more"
    Dealer has referred me about this oriental car insurance when i purchase the vehicle. They have rejected the claim since the copy of FIT is not available. They have given me a coverage value upto Rs. 6 lakhs. For the past 3 years i have been renewed the policy with the same company.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Iffco Tokio Car Insurance
    "Good Policy and you can try"
    0.5 4.0/5 "Great!"
    Two months before, i have taken my car insurance policy with Iffco Tokio. Its a PAN India agreement policy for my Maruti Car. I don't remember about the coverage value. This is a zero depreciation policy. I paid the premium amount of Rs. 6500. I have not seen any add on and cashless garage facility.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Its Excellent"
    0.5 4.0/5 "Great!"
    My brother is working with Reliance hence I took my two wheeler policy from this insurance company. I have hyundai accent car, they are providing cash less garages for the damage. I have zero depreciation bumper to bumper policy for the term of one year.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 07, 2019
  • Reliance General Car Insurance
    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance policy was taken with reliance. The dealer has provided me a policy with this policy. This is a 100% coverage value which covers the bumper to bumper facility, They have given me a IDV value of Rs. 11 lakhs. I pay the premium amount of RS. 33000.
    Was this review helpful? 0
    , thane
    Reviewed on Jan 04, 2019
  • HDFC Ergo Car Insurance
    "Good service provider"
    0.5 4.5/5 "Excellent!"
    The reason to avail HDFC Ergo policy, my banker have suggest this insurer for my car. They gave me the best insured value around Rs. 6 lakhs based on the vehicle age. I have Hyundai I20 car, they are providing 24/7 helpline and cashless service.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 04, 2019
  • ICICI Lombard Car Insurance
    "Good Policy to take"
    0.5 3.0/5 "Satisfactory"
    My car was insured with ICICI Lombard. I pay the premium amount of Rs. 22000 and i have been renewing the policy continuously for 2 years. They have provided me a no claim bonus. Its covered with bumper to bumper facility. My dealer has recommended me about this policy when i purchase a car.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 03, 2019
  • Iffco Tokio Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    I have a car insurance with IFFCO TOKYO from last 1 year, there was no claim experience so far with this insurance policy. I pay a premium of Rs 5500 for this car insurance. This is a first party insurance with 0% depreciation and the coverage value is good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 03, 2019
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