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Car Insurance Buying Tips: It is not mandatory to purchase insurance for a new vehicle directly from the showroom. Dealers often sell you expensive policies solely to earn a commission. By making the right choice, you can save thousands of rupees.

Car Insurance Buying Tips: When purchasing a new car or bike, we often spend hours selecting the perfect model and color; yet, when it comes to insurance, we blindly trust whatever the showroom representative tells us. Often, under the guise of the “on-road price,” we are handed a policy that primarily serves the dealer’s financial interests.

Is It Mandatory to Buy Insurance from the Dealer?

Absolutely not. While having vehicle insurance is a legal requirement, purchasing it specifically from the dealer is not mandatory. Dealers often try to intimidate customers by claiming that buying insurance from an external provider will lead to difficulties in processing claims or will void the vehicle’s warranty—claims that are entirely false. The truth is that dealers earn a substantial commission on every policy they sell, which is why they aggressively push their own insurance plans.

What Is the Catch Behind Low Insurance Premiums?

Often, a dealer’s insurance policy may appear inexpensive at first glance; however, to achieve this lower price point, they typically reduce the vehicle’s IDV (Insured Declared Value)—essentially lowering the declared market value of your car. Consequently, if your vehicle is stolen or suffers total damage, the compensation you receive will be significantly lower than its actual market value. Furthermore, to keep premiums low, they often strip away essential “add-ons”—such as engine protection or consumables cover—leaving you to bear the financial burden out of your own pocket when the time comes to file a claim.

Have You Forgotten About Your Previous Bonus (NCB)?

Dealerships often conveniently fail to mention the “No Claim Bonus” (NCB). If you did not file any insurance claims on your previous vehicle, you are entitled to transfer that accumulated bonus to the insurance policy for your new vehicle. This transfer can result in a substantial discount on your new premium, ranging anywhere from 20% to 50%. It is important to remember that this bonus belongs to the driver (the policyholder), not to the vehicle itself.

How to Become a Savvy Buyer?

Before taking delivery of your vehicle, be sure to set aside 10 minutes to compare insurance policies online. You could find a policy offering equivalent coverage for ₹10,000 to ₹15,000 less if you look elsewhere. When purchasing a policy, do not focus solely on the price; instead, check the Insured Declared Value (IDV) and verify whether essential benefits—such as Zero Depreciation or Engine Cover—are included.