A Motor Insurance Policy is a contract between the insurance company and insured that safeguards the policyholder against financial loss in case of Fire, theft or accident. Car Insurance offers coverage for property like theft or damage of your car liability, legal accountability to others for property damage, death, bodily injury, the expenses for injury treatment etc.
As per the Motor Vehicle Act, it is mandatory for vehicle owners to buy car insurance for their vehicles plying on Indian roads. Car Insurance or motor insurance covers for losses that you might incur if your car gets damaged or stolen.
The premium amount of your car insurance is decided on the basis of Insured Declared Value or IDV of the vehicle. If you increase the IDV, the premium rises and if you lower it, the premium reduces but it is subjected to IDV schedule and respective Insurance company. It is important for any policyholder to compare various car insurance options before going for a car insurance renewal or buying a new policy.
Key Benefits Of Car Insurance
Types Of Car Insurance :
Third Party Liability Coverage
This compensates the damages to a third party and their property. It’s best for those planning to insure their car just because it’s mandatory (but we wouldn’t recommend that!).
Third-party liability car insurance safeguards you from any legal liability due to your own car’s involvement in an accident. Your insurance provider will compensate you for death, disability, injury, or property damage to any third-party. Therefore, you are protected from the financial liability towards the third-party.
Third-party Liability Car Insurance is a mandate in India under the Motor Vehicles Act, 1988.
This covers damages to the third party, as well as your own car. It is best for those wanting to cover for losses for accidents and incidents such as theft and natural disasters.
A comprehensive car insurance policy provides coverage for third party liability as well as damages caused to your own car. In comparison with third party liability car insurance, a comprehensive car insurance policy offers extensive coverage, more benefits and covers the damages caused to the insured car in case of an accident, collision, theft, etc.
A comprehensive policy can be further extended by opting for addon covers like accessories cover, engine protector, zero depreciation cover, etc. This type of coverage is the most popular as it offers end-to-end coverage and thus less stress for the policyholder.
Additional Covers In Car Insurance :
This additional feature offers compensation even for the depreciating value of your car. With this feature, you will not have to pay for the depreciation value of your vehicle’s parts. It is mostly valid on private cars and is subjected to a specic number of claims during the policy period. Compulsory and voluntary deductibles (as per the case) will be applicable despite zero depreciation cover. You can check with the insurance company for any terms and conditions before making the purchase.
Sometimes, a bunch of unforeseen expenses can drain all your savings. Consumables Cover. Includes all the expenses incurred on consumable items for any perils that are covered under the policy. Consumable items include screws, nuts and bolts, washers, AC gas, grease, lubricants, bearings, clips, engine oil, distilled water, oil filter, brake oil, and fuel filter are mostly covered.
There are certain terms and conditions that are applicable to this add-on cover that varies from one insurance provider to another. It is mostly valid on private cars and is subjected to a particular number of claims during the policy period. You can check with the insurance company before making the purchase.
Engine Protection Cover
An engine is one of the most important part of a car and engfine protection cover compensates the cost of fixing the indirect damage that are caused to the engine due to lubricating oil leakage and water ingression. It covers the Gear Box Parts, Engine Parts, and Differential Parts.
No Claim Bonus Protection Cover
For every claim free year, the insured is rewarded with a discount on the renewal premium. This discount is called – No Claim Bonus (NCB). It is cumulative and increases every year. It usually ranges from 20% to 50% and can save a substantial amount of money on the premium payable for your auto insurance.
Let’s take an example if a policyholder doesn’t make a claim during the tenure of his auto insurance policy, he becomes eligible for No Claim Bonus, on the basis of which, a certain rebate is offered on the payable premium. With No-claim-bonus protection cover you can retain your NCB even after registering a claim during the policy term. The terms and conditions vary from one insurer to another.
No Claim Bonus (NCB) in Motor Insurance :
(In this case, a suitable letter from the employer is compulsory)
(The rate of NCB applicable to the fresh policy is as per the earned percentage under expiry policy)
Key Protection Cover: Once in a lifetime everyone would have lost or misplaced their car keys. In such cases, the insurer can offer you the financial help by covering the costs incurred on replacement and repair of your car keys.
Personal Accident Rider Benefit : Personal Accident Rider is an optional add-on benefit that can be added to the comprehensive auto insurance by paying an extra premium. This rider provides the policyholder with the coverage of medical expenses due to damage, personal injury or disability caused due to an accident.
Roadside Assistance Service
Mechanical/electrical breakdown – If the vehicle has broken down at home or on the road, the insurer will arrange for a mechanic to repair it at the site of the breakdown. The mechanic will assist the car owner with battery jump start, replacement of flat tyre, and other minor electrical or mechanical repairs. In case the car owner has been locked out of the vehicle, pickup and delivery of spare keys will also be provided.
Towing – If the insured vehicle is involved in an accident, the insurance company will arrange for it to be towed to a nearby network garage or authorised service centre safely.
Flat Battery – Making an alternate arrangement so that your car starts moving.If the battery needs to be changed, the car insurance company will take care of the repair costs, although you need to pay for the new battery
Spare Key – Arranging for pickup and delivery of spare keys or providing unlocking services by a vehicle technician, is provided by the car insurance company
Flat Tyre – Getting a technician to repair/replace the tyre, or arranging to take the tyre to the nearest repair facility. If the tyre needs to be changed, you will have to pay for it although the repair costs will be borne by the car insurance company
Fuel Assistance – Arranging for the supply of up to 5 litres of fuel (the fuel is chargeable) if your car has run out of fuel, or arranging for towing to the nearest garage in case of immobilization due to contaminated fuel.
Also, Taxi and Accommodation benefits are provided if you are too far from the city so that you and your family are safe in the first place.
Exclusions: What Is Not Covered In A Car Insurance Policy?
Documentation Required For Car Insurance
Getting a car insured requires minimal documentation. For a new policy, you must submit the filled-up proposal form and copy of the Registration Certificate (RC). For renewals, you will need a copy of the RC (Registration Certificate) along with the copy of the previous insurance policy. Carefully fill in your complete details. This is an important step and will save you a lot of hassle during claim time.
Car Insurance Claim Process
Car Insurance Claim Process For A Third-Party Claim
Car Insurance Claim Process For A Stolen Car
It is very important to be well informed about the formalities related to making a car insurance claim. Whether you need to make a small claim due to a minor accident or a major claim due to the theft of your car, knowing the procedures will make the job a lot simpler for you.
All insurance providers these days have a very good customer support network and so you must communicate with your insurer whenever there is a need. If you have any doubts regarding the claims, get them sorted beforehand so that your car insurance claim process goes smoothly at the time of a need.
Keep the points mentioned above in mind and your job of filing and receiving a car insurance claim will become a lot simpler.