India does not have a lot of good information on the Internet about various common things and it is frustrating and time consuming to go about in choosing the right option.I tried to buy insurance on my 3 year old car and there was not a lot of good blogs/websites which would indicate how to go about buying the cheapest car insurance out there.Most of the websites and insurance comparison websites that have come up are in general biased and promote companies in order to generate commissions.So I decided on doing investigation on my own and finally managed to get extremely cheap car insurance which even surprised me.So even though this blog does not deal with personal finance issues much,I though I would write my experience so that others could benefit without without wasting time and money.
Also read about the different Car Insurance Products in India
Private Service Companies in India all indulge in quick buck at the expense of small consumers
India’s Insurance Industry is still an immature one with penetration quite low like with other financial inclusion parameters.The service levels of the industry are pathetic and the trustworthiness of the private companies is pretty much zero.Note this goes to most of the service oriented private companies in India.All of them try to make a quick buck through information asymmetry and the poor state of Indian Justice.I have been cheated by almost all companies like Telecom,Cable,Logistics etc. and I think almost all Indian consumers have been as well.Its not worth the effort and money to go after these big corporate entities for contract infringements.
Steps in Buying the Cheapest Car Insurance
1) Try to avoid Private Companies as they make a lot of promises and advantages but disappear once the time to pay comes up.Insurance being such a critical service I did not want a private company irrespective of their glitzy new features etc.
2) Forget the Fancy Features that are being offered to raise the premium like zero depreciation,towing,24/7 helplines etc.Most of them are just ways to raise premiums and lure customers.Try and get the bare bone policy with the lowest premium
3) Compare Quotes from different Insurance Aggregators without buying from them – I used 3 Insurance Comparison Websites www.policybazaar.com, www.insurancepandit.com and www.apnainsurance.com. This gave me a general idea about the prices being charged by various insurance companies.I could quickly shortlist Iffco-Tokio as one of the cheapest insurance providers with government general insurance companies oriental insurance,national insurance being slightly expensive than these.I could not find anything great or cheap about Icici Lombard,Bajaj Allianz and tata Aig which use a heavy amount of TV advertising and had a good recall.
4) Private Companies make Consumer Lives Such a Pain that they would wish they never had bought a Car – Note applying and managing to pass a claim from a private insurance company is such a pain in the ass that you would wish that you had not ever bought a car.You can read about the customer travails with companies like tata-aig,icici-lombard and others in www.mouthshut.com .The measly amount of claim that they give you after a harrowing experience is not worth the pain of applying.I think that is the general strategy for these companies.Make the customer go to such pains that he does not claim any insurance.
5) Shortlisting the Insurance Company and Policy- After finding all these things out,I decided to buy a policy that I would never have to use unless in an extreme case like it getting stolen,destroyed or burnt.So I picked the cheapest company (Iffco Tokio) which had a quasi government connection as well.I went to its website www.iffcotokio.co.in and did not use the consumer aggregator,got the cheapest option (by making the highest possible deductible and leaving every frill).You can play around with different options to see the premium.This made my insurance premium approximately half of what it was earlier.I could have bought only 3rd party coverage ( which is mandatory by Indian law) which would have made it even cheaper but I decided to use the complete coverage so that I could use the policy in case of extreme cases.
Claiming Insurance in India from Private Insurance companies is a Harrowing Experience most of the times.The customer care employees are rude beyond measure while the marketing guys are like angels.While Insurance Companies are showing spectacular growth on the back of customers but their long term growth is a question.Government companies are the best bet as you can easily check from the success of insurance claims figures given by the Insurance Regulator (IRDA).If you decide on a private company,then try to pick up the cheapest policy possible which you do intent to use unless in a case of an extreme event.
According to figures released by IRDA, LIC has settled 95.48% of death claims for the year ending March 2009 as against the claims of 82.26% for the private companies. Also the percentage of claims repudiated stands as high as 9.97% in case of private insurance companies as compared to which the percentage of death claims repudiated stands at 1.33% for LIC. Despite the private companies trying to cope with the state-run major, they still lag behind LIC.
Among the private insurance companies,? Bharti Axa Life Insurance with 44.83% of claims repudiated stands at the highest leaving Aegon Religare which has 71.43% of claims pending. A senior official from Aegon said that, “The company is still in the starting stage. And thus it is difficult to compare it with other insurance companies which have long been in this business.”