Types of Cover
Generally, there are two types of car insurance coverage available in India:
Comprehensive Coverage
This insurance provides a better coverage to the third party and the insured. Third party liability cover is available under this and also any damage caused to the car in case of theft, accident, fire or a natural calamity is covered too. When opting for a comprehensive cover, the insured has the choice to opt for some add-on covers as well.
Third Party Liability Coverage
This compensates for any loss caused due to damage to any third-party property or life. Though not the best thing to do, this coverage is for those people who take insurance as it is mandatory under the Motor Vehicles Law. Under this cover, no loss to the insured or the car is payable.
Add-On Covers
Zero Depriciation Cover
Under this cover, no depreciation is calculated at the time of a claim. This helps in saving money which would have to be paid by the insured on repair of cars.
No Claim Bonus Protection
With this cover, the insured can enjoy the discount he can get a no claim bonus on his policy even if he has filed a claim.
Return To Invoice
With this cover in the case of total loss, the full insured declared value is given to the insured.
Roadside Assistance
This cover allows assistance in case of emergency causing the insured to be stranded. The cover provides various kinds of assistance like towing facility and taxi benefit in various situations.
Things to Consider When Comparing
When comparing insurance online one of the main factors to consider is the premium. But a policy with the lowest premium is not always the best as this might result in a less coverage. Some of the other factors which need to be looked at when buying car insurance are
Insured Declared Value
The IDV should be kept close to the market value of the car. Having a low IDV can lower the premium but will reduce the coverage. Thus, an optimum IDV is ideal.
No Claim Bonus
NCB means a discount on the premium. To avail the discount, a wrong NCB should not be given as this can lead to claim rejection.
Add-On Covers
With a standard car insurance policy there are many riders available. When comparing policies, the covers offered by each company along with the impact it has on premium must be compared.
Cashless Facility
The network of garages for each company where cashless facility can be availed should be another important criterion. A cashless claim settlement is easier in most cases than taking a reimbursement later.
Why Compare Car Insurance?
Comparing car insurance policies online from various companies is the best way to buy the right policy. The comparison is done on the basis of the insured declared value, add-on covers, discounts, deductibles and of course the premium besides some other parameters. The main advantages of comparing online are
Convenience
Many companies in the market offer car insurance but taking quotes from all is a difficult task. When comparing online, the insured can easily get all quotes sitting at home at the click of a mouse. When all quotes are available at one place, it makes it easier to compare and make the right choice.
Clarity
When all policies are available for comparison, the insured can know the right price and best coverage available. The exclusions and deductibles on a policy can also vary from one insurer to the other, and with all details available at a single place, taking a decision becomes simpler.
Fine Print
When comparing online, the insured has the access to a lot of information which helps him understand the fine print of the policy. A comprehensive understanding of the product comes in very handy at the time of a claim.
No Hidden Clauses
When comparing and buying the policy online, there is complete transparency. The insured has all details available and has access to reviews as well to make an informed choice.
Top 6 Car Insurance mistakes to avoid
Purchasing an insurance policy for your Car is mandatory as per Motor Vehicles Act. Most vehicle owners are aware and renew their car insurance on time. But still many make few common mistakes while choosing the right product which results in dissonance at the time of claim.
Here are the 6 common mistakes which you need to watch out:
It is very important that you claim insurance for an accident as and when it happens. Many times people tend to report occurrence of two different accidents as one accident and raise a single claim for both the accidents. The insurance company Licensed Surveyor will inspect the vehicle thoroughly and investigate the claim before approving it. For example, if you claim to have damaged the right hand side door due to a collision and at the same time also claim for left side back door and bumper, then the Surveyor will try to visualise the occurrence of accident and may not find the description appropriate and if he finds anything amiss he would reject your claim. So, refrain from giving any false information or claim any pre-existing damages as it may lead to denial of the entire claim altogether. It will also result in spoiling your record for falsifying insurance information and affect your future policies as the basic premise of any insurance policy is that it is based on the principle of utmost faith.
The insurance company will take into account several details regarding the vehicle to calculate the premium for your policy. The model of the car, safety ratings, fuel types, engine capacity, etc. all is taken into consideration before deciding the premium. The Third Party premium rates are fixed by IRDA based on the cubic capacity of the car. The Third Party premium rate is revised by the regulator each year as below 1000cc, above 1000cc but not exceeding 1500 cc, above 1500 cc but not exceeding 2500 cc and above 2500 cc. Many car variants come in multiple cubic capacities like 1398, 1498, 1598 or in small cars at 998cc and 1098 etc. As the Third Party premium for cars changes with the cubic capacity slabs it is important to provide correct details.
Add-on covers like zero depreciation, engine Protect (hydrostatic loss, consequential loss), return to invoice, consumables, no claim bonus, etc. though increase the premium amount but can be extremely beneficial in case of a major claim as it can provide adequate coverage at the time when it is needed. Hence it is always good to add such covers to your policy with an increased premium.
IDV stands for Insured Declared Value of the car in the insurance policy and is the maximum amount that the insurance company is liable to pay in case of theft or total damage to the vehicle. The premium for your car insurance is primarily dependent on the IDV of your car. Higher the IDV, higher is the insurance premium. It is a common practice to declare a lower IDV of the car in order to lower the premium. But in case of a theft or total loss, this small saving on premium can cost you dearly. Thus, it is always go for the optimum IDV. Also, once you lower the IDV in one year then the IDV of the car in subsequent year is also affected as it is dependent on the current year IDV.
Many people buy pre-owned cars from other owners. As the car is sold from one person to another, it results in change of ownership and hence it is extremely important to transfer the insurance policy too at the time of sale of car and not at the time of renewal. The insurance company can reject the claim on account of absence of a valid contract between the new owner and Insurance company.
Yes, if you do not make a car insurance claim in any policy year, you get a No Claim Discount (NCD). This discount reduces the subsequent year’s renewal premium. NCDs are cumulative in nature. They increase with every claim-free year. The applicable NCDs are as follows –
| After 1 claim-free year | 20% |
| After 2 claim-free years | 25% |
| After 3 claim-free years | 35% |
| After 4 claim-free years | 45% |
| After 5 or more claim-free years | 50% |
