Introduction
With easy car loans available, owning a car has never been easier. Yet, before you can drive your new car on the road, you have to have it insured. Car dealers offer insurance to buyers, making the entire process more convenient.
But is buying insurance from the car dealer the best option? In this blog, we'll explore the pros and cons of purchasing motor insurance through the car dealer.
For vehicles sold after September 1, 2018, bundled insurance plans became more prevalent. These plans offer a combination of mandatory third-party liability insurance and one year of own damage cover. This approach aimed to make motor insurance more affordable and transparent. However, understanding the specifics of bundled insurance is crucial.
Inclusions of Bundled Insurance:
A bundled car insurance plan includes:
1. Coverage for Own Damage: Protects your vehicle against damage due to accidents, natural calamities, theft, fire, and more.
2. Third-Party Liability Cover: Covers losses to third-party property or persons in case of an accident, including injury or damage to their property.
3. Personal Accident Cover: Provides compensation for medical costs and, in unfortunate cases, death of the driver due to an accident.
Also Read : Drive safely and lower your motor insurance premium
Exclusions of Bundled Insurance
Common exclusions in bundled car insurance plans include:
1. Damages that occur outside the geographical coverage of the insurance policy.
2. Any harm caused to the vehicle caused due to illegal driving or violations of driving limitations.
3. Damage while driving without a valid licence or under the influence of alcohol or drugs.
Advantages of buying insurance from a car dealer
1. Streamlined Process: Purchasing insurance from the car dealer simplifies the entire process, saving you time and effort. Instead of contacting many insurers to compare premiums, the dealer offers a one-stop solution.
2. Bundling Discounts: Dealers may provide bundling discounts when you buy both the car and insurance from them. Some dealers even waive the first-year premium, enhancing the deal's attractiveness.
3. Add-Ons and Extras: If you need add-ons or extra services, the dealer can offer them as part of the package. This can be convenient for buyers looking for comprehensive coverage.
4. Dedicated Support: Car dealers have dedicated helpdesks to assist with insurance queries and claims. This support can be valuable during times of need.
Disadvantages of buying insurance from a car dealer
1. Pre-Packaged Policies: Dealers offer a pre-packaged insurance policy with features that may not be necessary for every buyer. This can lead to higher-than-regular premiums. Car dealers also work on a commission basis, leading to higher premiums compared to alternative insurance providers. You may not save money by purchasing insurance through the dealer.
2. Limited Choices: Car dealers usually have tie-ups with specific insurance companies, limiting your options. You can only buy insurance from the companies only with whom the dealer is affiliated.
3. Lack of Comparison: Buying insurance through a dealer restricts your ability to compare policies and prices across different insurers. Comparing plans is an essential step in finding the right insurance policy.
(Also Read :Different types of car insurance policies and their benefits)
What you should do?
While buying a car and insurance from a dealer is convenient, it's essential to explore other insurers and buy options. Taking a few days to compare costs and coverage can help you make an informed decision that saves both time and money.
Buying insurance from a car dealer has its advantages, such as convenience and bundled discounts, but it also comes with limitations, including higher costs and limited choices. It's essential to weigh the pros and cons and explore alternative insurance options to make an informed decision that best suits your needs and budget.
Disclaimer: This article is for information purpose only. Purchase of insurance product by Bank’s customer is purely voluntary and not linked to availment of any other facility from the Bank. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
