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Having a car is good. Having a car insurance is even better. A car insurance will come in handy to cover up your costs if it gets damaged or stolen for some unthinkable reasons.
Car Insurance also called motor insurance covers the losses that you might incur in case your car gets damaged or stolen. A person has to pay the premium on an annual basis to get the car insurance. The premium is calculated on the Insured Declared Value (IDV). If the IDV of the vehicle is high then the premium amount will be high, if the IDV is less then the premium amount will accordingly go down.
As per the Motor Vehicle’s Act, 1988, It is mandatory for a motor vehicle operating in public space to be insured, to cover any damage to property or life. The insurance company bears the damage to property or injury towards a third party.
Car Insurance requires a very minimal documentation. To obtain a new policy, you only need to fill up the proposal form of the insurance company and a copy of your registration certificate (RC). For renewing the policy, you only need to provide a copy of your RC along with the copy of previous insurance details. Note: Carefully fill in all your details as it will help you a lot in taking claims.
Taking a car insurance comes with the following benefits: 1. It covers the losses against any damage or loss to the insured vehicle 2. It covers any loss or damage to your vehicle caused by accident, theft, fire, explosion, riots, strikes or any act of terrorism. 3. It covers the financial liability caused by injury/death of a third party or damage to the property. 4. Personal accident cover.
It is always necessary to compare the Vehicle Insurance as it can save a substantial amount of money and give you better coverage options. The following points should be considered before taking any policy:
1. Shortlist your coverage requirement: Before comparing the policies, you should ascertain as to what is your requirements and what coverage you need. A Liability coverage is cheaper than the comprehensive coverage but then the latter offers the best coverage. So if you are ready to compromise on some benefits then liability coverage is beneficial for you.
2. Compare the Coverage option: Once you have decided on which policy option is required, then you need to start comparing the coverage options. There are times when different insurance companies give various add-on in their policies.
3. Compare the Insured Declared Value (IDV): The different rate of IDV’s reflects the different rate of premium. IDV is the current value of the car after appropriate reduction. The rate of depreciation depends on the age of the car. The older the car, the higher would be the depreciation and thus lower IDV. Hence, it’s important to look carefully at IDV value quoted by different insurance agencies.
4. Comparison of Insurer’s Claim Settlement Practice: It is the most crucial part of an insurance policy. Every policyholder expects a hassle-free claim. All insurance companies have their own procedure. Hence, it is essential to compare the claim settlement process and records of the insurance companies.
There are 3 types of car insurance, namely:
The comprehensive coverage policy would provide personal accident cover to the owner-driver. If you want to include the personal accident cover, you will have to pay an extra premium.
The accidental cover is of great use as the compensation is in the following manner:
|Type of Injury||Compensation Percentage|
|Loss of one limb or loss of sight in one eye||50|
|Loss of both limbs or loss of sight in both eyes||100|
|Permanent disability due to other injuries||100|
Claim settlement ratio is defined as the percentage of total claims settled to that of the total claims received.
The following table lists the insurance companies which have a high settlement ratio.
|Insurance Company||Incurred Claim Ratio||Grievances settled (%)|
|HDFC Ergo General Insurance||89.43||100|
|IFFCO Tokio General Insurance||84.37||99.94|
|Future Generali India Insurance||81.77||99.86|
|Cholamandal MS General||79.82||99.82|
|Bharti Axa General Insurance||89.09||99.81|
|Bajaj Allianz General Insurance||69.19||99.28|
|Liberty General Insurance||77.29||99.06|
|ICICI Lombard General Insurance||78.91||97.61|
|Magma HDI General Insurance||78.49||84.96|
The following features are generally not covered in car insurance:
Investing in an insurance is useless if you don’t know how to make use of it when the situation arises. Follow these steps when you want to claim your insurance. All insurance companies would have set a time limit within which you’ve to make your claims. Insurances can be claimed for two cases
Listed below is the claim process in case of an accident for both cases.
The following documents will be necessary to file an insurance claim:
Purchase of used cars is becoming a norm in the country. It should be noted that the process of buying used cars not only involves selecting the right brand and model; it also includes a very important step – the transfer of car insurance to the new car owner.
When you purchase a used car, the first step would be the transfer of the registration certificate (RC). Ideally, the car insurance should also be transferred at the time of transfer of the RC. The car owner should raise a request with his/her insurance company for the insurance transfer. Once the new owner has bought the car, the policy of the previous owner will not be valid.
As per IRDAI guidelines, the name and address of the insurance documents of a car and the RC should match. So, in the event of an emergency, the new car owner can recover the incurred expenses without too many hassles. However, the NCB is assigned to the driver and it is not tagged to the car. So, when the sale of the car happens, the NCB on the insurance remains with the previous owner. This NCB can be added to the insurance of a new car later on. The NCB can be retained by obtaining an NCB retention letter issued by your insurance company. The NCB can be retained for a maximum of 3 years, after which it becomes void.
Documents required for NCB retention
IDV is the maximum amount the insurer can pay to you in case your vehicle is damaged or stolen. It is calculated as:
[Manufacturer’s listing price – Depriciation] + [Accesories not included in listed price – Depriciation]
o-claim bonus (NCB) is the claim you make in case if you had not made any insurance claims during the insurance period.
An anti-theft device is a device which will help you against the theft of your vehicles. Popular anti-theft devices are tire locks, steering wheel locks and kill switches. When you mention this to your insurance company, they reduce your premium as they believe that you are a more responsible driver.
Yes. Service taxes are applicable to your premium payments and they are according to guidelines set by the IRDA.
Commonly offered as an Add-On, the Zero Depreciation Cover offers a full settlement on your claim without the usual deduction affected for depreciation. A deduction due to depreciation is a common factor in the normal car insurance.
If your car is insured under this policy, then you can get your car repaired at any of the garages registered in the insurance company’s network. The settlement of all costs will be taken care by the insurance company. You may have to pay some amount because of the depreciation factor.
Getting a duplicate copy of the insurance policy is very easy nowadays. You can approach the insurance company for the same. If you had bought your insurance policy online, then you can just download your insurance policy from mail which your insurance company had sent to you.
Car insurance premium rates differ from one company to another based on their own internal arrangements. The company calculates your premium based on these factors-
It is necessary to update your change of address at RTO as well as inform your motor insurer. You can get in touch with your insurance provider via their toll-free number, email or in person. You can do this online as well. Just go to the official website and enter the details in the required columns.
Car insurance costs rise every year depending on the company costs in policy distribution, loss of investment, fuel prices, etc. Your insurance premium can go up depending on the age and value of your car, your driving history, and the claims made.
For old cars, i.e., the ones that were bought on or before 31 March 2010, the Pollution Under Control (PUC) Certificate should be renewed on a quarterly basis. The validity of the PUC Certificate for new cars is 1 year. Vehicles that were bought on or after 1 April 2010 are considered to be new cars under this classification.
You can make multiple claims per year, but the insurance company can put a limit on the add-on claims ( NCB protect, zero depreciation, etc ).
Coverage under any motor insurance policy:
Exclusion Under motor insurance policy:
Response Time for Insurance Companies
|Issuing, processing and Cancelling of policies||15 days|
|Issuing proposal copy||30 days|
|Refund of deposits & No-claim requests||10 days|
|Submission of reports||30 days|
|Claims settlement/rejection||30 days|
|Acknowledgement of a grievance||3 days|
|Resolution of a grievance||15 days|