Car insurance offers financial protection against loss/damage to the vehicle that is caused by accident, theft, fire, explosion, natural calamities, etc. It also takes care of the financial liabilities that occur due to the damage caused by the insured to the third-party individual/property.
In India, around 54 road accidents take place every hour. What will you do if the repair cost is high and you are not able to get it done on time? Who will be responsible for the damages? This is where an effective car insurance policy will do its job. The policyholder can ask their insurer for assistance and get the repairs done on time. In the case of third-party liability, the insurance provider will deal with its aftermath without giving you any trouble.
The Indian government also stresses its importance via The Motor Vehicles Act, 1988. This act makes it mandatory to have at least third-party car insurance to enjoy a legal drive on the Indian roads. Anyone who dares to go against it has to face serious consequences.’
It only covers the damages caused to the third-party individual/property. No coverage is provided to the policyholder.
The third-party liability insurance quote is the mixture of a few components which comprises of: -
It is also called the ‘Big Brother’ of third-party liability plans. Why? Apart from covering the third-party damages, comprehensive plans look after the policyholder’s damages as well.
The quote for the comprehensive cover is the sum of its components which include: -
Apart from own & third-party damage cover, car insurance offers other benefits as well. They are listed below for your reference.
It is a discount which is offered to the policyholder for applying zero claims over the previous years. The discount can range between 5-50% at the time of renewal.
Apart from the basic cover, there are several additional covers that you can opt for wider coverage but they vary from insurer to insurer. A brief explanation of them is given in the latter part of the write-up.
You can get the repairs done in one of the network garages which is associated with your insurance provider. Its benefit? You don’t have to pay a single penny. The bill will be settled by your insurance provider.
The car insurance premium is the amount that you have to pay to keep your policy active. It usually varies from insurer to insurer & model to model. To calculate car insurance premium, you can use the below-stated formula.
Premium= Own Damage Premium – (No claim bonus + discounts) + Liability Premium as Fixed by the IRDA + Cost of Add-ons.
On the basis of the below-mentioned points, the company determines the car insurance premium.
This determines the age of the car. Older vehicles have low insurance rates in contrast to automobiles which might be especially new.
Your residential place and the vicinity in which you got your vehicle registered also has an impact on car insurance premium.
If the vehicle has steeply-priced or uncommon spare parts, the coverage for the top class of the car might be higher as well.
Car Insurance providers offer personal and business coverage rules. If a vehicle is used for business functions, it will attract higher coverage rates.
Today, most of the vehicles are geared up with safety capabilities and anti-theft devices. You're eligible to get a discount on the premium of up to 2.5% (if your vehicle is secure). Also, the devices must be approved by the Automobile Research Association of India.
If you raise a claim against your vehicle insurance, the premium is likely to head up. If you abstain from raising claims, you may be rewarded with a No-claim Bonus (NCB).
The insurance provider will offer financial compensation to you if your bodily injuries (in an accident) leads to partial/total disability or death.
If you opt for this, you will get the necessary assistance if your vehicle is a victim of tire puncher, battery problems, etc.
If you lose your car key, this feature will cover the expenses of the new lock.
Under Zero Depreciation Cover, the insurance company will offer the original cost of the vehicle's part instead of the depreciated value.
If your vehicle is damaged beyond repair (in an accident) or stolen, this add-on will compensate for the gap between the invoice value of your car and its insured declared value.
If an expensive/precious item is stolen from your vehicle, this add-on will compensate you for it (partly/fully).
Yes, you need an endorsement form along with the necessary documents (old RC copy, NCB recovery amount, etc) to transfer the existing policy to the buyer of the vehicle.
Yes., It is highly important to inform the Road Transport Authority (RTA) where the vehicle is registered and your Insurance Company. The RTA will make changes in the Registration Certificate (RC) accordingly, and the Insurance Company will inform you about the additional premium that you have to pay for the same.
You have to wait for a spot survey done by the insurance company. Only after that can you move your vehicle.
According to IRDA, you will get a 15% discount on the insurance premium.
Yes. The additional expense needs to be paid by you.
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