Car insurance provides the necessary financial cover to your car against various damages, theft, third party liability. We all are aware of the fact that in India, if we drive a car without a vehicle insurance plan, we may have to pay a fine for it. Car insurance is beneficial and offers useful features which definitely help in times of need.
- It will also provide necessary cover against all financial liability that results in injury or death of a third party or damage to property.
- Personal accident will also come under various car insurances.
How many types of car insurance policies are there in India
In India, car insurance is basically classified into two different forms which include:
Third Party Insurance:
Third party insurance has been considered essential under the Motor Vehicles Act. Third party insurance covers damage caused to a third party or injured in an accident, damage to third person’s property, etc. Under this cover, you will not have to bear any kind of expenses, all the expenses will be borne by the insurance company.
Comprehensive cover is the most effective form of car insurance. Under this, you not only get third party cover, but the insured vehicle also gets complete cover. It provides cover for the insured car and third party liability as well as maximum expenses.
The benefits of car insurance are as follows.
Car insurance offers you a variety of benefits, which are as follows.
1 Cover against loss or damage
Coverage against loss or damage caused by accidents, fire, theft, explosion, riots, terrorist activities or natural calamities.
2 personal accident cover
Cover against financial liability due to injury or death of a third party or damage to the vehicle.
3 extra covers
Car insurance has become an essential in India due to its benefits. You should also invest in a car insurance policy to protect your vehicle. With third party liability cover, you can protect yourself from paying hefty fines in case of accidents.
4 zero depreciation cover
As your car gets old and its market value decreases, you can go for zero depreciation cover to cover the same value. Zero depreciation cover can be availed only on 3 years old car. You will have to pay extra to avail this add on cover.
5 No Claim Bonus
When you do not make any claim during the policy term, you will be liable to avail discount at the time of renewal and such waiver is known as No-claim Bonus.
6 Roadside Assistant
With an effective car insurance policy, you will get the option to avail the cover as an add on. These benefits can be in the form of emergency transport, daily allowances, assistance in case of a bad battery, taxi benefits, towing facility and many more. These little things help you effectively when you are stuck in unwanted situations.
7 invoice cover
It is an add on cover that helps the policyholder in case of complete loss of your car in case of any damages due to accident. With the help of this add-on coverage, you will get the amount which will compensate the difference between the invoice value and its insured value.
8 replacement cover
This feature of this add on assures you that if you lose your car key, this feature will cover the replacement expenses. It will also provide coverage for the purchase of a new car lock. The insured will be able to take advantage of this facility once in the entire policy.
9 Cannot Get Cover Under Basic Car Insurance Plan
There are certain risks which are not liable to get the required coverage under a basic car insurance policy. You can compensate for the loss with the add on feature in the cover.
- Expenses due to common car breakdowns are usually not covered by a standard plan. However, you can get cover on it by opting for zero depth cover.
- Generally, a car engine is not liable to receive cover for non-accidental malfunctions. You can cover by engine guard cover option.
- Passengers accompanied by the car or the driver of the car are not covered under the basic car insurance policy. However, you can cover all these in the policy along with the necessary accident cover.
- The car insurance policy is valid only in India, but it can be extended to neighboring countries such as Bangladesh, Sri Lanka, Bhutan, Pakistan, Nepal and Maldives by paying an additional premium of Rs.500 per vehicle.
- It is always advised to go through the policy documents carefully and understand all the terms and conditions included therein. This will help you at the time of filing a claim, as it protects you from confusion and provides better clarity of the entire process.
Documents required to buy car insurance
- driving license
- vehicle information
- bank statement
- Duly filled claim form
- tax receipt
- All paperwork sent by the insurance provider (filled out by you)
How to save on car insurance premium?
Select the correct IDV: Low IDV demands to pay less premium. (But calculate wisely, as IDV is the highest value the insurer can indemnify you).
No Claim Bonus: Your responsible driving skills are rewarded with a bonus of up to 50% on your premium, for every consecutive claim-free year. Isn’t this an added advantage?
Safety Devices: Automotive Research Association of India (ARAI) approved anti-theft devices can give you up to 2.5% off on your car insurance premium!
Become an AAI member: Membership of the Automobile Association of India, an organization run by IRDAI, entitles you to a concession on self-harm premium.
Claim Settlement Ratio of Top Car Insurance Companies in 2019
There is no doubt that it is necessary for a person who has a car to invest in a car insurance plan so that he can get the required financial cover easily. But, how will it help if you are not able to get the claim amount easily? Hence it is important to choose the right insurer with a high claim settlement ratio.
But it is equally important for you to understand how you can file a claim and how the entire claim settlement process works.
Reasons for car insurance claim rejection
No valid license Second-hand car but no insurance Delay in notifying your insurer Effect of alcohol or drugs Consequential damages if car is too old for repair Repair car without informing your insurer Installing unregistered CNG kit Exceeding limit.