Purchasing a dream car is itself a complex decision making process. One needs to look at features, price, service support, brand value, looks and what not, for taking the final leap of faith! One cannot even forget the associated taxes when you make a choice among so many confusing parameters. So many decision points are involved while buying a car.

However that is just the beginning of paper work. Immediately the focus on getting the registration certificate and additional paperwork needs to be completed. Further every vehicle owner in India needs to choose a car insurance once the vehicle is purchased. A car owner needs to ensure that he or she is compliant with all the rules and regulation for owning a car.

Getting a 4 wheeler insurance is again a difficult problem in the consumer’s decision making journey. There are so many different options and premiums for the insurance options. There are also a few marketplace platforms which help a consumer to compare between different options based on their needs.

One of the decision making point is the type of car insurance that is needed. There are two dominant categories: Third Party Liability Insurance and Comprehensive insurance. Third party liability insurance plans covers accidental death, damage to property and injury to a third person who is not in the car. This plan is also a mandatory requirement for all cars travelling on Indian roads. In comparison, the Comprehensive Plans for car insurance cover for both ‘personal damage’ and legal liability of third person. It also provides cover for theft or damage caused by unforeseen natural calamities.

Subsequent to this, another aspect which builds up car insurance premiums is the risk associated for the same. Typically risks underwritten by insurance companies fall under vehicle related risks, location related risks, claims history related risks and driver related risks. For vehicle related risks, vehicles like SUV and commercial vehicles often need higher premium to be payable to insurance providers as insurance firms typically get large number of claims on such vehicles. Generally diesel vehicles have a 10-15 per cent higher premium than petrol cars as it is assumed diesel cars need to be driven for longer distances as compared to petrol cars. For location related risks, typically premiums are higher if you live in posh urban area, near highways or near densely populated area. It is assumed such areas would have vehicles more prone to small or major accidents more frequently. If theft is high in the area where the car is registered, then also the premiums go up. Claims history and driver related are basically derived based on who would be driving the car and how many drivers would do so regularly. The history of the individual drives the premium payable in both cases.

One of the better insurers in India in the space of motor vehicle insurance that provides different options at a very competitive price for your car is Bharti AXA. One great quality that sets apart their service is their customer orientation and after sales service.  Besides car insurance they are well known for their portfolio in two wheeler insurance, travel insurance, health insurance, critical illness insurance and personal accident insurance. It is a joint venture between Bharti Enterprises and AXA business Group that operates in India. It is headquartered in Bangalore and operates at over 80 locations across India.

By Kar

Dr. Kar works in the interface of digital transformation and data science. Professionally a professor in one of the top B-Schools of Asia and an alumni of XLRI, he has extensive experience in teaching, training, consultancy and research in reputed institutes. He is a regular contributor of Business Fundas and a frequent author in research platforms. He is widely cited as a researcher. Note: The articles authored in this blog are his personal views and does not reflect that of his affiliations.

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