Car insurance is essentially a safety measure that car owners need, to ensure the safety of their cars as well as their own selves. The gravity and the necessity of the insurance has prompted the Government to make the third party (TP) liability part of the insurance mandatory for anyone who owns a car in this country. So, if you want to avoid any kind of penalty/legal troubles/losses pertaining to the usage of your car, buying a policy will definitely become your priority.
As for present times, most people tend to buy auto insurance policies only because of the Government’s mandate. As a result, people automatically opt for plans which are easy on their pockets and end up choosing the cheapest of the insurance plans available. However, this only results in the car owners having to pay hefty sums from their own pockets in case of any damage or mishap that happens to their cars. The cheap insurance plans are often inadequate and do not serve the purpose of having an auto insurance at all.
It therefore becomes very important that you spend money on the right insurance plan for your car, which usually is a comprehensive motor insurance policy. You have to remember that before buying a car insurance, you have to do a comparative analysis of the several plans available in the market and also understand the terms and conditions of the plan that you finally narrow down on for purchase.
Updates on Motor Insurance as per the order of the Hon’ble Supreme Court, 2019
As per orders of the Hon’ble Supreme Court, anyone buying car insurance after the 1st of September, 2019, he/she will be liable to take the compulsory third-party car insurance for a period of three years. There will always be the option to take annual policies for the Own Damage (OD) cover and the insured does not need to take that bundled with the three-years TP Policy. As a result, any car owner can, therefore, have the three following options while purchasing a car insurance policy –
- TP Cover for three years along with OD Cover for three years as well
- TP Cover for three years and an annual (one-year) OD Cover
- Standalone TP Cover only
Is Motor Car Insurance Compulsory for Car owners in India?
The Motor Vehicles Act, 1988 says that owners of all cars that ply on the roads of India must have a car insurance policy by mandate. Therefore, if the owner of a car does not have a valid TP Liability cover of a Motor Insurance Policy, he will not be able to use his car on the roads for either private or commercial purposes.
At any point in time, your car may get involved in unfortunate accidents/mishaps causing damage to Third-party property and/or bodily damage to the third party driver and/or even pedestrians. In all such cases, you will be needed to pay hefty sums as a means of compensation for the damage caused by your car. However, if you have the TP Liability Policy in place, it will provide you all the financial support needed and you will never again have to worry about such unexpected expenditures. The insurance company will take full responsibility for meeting the compensatory liability on behalf of the insured.
Basics of the Motor Insurance Policies you Need to Know
· The Premium
It is nothing but the sum of money that you have to pay to the insurance company, in exchange for which, you will have a valid car insurance policy for your vehicle in place.
· The Policy
The most important part of the policy is the Insured Declared Value or the IDV. IDV is the factor that decides the amount of premium the insured will have to pay. Insurers generally have tie-ups with manufacturers, which lets them provide their customers with optimum premium value.
· Natural Calamities
Any automobile that is in use also needs protection from various natural calamities. The kind of natural disasters covered under this section of the policy is explosion, lightning, landslide, flood, earthquake, typhoon/hurricane, hailstorm and inundation.
· Man-Made Calamities
In this section of the policy, the car you own will get protection against thefts, burglary, transit-damage, and external agents causing accidents like terrorist attacks, strikes and riots.
Assurances that car insurance provides:
1. Financial Protection
In case of theft or any other kind of damage to your vehicle, a valid insurance policy will give sufficient financial protection to cover your losses.
2. Legal Protection
If you have a car and you intend to use it on the roads of India, be it a hatchback, an SUV or a Sedan, you are mandated by the law to have a valid car insurance policy in place.
3. Personal Accident (PA) Cover
In the course of using the vehicle, the policyholder can face any kind of mishap causing permanent or temporary disability or even death. The Personal Accident Cover of the Auto Insurance Policy can cover such instances up to a Sum Insured of 15 lakh.
4. Freedom of all kinds of worries
Buying a car can attract different kinds of problems during its lifetime. But a valid car insurance can get rid of these worries for you saving you from different kinds of legal and financial risks. They may arise from damage that might have been caused to any third-party property or person, or even to you or your car. Either way, your interests will remain safe. 1086
The Different Types of Car Insurance Policies in India
Primarily, there are two different varieties of car insurance available in the markets of India. These two types cater to strictly different aspects,
1. Third-Party Liability
This is the most basic form of insurance cover that one can avail of for one’s car. The law dictates that this is the compulsory cover your car should have if you want it to ply on the roads of India. You can refer to the Motor Vehicles Act, 1988, for this which clearly states that a car owner should have at least a third party liability insurance policy for his/her car to make it legally usable on Indian roads.
Therefore, it goes without saying that this is the cover that will free you from the legal obligations. As is clear from the nomenclature, this cover will insure risks occurring from damages occurring to third-party property or bodily injury to any third-party person.
As the above point is not clear, you should probably take a look at the following and remember this if you ever face an accident:
- The Policyholder is considered as the first party
- The Insurer is referred to as the second party
- Any other person or property involved in the accident is third party
The point to note here is that since this is a very basic and limited kind of cover, the premium that the companies charge is also usually very low. Although it is true that this policy will be enough for your legal obligations, it will not be enough for the other requirements and benefits you might need.
IRDA, the Insurance Regulator in India is the body that regulates the price of this cover every year
Personal Accident Cover
If you take a third party insurance cover, it will also give you an owner-driver personal accident coverage as well. This means that if there is a case of accidental death or permanent total damage, the policyholder will be covered up to a Sum Insured of ₹15 lakh if he pays additional premium.
Personal Accident Cover Table
|Sr. No.||Accident / Event||Sum Insured (In %)|
|2||The dismemberment of both the limbs Or loss of vision in both eyes or one Or loss of vision in both eyes or one limb and one eye||100%|
|3||The dismemberment of one limb or loss of vision in one eye||50%|
|4||Permanent Total Disability||100%|
What is not covered in this policy?
- Own Damage to your car is not covered in this policy. If the insured car faces any damage to its own body, the liability-only policy will not cover such damages. The insured will have to bear all the costs of repair himself/herself.
- If the accidental damage/loss/liability happens outside the geographical area permitted, such loss will be beyond the coverage
- Damages or liability resulting from war, invasion and other warlike operations.
i. Comprehensive Cover
On the other hand, a comprehensive car insurance policy will cover all your needs and provide you with all the benefits you might need and some more. In fact, it already has a third party liability policy built-in and has a lot more added benefits. Here are the covers that the comprehensive plan offers:
i. OD Cover
Imagine your car has faced an accident and has been damaged. You would of course want your insurance policy to cover for the losses and lighten the financial burden for you. The OD Cover of the Comprehensive Car Insurance Policy will do that for you. The total premium of the Comprehensive Car factors in a small portion of the premium for this cover.
ii. Natural Calamity related risks
Any natural calamity like a cyclone, typhoon/hurricane, flood, landslide, hailstorm, etc. causing damage to your car will also trigger your comprehensive car insurance policy. This policy will cover any expenses that you incur to repair damages that these natural calamities might have caused.
1. Man-made Damages/Calamities
Instances such as theft, burglary, strikes, riots, malicious damages and such other calamities can also cause damage to you. The comprehensive car insurance policy will also cover these man-made calamities and ensure an absolute piece for you as a car-owner.
Apart from these basic covers, the companies also allow some extra beneficial insurance add-ons for your car, which you may often find extremely helpful. However, these add-ons, also known as riders are only available if you have taken a comprehensive auto insurance policy.
The Different kinds of Add-Ons Offered by the Motor Insurance Companies
1. Zero Depreciation
This is one of the most popular add-ons available in the Indian insurance market. It allows you to avoid any deduction towards depreciation, from your claim and lets you get a full settlement. This is something that basic comprehensive policy, without this add-on won’t be able to offer. If you own a car that belongs to the top and mid-segment expensive and luxury automobiles, this rider will help you avail wonderful benefits at very little costs.
2. NCB (No Claim Bonus) Protection
The NCB or the No Claim Bonus is more of a reward that the companies allow you for every no-claim year of your car insurance. The companies allow this in the form of a discount in the premium during the renewal of your policy. The minimum discount here is 20% and it can go as high as 50% of your renewal premium. The NCB Protection rider is interesting in the way that it will protect your NCB status even if you have a claim registered under your policy for the current year. This way, while renewing your policy the next year, you can still avail of the normal NCB benefits.
3. Return to Invoice
There may be cases of a total loss of your car i.e. instances when the value of your car is written off due to its theft or a major accident. In such cases, the Return to Invoice rider will help you get the original invoice value, including road tax and registration from the company as compensation. Normally, the calculation of the maximum coverage available in cases of total loss is done as per the IDV shown in the policy. The Add-on is normally allowed to four-wheelers which are up to three years of age.
4. Engine Protection
This is no news that the engine of a car is the part that is the most expensive and is also the most important. However, a normal comprehensive motor policy does not allow any compensation for engine repair. So, the engine protection add-on is definitely a smart choice. This will ensure that your car has adequate protection at all times. During floods, the engine’s circuits get damaged as well. The add-on will also cover all such damages, making itself indispensable, especially for people who reside in flood-prone areas of the country.
5. 24X7 Roadside Assistance
We have heard numerous stories about situations where the car has broken down, and that too in places where garages and service centers are not available. This can happen to any of us any day. In case you are not familiar with the area you are stuck in, the situation can very soon turn into a nightmare. The 24X7 Roadside Cover will give you respite in all such cases. With this add-on cover, the insurance company provides a number of emergency services for your car, round the clock. Some are mentioned below:
- Emergency Refuelling
- Replacement of punctured tyres
- Arranging for a mechanic
6. Car-Key Replacement Cover
We all know the scale of improvements and advancements that have taken place in the field of automobile security. Added to all this is the introduction of the smart key technology with smart chips which control locks, immobilizers, alarms as well as ignitions. However, this has only increased the cost for cases when things go wrong. For cars that belong to the new generation, it is difficult to find locksmiths who will be able to easily replace the car-keys if you happen to lose them.
It becomes mandatory that you contact the manufacturer for a new set of keys and that would definitely burn a hole in your budget. The Key replacement add-on will help you cover these unexpected costs up to the limit of the Sum Insured. What’s better is that, even if you find that someone had broken into your car, this add-on will cover the charges for locksmith’s services, new keys and new locks. You will find yourself covered from all aspects as far as your car keys are concerned.
7. Coverage for Accident of Co-Passengers
This add-on is also a variety of the accident cover, which is meant for the co-passengers in the car. If the passengers face a permanent or temporary disability or even death, the company will pay a lump-some compensation in all such cases. This add-on for the vehicle will thus show that you care for your co-passengers just as much as you care for yourself.
8. Car Accessories
There is a continuous increase in the number of options available in the market of car accessories in India. They not only make your car look cool but also help in enhancing your driving experience. However, if they are really expensive, theft or damage to the same can prove to be a big loss for you. The Car accessories cover add-on will insure your car accessories and cover your expenses in case of theft or damage. This way, even if you park in unfamiliar locations, you will not have to continuously worry about whether or not your car and your accessories are alright.
Here were the most popular add-on covers that the insurance companies offer. You have to carefully consider your requirements and choose the best pick for your car. These add-ons will definitely make your comprehensive plan more efficient and will prove to be worth your premium amount.
Insured Declared Value IDV in Car Insurance
Insurance is all about jargons and terms that you need to be aware of if you want to be thorough about the cover you have. When it comes to motor insurance, the most important term happens to be the IDV, which stands for Insured Declared Value. If you are about to renew or purchase your car insurance policy, you must have come across this term more than once.
In simple terms, the IDV stands for the present market price of your vehicle. Over time, as your car gets old, this value dips.
· Why is IDV important?
While purchasing an insurance policy for your car, it is important that you choose the correct IDV. This is the most important part of your car insurance policy. The IDV factor is that which will decide the amount of claim that you will get in case of any mishap. In case of total losses, i.e. where your car gets stolen or faces damaged beyond repair, your insurance company will pay your claim as per the IDV mentioned in your car insurance policy.
It is important to remember that the IDV represents the value of your car, not the current ex-showroom price. If you have a car that is a couple of years old, you will not receive the price for a brand new car for it during the claim. It is your IDV which will decide the amount of your claim.
The IDV also decides the amount of premium that the insured will have to pay to get his valid policy. If the car is old, the premium amount will also be comparatively lower. So as the value of your car depreciates, the IDV also decreases and so does the cover for your car. This is no surprise that the premium will also decrease accordingly. This is the basic reason why it is important to choose the correct IDV while buying a new insurance policy or renewing the existing one.
· Claims and IDV
As already mentioned, for total damage cases, i.e. cases where your car has been stolen or has faced damaged beyond repair, you will have to replace your car. If you have a comprehensive insurance cover, your insurance company will be liable to pay you the compensation for such a loss. Again, like mentioned before, the claim amount will be dependent on the IDV of the car fixed during purchase or renewal. If the age of your car is less than six months, the insurance company will give you about 95% of the car value as compensation.
Again, if your car happens to be as much as 4 years old, you will get only about 50% of the car value. This is the way in which IDV regulates the claim amount registered under your car insurance. Therefore, we reiterate that you need to be careful while fixing the IDV. So before you buy an insurance policy check the IDV and make sure that you are paying the correct amount of premium and will receive the correct claim amount when the time comes.
· How to Calculate the IDV?
Before any other source, the internet is our primary source in most cases to gather information regarding our car insurance. A basic online calculator can give you an idea about the IDV of your car. All you have to do is enter the details of your car i.e. the age, make and model of your car.
You can use IDV calculators from the websites of the various web aggregators. Also, if you have an insurance company of your preference, you can also visit their website or their mobile application for the purpose.
Once you have sorted out the IDV part, car insurance premium calculator 2020 will be your perfect way to know the premium for insuring your car. Many insurance companies have these calculators built-in their website. The idea behind checking out the premiums from different companies is actually like getting quotes from them. You can then weigh your options, check their feasibility and then make an informed decision as to which insurer to go for.
What are the Differences between Third-Party and Comprehensive Motor Insurance Covers?
You can understand the differences between the two basic kind of motor policies from the simple table given below:
|Coverage||TP Liability Only||Comprehensive|
|TP Property Damage||Covered||Covered|
|Personal Accident Cover||Covered||Covered|
|Own Damage||Not Covered||Covered|
|Vehicle Theft||Not Covered||Covered|
|Add-On Covers||No Option for Adding||Can be Added|
Let us take a look at an example to understand this difference even better.
Example: Parag and Nitin both bought a brand new Honda Jazz Hatchback Car each in 2020. The on-road price for the car in Mumbai is Rs 9.87 lakh. Nitin opted for a Third Party Liability only policy for his car. Let’s imagine the premium for the same was Rs 4000/-.
Parag on the other hand took a Comprehensive Policy (OD+TP) , the premium for the same being Rs 8500/-.
In July 2020, they both met with an accident due to their own fault. The total cost of repair for both turned out to be RS 20,000/- approximately.
Nitin’s Third Party Liability Only policy did not cover the car’s Own Damage costs at all. As a result he had to pay the entire amount from his own pocket.
Parag, on the other hand got the full compensation for the repairs he had to make for his car (minus the depreciation), as he had taken a comprehensive cover.
|Points to Note||Nitin||Parag|
|TP Liability||Paid by the insurance company||Paid by the insurance company|
|OD Costs||Not Paid by the Insurance. Comp.||Paid by the insurance company|
|Savings on Investment||0||₹20000-₹8500=₹11500|
N.B. Prices are indicative and are not absolute
Even though it might seem in the beginning that Nitin had saved money on the premium, in the long run he had actually incurred a total loss of Rs 20,000.
Understanding Premium for Motor Insurance
· What is Motor Insurance Premium?
The simplest way to define it is the sum of money that a customer has to pay in total to get his car insurance policy. Essentially, it is the amount of money that the insurance companies charge towards insuring your vehicle against covered risks.
· Are Car Insurance Premiums Static?
If you have a valid car insurance, you might have noticed that the premium sometimes increases over time, without any fault from your side. In spite of timely payment of premium, your car insurance premium might increase over years. This is because it is dependent on a number of dynamic factors. They are mentioned below for your better understanding:
- Previous Claims – In case you have had a claim registered and paid under your policy, the company will tend to see you as a risk-prone asset. This might result in an increase in your policy as compensation for the enhanced risk liability.
- Medical Condition – If you happen to develop a medical condition like diabetes or a heart ailment, as a result of increasing age, the company might consider increasing your premium. It makes you more prone to risk as a driver. The increased premium corresponds to an adjusted cover amount to cover the increased risks.
- Normal Wear and Tear of Vehicle – If you use your car very frequently, there is bound to be some normal wear and tear resulting from frequent usage. The insurance companies consider this as a very important factor while deciding the amount of premium. In the case of cars that have traveled for a specific number of kilometers or for old vehicle makes and models, the companies charge more to factor in the increased liability.
- Location – It is common knowledge that insurance premium in place with less traffic is often quite low when compared to other major or metro cities. The obvious reason for this is the increased probability of mishaps and accidents causing a claim. The increased premium is just commensurate with the companies bracing themselves up for higher risks.
- Age of the driver – Another important factor determining the premium is the age of the driver. Normally, young drivers have to pay less premiums. The premium amount might increase with the age of the policyholder and the companies often are skeptical about selling policies to elderly people. The deteriorating physical capacities and possible medical conditions are the major reasons behind such decisions.
- Can the premiums increase during renewal?
The above factors can cause your premium to increase during renewal at times. However, here are a few things which you can do to prevent that:
- Avoiding multiple small damage claims: When there is any damage, take an estimate of the repair. If the amount is very less, avoid intimating a claim for that. Multiple small claims can make the insurers consider you as a bad risk and that might result to increased premium.
- Safety Equipment – Safety equipment installations in your car can often get you reduced premium quotes from the insurance companies. Simple gear locks or steering locks can give you an edge, bearing proof of your responsibility and prudence.
- Online Renewal – It goes without saying that the online renewal of your policy will save both your time as well as money. The first reason is of course minimal documentation. Secondly, the various web aggregators will allow you to compare the premium quotes offered by different insurance companies and then choose the best-suited one for your needs.
- Insurer-loyalty – It is always advisable that if you are already associated with a particular insurance company, you should stick to them, provided their services are good. Insurance companies tend to reward loyal companies in multiple ways. One of the rewards being keeping the premium in control for subsequent renewals.
Key Benefits of Buying a Motor Insurance
· Increased Financial Protection
If you have car insurance it can protect you from a number of sources of expenditure. TP Liability, natural calamities, man-made calamities, riots, etc are only some of the various risks covered. The Third-party liability only cover can save you from any expense arising out of third party risks. On the other hand, the comprehensive policy can help you deal with both Own Damage as well as Third-party expenses
· Cashless Garage Service
Most of the reputed insurers now offer the cashless garage service. This means that you no longer have to pay for the repair first and then claim for reimbursement. You can directly go to any network garage of the insurer and get your car repaired without paying any major amount from your own pocket. The insurer will clear off the eligible part of your bill while you might only have to pay the compulsory deductible percentage of it.
· Personal Accident Cover
This is one very useful cover of the Motor Insurance, which you can avail of on payment of extra premium. This cover triggers for death or permanent or partial disability of the owner of the policy/vehicle. PA cover allowed is up to 1 lakh depending on the motor insurance cover.
· Towing Facility
In case your car gets completely wrecked or faces any major damage, the insurer will provide you with tow facilities under this cover. The facility will let you car be towed to the nearest service center. You can get this benefit up to a certain limit of the charges. This will depend on your policy coverage details.
· Add-On Covers
Add-ons on Motor insurance policies can prove to be very useful from the financial point of view. Just by paying minimal extra charges, you can enjoy the benefits offered by these add-ons. As already discussed, these add-ons include Nil Depreciation cover, key replacement cover, Return to Invoice, etc.
The No Claim Bonus in Car Insurance can be the most important benefit that you can most certainly avail if you have not had a claim under your policy. It is like a reward that the companies give you for a claim-free year. This is usually given in the form of a discount on your premium amount and the extent of it depends on the number of consecutive no-claim years.
The NCB discount percentage increases with subsequent years without a claim. The table of NCB discount percentages is as below:
Number of Consecutive Claim-free Years NCB Percentage
1st-year claim-free renewal 20%
2nd-year claim-free renewal 25%
3rd-year claim-free renewal 35%
4th-year claim-free renewal 45%
5th-year claim-free renewal 50%
Here are some facts about the NCB which you should definitely know:
- Available on Renewal – The insurer will offer you this discount on renewal only if you have not registered any claim under your policy in the policy year. The percentage of discount will depend on the number of consecutive claim-free years. Automatically, this benefit will not be available when you are buying new car insurance. As shown above, the discount varies between 20-50%.
- The Bonus is not attached to the car – This benefit is not attached to the car but to the insured. Thus, if an insured has three no-claim years and he now decides to buy a new car, he can avail of the bonus. Transferring the NCB from an old car to the new car is a very simple procedure and you can do it very easily.
You just have to send a letter to the insurer requesting the transfer of NCB along with forms 29 and 30. After receiving this, the insurer will issue an NCB Certificate with a validity of 3 years. You have to submit this certificate to the new insurance company to avail of the continued benefit of the bonus.
- Insurer – Like mentioned above, if you intend to change your insurance company for reasons of lower premium or better services, you can still continue to enjoy your NCB. You just have to mention all the previous details of the insurer and the new insurer will automatically calculate the discount percentage. During renewal, if you want to change your insurer, you only have to submit the previous year’s policy copy to the new insurer. In the case of online renewal, the NCB will be calculated as per your declaration. Please remember that the insurance company will in fact verify the data you have entered. Therefore, you have to be careful with your declaration.
- Only on OD Premium – The most important thing you have to remember is that the NCB discount percentage is only applicable to your OD component and not the Third-party Liability one.
- Add-Ons – It is a fact that the companies give you the NCB benefits only when there are no claims in the policy year. However, the NCB Protection Add-On will help you preserve your NCB status even when there is a claim registered in your name.
- Avoid claiming for small losses- As we have already discussed, NCB is paid only when there are consecutive no-claim years. So, you risk losing your NCB benefits if you claim for petty losses as well. It is a good idea to compare the amount of loss with the amount of discount that you might get if you preserve your NCB by not claiming for the loss. This will help you make an informed decision.
Inclusions in the Car Insurance Policy
· Third Party Liability Cover
The TP Liability includes compensation for any losses occurring due to damage caused by your vehicle to third party individuals or property. This is a basic and mandatory cover as per the Motor Vehicle Act, 1988.
· Natural Calamities
A Comprehensive Car insurance policy includes cover against natural calamities like landslides, hailstorms, floods, inundation etc. If your car is damaged by any of the risks mentioned above, the insurer will cover your expenses up to the eligibility amount.
· Man-Made Calamities
Man-made calamities include riots, strikes, warlike operations etc. The insurance company will offer you sufficient cover against such man-made risks as well commensurate with the terms and conditions of the comprehensive motor policy.
· OD and TP Coverage
A comprehensive motor insurance policy will include both the OD and TP coverage for your car. This essentially means that whether your car suffers damage itself or causes damage to any third party property or individual, your insurer will cover your losses as per the policy terms and conditions.
· Accidental Hospitalization
If you ever happen to get injured in an accident while driving your car, your insurance policy can cover your recovery expenses. Just that, for this you have to take an add-on for the same on your base insurance policy with some extra premium.
Exclusions in the Motor Insurance Policy
· Expired Policy Cover
If you do not renew your Motor Insurance Policy in time, the policy expires. In all such cases, the insurance company will not be liable to make any compensatory payments for third party losses or Own Damages to your car.
· Damages to your car due to war
Your car may happen to face damages to owing to warlike operations, nuclear attacks, invasion of hostilities. However, your policy does not cover such damages in its purview.
The insurance company can deny all liabilities if the person driving the car insured under the influence of alcohol or any other intoxicants.
· Illegal Activities
If it is found in the course of time that you have procured the car by illegal means or provided any falsified information, then the policy will become null and void.
· No licence
If it is found after an accident that the driver of the car was driving without a driving license or was not following proper traffic rules, the insurer will deny all financial liabilities towards the claim.
· Intent Negligence
Consequential losses will be excluded from your motor insurance policy. For example, if you know that your gear oil is leaking, and you are still driving your car, the insurance company will not compensate for any losses occurred due to any mishap in such a situation.
Exclusions in Car Insurance related to Add-Ons
· Wear and Tear Expenses
Your Motor Car insurance will not cover the normal wear and tear of the mechanical as well as the electronic parts. However, if you have taken the zero-depreciation add-on, your insurance company will cover for the replacement of these parts in your car
· Passenger Cover
Even for cases when you as the driver have a personal accident cover, the insurance company will not cover the passengers or other riders you might be carrying in your car. However, if you take a passenger cover add-on or an extended accident cover, you will able to cover your passengers as well.
· Invoice Cover
In case of a total loss of your car, i.e. if your car is stolen or damaged, the insurance company will only pay you the IDV amount as compensation. However, if you have taken the Invoice cover, you will receive the full amount you spent for repair or purchase. This feature is only applicable for the initial years of the purchase of the car.
How to purchase Car Insurance Online?
There are two places from which you can purchase car insurance policy online – either from motor insurance company’s official page or from a web aggregator. If you choose web aggregators for your purchase, they will help you compare among several insurers and let you choose the one that suits your needs the best. In fact, they will also help you save a lot on the premium and let you browse the several premium features that the top-notch insurers are offering.
· The Procedure
- Car Model and Variant
Car Models of higher value i.e. expensive cars often attract higher premiums.
- Year of Manufacture
From this data, the calculator will decide the IDV on your behalf. The premium, in turn, will be calculated based on the IDV.
- CNG Fitting in cars
As in the case of expensive cars, cars which are fitted with CNG also tend to have slightly range of premium.
- Additional Covers
You need to decide for yourself whether you would require additional insurance coverage or not.
- Documents required
All you need here is the Registration Certificate Copy and the filled in the proposal form.
These are the steps you have to follow to get your car insurance done online:
- Visit the website of a web aggregator and select the option – Motor Insurance
- If you already have a policy, here you just have to enter your Car number. After that, select the correct option from the drop-down section of previous policies.
- Now, if you want to get an online car insurance policy for your new car, click on the option – Bought a New Car
- In the next step, select your car’s make and model and year of registration.
- Enter the name of the RTO you have registered your car in.
- Finally, input your 10 digits mobile number and click on “Compare Quotes”.
- The quotes for your car insurance should be visible to you by now. Check the premium break-ups thoroughly and choose the one you want to go for.
- Provide the dates of inception of the policy and the year of manufacture of your car next. This will give you the final quote for your car insurance policy online.
Benefits of Buying Motor Insurance Online
- No Hassles
There is absolutely no hassle in buying a car insurance policy online. All you have to do is compare the various quotes, weigh your requirements and finally choose your desired option.
The online price comparison lets you compare different pricing models offered by various companies for similar policies. It might so happen that an agent might push a costlier policy to you giving you features that any other insurance policy with lesser premium will also be able to give. In fact, while comparing the policies, you can also check which companies are giving which add-on covers and so on.
- Simple Procedure of Renewal
Renewal of a motor insurance policy is even easier. All you will need for that is an internet connection. In fact, car insurance providers also send renewal reminders to clients so that they don’t miss their renewal dates. In case you are not happy with the services of one provider, you can easily shift the benefits of your policy to another insurer during renewal.
- Easy Claims
In case your car faces any accident and suffers damage, you may or may not have sufficient time to go for lodging claims offline. However, if you have taken your car insurance policy online, you can lodge your claims online too from any gadget that has basic internet access.
Most car insurance companies allow additional discounts for policies that clients purchase online. These discounts are, however, not available on the offline purchase of the policy.
List of Top Motor Insurance Companies in India
- ICICI Lombard Car Insurance
- Bajaj Allianz Car Insurance
- Bharti Axa Car Insurance
- Kotak Car Insurance
- TATA AIG Car Insurance
- Oriental Car Insurance
- HDFC Ergo Car Insurance
- United India Car Insurance
Easy Method of Calculating Premium with the help of Car Insurance Calculator
The age of the buyer is very crucial to consider while deciding the premium for the policy. People below the age of 25 years are considered more accident-prone and generally attract higher premiums.
If you live in a densely populated city, your chances of being in an accident also become higher. Therefore, the insurance premium automatically goes higher.
- Details of the vehicle
Another important factor while deciding premiums is the type of fuel. So, a car fitted with CNG will automatically attract more premium than petrol or diesel ones. The year of manufacture of the car i.e. the age of the vehicle is also just as important in deciding the premium. The older your car gets, the lower will its IDV go and so will its premium as they are all interdependent.
Talking about discounts, the most important one is the NCB or the No Claim Bonus. For every consecutive claim-free year, the percentage of NCB varies from 20-50%. There are a couple of other categories of discounts as well.
For example, if you install an anti-theft device, that has the approval of the ARAI, you can avail of a discount of 2.5% on your premium. Moreover, if you are part of an automobile association, that will also fetch you a discount.
Now that you come to a point where you have to consider so many factors before choosing the correct policy, it might become a little overwhelming. Especially if the domain of insurance in absolutely new to you. This is precisely where the online premium calculators come to the rescue. Here’s how:
The calculators automatically take into consideration all these above factors. Then they show you quotes from either just a single insurer or from multiple insurance companies. A potential customer can slightly alter the features to take note of how it can affect the total premium. This is the procedure where the customers can find the perfect insurance policy that suits their needs and also does not disturb their budget.
Renewal of Car insurance
While buying a new car, an insurance policy usually comes included with the package. This insurance remains valid for a year and you have to renew it after that.
Now, if the owner of a car fails to renew the policy, it will no longer remain valid. Thereafter, he/she will be committing an offense as the law makes it mandatory to have a valid insurance policy to make your policy road-legal. Therefore, car insurance policy renewal becomes a very important thing to keep in mind and get it done in time. The ideal time to start the renewal procedure is 30 days before the expiry of the policy.
· Documents Required
While going for the car insurance renewal, it is advisable that you keep some documents handy so that the renewal process can become hassle-free. Here are some of them:
i. Registration Certificate
For the calculation of the renewal premium, you will need some basic information like make and model of the car, the year of registration, name of the owner, place of registration, hypothecation/lease details, etc. Now the registration copy is that one single document that contains all this info together. Therefore, it is always a good idea to keep both a soft copy as well as a hard copy of the same with you.
ii. Policy Documents for Previous Year
If you are about to switch insurers, your previous insurer will provide you with a No claim Bonus amount, once you clear out your accounts with them. This amount can be transferred if needed. By factoring in this amount in the premium for the renewal, the premium will become almost negligible.
After this, all you have to do is provide the information to your broker/agent and let him do the rest of the work.
· Points to Keep in Mind
- Always make it a point to provide the correct information regarding your car to your insurance service provider. Be it the make, model, registration year, NCB percentage or registration city, the information you provide should be authentic.
- Remember to compare quotes from various companies and also enquire whether any of the companies are providing the cashless facilities in the areas in which you reside.
- Enquire about the various Add-On Covers available and make the most of them.
- When you receive the final documents, make it a point to verify even the smallest details provided in the said document.
- If your policy has not expired, your renewal can be done instantly. If it indeed has expired, the insurance company will probably carry out an inspection to verify whether your vehicle is roadworthy. You can get all such updates from your concerned agent. Once the inspector gives the green signal, your renewal is good to go.
Car Insurance Claims
· Inform the Insurer
The first thing you need to do in case of a claim is to inform the insurer through email, phone or app. This has to be done at the earliest. With respect to claims, most insurers have a very strict deadline for intimating. So, in order to be on the safe side, inform your insurer as soon as you meet with an accident.
· First Information Report (FIR)
Please note that while the FIR is not mandatory for a claim, it often comes in handy for speedy claim clearance. Remember to file an FIR in the nearest police station. In case your insurer asks for the same, remember to provide them with the original copy of the document.
· Repair and Evaluation
When you intimate a claim to the insurer, they usually send an independent surveyor to assess the loss. When the said assessment is done, get your repairs done from a nearby network garage for cashless services. You may repair your car from any other garage and get the repair money reimbursed from the insurance company. If the insurer asks for supporting documents, cooperate with them so that your claim gets cleared promptly.
· Claim Approval
Once you have provided all the documents asked for and the insurer is happy with the same, they will most certainly approve your claim. If you made the repairs in a network garage, they will send the claim amount directly to the garage. If it is a case of reimbursement, the insurer will send the money to the account details mentioned in the policy documents.
Formalities for a Third-Party Policy Claim
An FIR is a must for all third-party liability claims. After filing the FIR, you have to provide the original to the insurer along with the claim forms and other documents.
· Policy Documents
It is also mandatory that you share a copy of your policy to the third-party involved in this case. This will let them claim the compensation from your insurer without any involvement on your part.
· Motor Tribunal
The MACT or the Motor Accident Claims Tribunal settles all kinds of third-party liability claims. For that to happen, the third-party involved in this case should lodge a claim in the tribunal.
How to Claim Online under a Car Insurance Policy?
Customer care has become very important to insurers nowadays and they are leaving no stones unturned to make sure that the customer experience is top-notch. Many companies have integrated their claim settlement process online, in this very spirit.
For these companies, you can just log into the company’s website and lodge a claim. Now that you have registered your claim online, the rest of the process will follow the normal path.
Once you have registered the claim, the insurer will send an inspector to estimate the loss and you have to provide all necessary documents. They usually claim forms, KYC documents, FIR copy, registration certificate of the car, etc. The settlement process remains the same.
GST on Car Insurance Policies
As we all know, the Govt. has implemented the GST to centralize the system of tax imposition in India. In GST, car insurance comes under the class of General Insurance. The GST percentage thus levied on these policies by 18%.
As far as taxes are concerned, there is a rise of 3% for motor insurance policies. As a result, the motor insurance policies have become somewhat expensive than what they were before.
Bundled Car Insurance
A recent IRDAI circular has introduced the long-term Motor Third Party Insurance. As a result, at present, a customer will have two options – A Long Term package cover which will offer both TP and OD insurance for 3 years or a Bundled Motor insurance cover with a 3 Year TP Cover and an OD Cover for 1 Year.
There might often be the need to make changes in existing car insurance policies and the insurers do that via endorsements. There are a number of endorsements available for car insurance. The endorsements may pertain to the following:
- Change in the car insurance owner/policy holder’s address
- Changes in car owner/policy holder’s name
- Change in car owner/policy holder’s email id or mobile number or both
- Change in the car registration number
- Change in the car engine number
- Change in the car model and built
- Change in the car variant
- Increasing voluntary deductible
- Correction of premium
- Correction in the car’s Insured Declared Value (IDV)
- Corrections of No Claim Bonus (NCB)
- Transfer of ownership of the car
How to Make Endorsements
It is indeed extremely easy to make endorsements in car insurance policies. You just have to inform the insurer about the changes you want in your policy via phone, email, letters etc.
The insurer will analyze the request and if they find it feasible, they might ask for some more documents. After verification of submitted documents, the insurer will be approving the request. Once they make the changes, they hand over the endorsed policy to the policyholder.
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