In the 21st Century India, owning a car has become more of a daily necessity than just a status symbol. However, the ecstatic feeling of owning a car could be short-lived, if your four-wheeler is involved in a road mishap, is stolen, or an accident. Dealing with such a situation can be frustrating and full of inconveniences. Moreover, you will have to spend a lump sum amount out of your pocket for the damages sustained by other people or their property. This is where a car insurance policy is necessary as it ensures the protection of your vehicle against any probable financial loss.
What is car insurance?
Owning and operating a vehicle entails a number of responsibilities that you have to fulfil on a regular basis. Car insurance is just one of the many measures you have to take to ensure that your vehicle remains protected for the near future. Not only does it keep you financially stable in the case of accidents or misfortunes, but it also makes you feel safe as you drive your own car.
How does car insurance help?
Car insurance provides two types of coverage to the insured-
Third-party liability coverage
The Third-party Liability Cover offers protection against any legal liability that may result in the death/permanent injury of a third party or damage to the surrounding property in the event of an accident. Law mandates having a Third-party insurance cover.
Comprehensive Policy coverage
A Comprehensive Policy Cover is essentially an Own-damage insurance cover. In addition to third-party protection, this policy also provides financial protection to your own vehicle, safeguarding it from any loss/damage in the event of an accident, theft or calamity. The damage/loss can be a result of man-made/natural calamity, for instance- fire, explosion, lightning and flood, burglary, theft, riot or strike.
Keeping in mind the condition of the roads and the ever-increasing number of mishaps occurring every day, it is advisable to purchase a Comprehensive Package insurance cover since it offers a wider coverage.
Four Reasons to Purchase Car Insurance
Data published by a recent report states that 400 fatalities are recorded each year due to road accidents in India. This is certainly not a pleasant scenario and poses a question as to how safe are we while driving a vehicle. Keeping this in mind, the importance of getting car insurance cannot be denied. Here are four reasons why you should get insurance for your four-wheeler right away-
The law mandates Car insurance policy
As per the Motor Vehicles Act of 1988, every motor vehicle must at least have a Third-party Liability Cover in its name. Anyone who does not comply with the law is entitled to a heavy penalty, even a prison term.
Safeguards you against any unforeseen event
What if your vehicle gets involved in an accident or vandalism during a riot? What if your car bears upon serious damage due to bad weather conditions, over which you have no control. Well, if you have a car insurance policy in your name, you need not worry about such unfortunate events. Apart from protecting you against legal liabilities, the insurance policy also covers the damage to your own vehicle. It will bear the expenses of repairing and servicing the car.
Coverage for repair and damage
You have probably had to save up a considerable amount of your money over the years to be able to finally purchase your dream car. If you own an expensive, luxury car, then the need for having car insurance is more. The parts and accessories of luxury vehicles are custom-made and so repairing or replacing them can be very costly. Therefore, getting the original parts will cost you more if you ever meet with an accident. However, with a car insurance policy, you can rest assured that the cost of replacing your vehicle’s original parts will be borne by the insurer.
Easy claim settlements
Accidents, on their own, are stressful. They leave you in a state of trauma and grief. Coping with such an eventuality can be difficult, let alone handling the situation on your own. All you wish for is someone to advise you and take care of the legal procedure. Your car insurance provider can come to your aid during such an emergency. Your insurer can walk you through help you find a garage and settle your insurance claim on time, thus making it easier to deal with the traumatic event.
What are the benefits of having a car insurance policy?
Want another reason to buy car insurance? We will give you six! Besides providing financial protection to your vehicle, a car insurance policy offers a host of other benefits. Here is a look at six such benefits that you just cannot afford to miss-
No Claim Bonus
Most insurance companies offer an incentive known as a No-claim bonus to the insured for not making a claim in a calendar year. The policyholder can avail the NCB benefits in the form of discounts on the premium. For each claim-free year, the policyholder can accumulate attractive discounts on the premiums at the time of renewal of the car insurance policy.
All insurance companies offer additional benefits to the policyholder in case of emergencies to extend the coverage of the existing insurance policy. These benefits fall under the Add-on covers and need to be purchased separately. Some of the most common add-ons offered by most insurance companies are-
Let us say you are traveling to a distant place and suddenly your car has a flat tire. With the Roadside Assistance cover, you can get quick access to services in the event of such a crisis. It also helps you with a flat battery, or fuel assistance while driving through a remote location or on the highway.
The individual owning or driving a four-wheeler gets personal accident coverage in case an accident occurs while travelling. If you opt for a passenger add-on, it will offer coverage for unnamed hirers or pillion riders and will pay the benefit in case of an injury or accidental death.
Zero depreciation cover
A Zero depreciation cover ensures that depreciation of the vehicle is not taken into account while paying claims.
This cover will come to your aid if you ever lose your car key. The Key Replacement cover will reimburse you for the cost of replacing a lost key of your car.
This add-on cover provides the insured with an option to bridge the gap between the cars’ Inured Declared Value (IDV) and the invoice value. With this coverage, you are liable to receive a reimbursement of the total loss incurred, i.e. the on-road price you have paid for the vehicle, in case you lose it.
Nothing is scarier than having your car break down in the middle of nowhere, with no garages or repair shops nearby. Normally, you would have to look for a garage and then push your car all the way to the repair shop to get it serviced. However, having a car insurance policy can be a boon during such a crisis. Many insurance companies have tie-ups with a network of garages across the country. You can get your vehicle repaired and serviced at any of these garages without having to pay the bills out of your own pocket. The insurer will settle the bill with the garage owner directly on your behalf once your car is repaired.
Seven Ways to Reduce Your Car Insurance Premium
The car insurance premium is the amount you pay to the insurer at the time of purchasing the insurance policy. There are several factors that determine and affect the premium of the policy, such as the age and model of the car, certain specifications like the cubic capacity of the vehicle, the IDV of the vehicle, the place of registration of the car etc. When it comes to the cost of your insurance policy, everyone prefers to opt for the best coverage at affordable premiums. If you too are looking for ways to reduce your premium without compromising with the coverage of your car insurance policy, here is what you need to do-
Avoid raising claims for minor damages
If your car gets involved in a minor accident and sustains a few damages, the repair for which requires only a small amount of money, then it is better to pay the bills from your own pocket. If you make a claim for minor damages, then you will not be entitled to receive the NCB benefits, i.e. discounts on your premium during renewal.
Choose a higher voluntary deductible
The voluntary deductible is the amount you have to pay during a claim while your insurer will cover the remaining portion. The higher the deductible value, lower will be the premium of your insurance. Your insurance premium tends to decrease when you choose a higher voluntary deductible value because choosing a higher deductible means your share of the claim money is higher.
Grab on to concessions and discounts
Many insurance companies offer concessions to policyholders, who are a part of renowned automobile associations. For instance, if you have a valid membership of AAI (Automobile Association of India), your insurer will offer lucrative discounts on the car insurance premium.
Preserve your NCBs
As stated earlier, avoid filing claims for minor damages to accumulate your NCBs. The company rewards policyholders when they do not make claims in a calendar year by giving them NCBs. During renewal, the insurer will give you discounts on your premium against the accumulated NCBs.
Install a security device
Make sure your car is equipped with safety equipment. Installing a security device, such as an anti-theft device in the vehicle, can lower your car insurance premium. If the security devices are approved by the Automobile Research Association of India, then you will receive discounts on the insurance premium. This obviously means you need to pay a low premium amount while purchasing the insurance policy.
Stick to one insurer
Most car insurance companies offer a host of benefits to their customers to make their stay worthwhile. The discounts offered on premiums by the insurance provider are also variants of such loyalty benefits. Insurance companies offer low premium rates as a loyalty bonus to the customer. This means, if you have been with the insurance company for an extended duration, then the insurance provider will offer a lower rate of premium for the car insurance policy you purchase.
Do not let your car insurance policy lapse
When you purchase an insurance policy for your car, you must remember to renew the same at the end of the tenure. If you fail to renew the policy before the due date, it will lapse. This means you lose all the coverage and the benefits, including your NCBs that come with the car insurance policy. Obviously, you will then need to buy a new policy, which may not be as affordable as your previous policy. To avoid this situation from occurring, make sure you renew your car insurance policy on time.
Things to Consider Before Buying Car Insurance Policy
With a myriad of insurance plans, it becomes difficult for vehicle owners to choose the right car insurance policy. To simplify the process, here we present a few things that one must keep in mind while purchasing an insurance policy for the four-wheeler-
Premium refers to the amount that every insurance holder has to pay in order to enjoy the benefits of car insurance policy. The premium amount is determined based on factors like age of the vehicle, model, cubic capacity (cc), IDV (Insured Declared Value), your registration location etc.
Many bike insurance companies offer additional benefits such as Passenger cover, Zero Depreciation cover etc. to the insurer. These benefits do not fall under the purview of the basic Third-party Liability and Comprehensive Package policies. The insurer needs to purchase such add-on covers separately to expand the scope of the policy.
Claim Settlement Ratio
Claim settlement ratio is the measure of the company success rate concerning claim settlements. It is essential that you choose the insurance company that has a high claim settlement ratio as it implies the company will very likely settle your claim.
Network garages/cashless settlement
Most insurance companies have tie-ups with thousands of garages (known as network garages). If you ever need assistance while traveling down the road, or meet with an accident, you can avail services such as towing facility and damage repair at any of these network garages, free of cost. This means, you do not have to shell out money out of your pocket, as the insurer will settle the claim on your behalf. What you must look for is the number and quality of the network garages. A wider network means a wider range of options to choose from and ensures faster claim settlement.
Now that you are familiar with the practical details of a two-wheeler insurance policy, feel free to talk to your insurer. You can compare different car insurance plans online before settling for the one that suits you the best.
Five Steps to Purchase Car Insurance Online
Buying car insurance online spares you time and the hassle of visiting various insurance agents. Moreover, if you opt to purchase the insurance policy online, you can get other benefits as well.
- Visit different car insurance websites to check out various insurance plans. All insurance companies provide two types of coverage- the Third party Liability cover and the Comprehensive Package Policy cover. Go through the benefits and features of the two policies.
- When you are browsing through an insurer’s website, you may come across many attractive add-on covers. Although such add-on covers offer extra benefits to your vehicle, keep in mind that you will not need all of them. Choose the one that you need.
- Before you make a purchase, it is important to keep in mind the quality of service provided by the insurance company. One way you can get a fair idea about your insurer is by going through the reviews given by other customers. Buy your car insurance policy from a company that offers full coverage at affordable premiums and has a high claim settlement ratio.
- Finally, once you have zeroed-in on your insurance company, log in to their website, and fill in the details on the car insurance form. Once you are done filling up the form, you will need to pay the insurance premiums. The payment can be done online using a debit/credit card/net banking/digital wallet.
- After you have made the payment, you will receive an SMS alert/email confirming the purchase of your car insurance policy.
Most insurance companies have a team of customer care executives round-the-clock, who can assist you over a phone call.
Do’s and Don’ts of Filing a Car Insurance Claim
Whether it is a brand new car or a pre-owned one, having a car insurance that suits your vehicle’s requirements and caters to your needs, should be your utmost priority. By law, getting an auto insurance policy is imperative to all vehicle owners in India. However, filing for car insurance can be quite confusing and complicated, especially if you are a first timer. Here are a few tips that will make the car insurance claim process hassle-free and much easier for you-
Contact your insurer
Get in touch with your insurance company as soon as possible in order to register the claim. Not doing so may lead to complications in the claim process. Most of the companies follow rigorous timelines, so the sooner you call them, the better.
Lodge an FIR
According to recent statistics, around 16-18 lives are claimed every hour in India due to motor accidents. Lodging an FIR or First Information Report is necessary for such situations. Unless you inform the cops about the road accident, you will not be able to settle your car insurance claim.
Examine your car insurance policy
Make sure you have gone through your car insurance policy and understood the terms and conditions. That way you will have an outline of the coverage that your policy offers, and what all is excluded.
Keep your documents handy
Keep a record of the date and time of the accident. Provide the exact location and appropriate description of the accident. You will need the following documents while filing for the insurance- a duly signed claim form, a copy of the registration certificate of your vehicle, and a copy of your driving license. In case of an accident, you should immediately have the damage evaluated by an authorized representative. In case of a theft, you will require a record of a police complaint or an FIR.
Do not flee the accident spot
Escaping the scene of an accident will not help your case during the claim process. Do not budge your car or the other party’s vehicle from the spot. Many people tend to avoid getting involved with police and commit a mistake by making an informal settlement with the other party. Doing this you only miss out on your car insurance claim. An FIR is mandatory to file an insurance claim.
Do not sign any document before reading the policy terms
If you give away a written agreement to the policy provider without going through the terms- without understanding what it covers and what not- there are chances that you may end up spending from your own pocket for the damages caused.
Do not settle for the initial claim amount
Before accepting the ‘final settlement’ from your insurance provider, make sure you have done a review of the policy terms. They will probably offer you a much lesser amount against the claim to settle the matter promptly. However, do not accept any payment from the insurance company if you are absolutely convinced that the claim you are filing for is worth a lot more.
A car insurance policy offers financial safety for the expense and damage at the time of a serious situation. Top insurance companies offer hassle-free claim settlement process but each one differs based on the type of insurance.
Steps to Take While Raising Car Insurance Claim
Buying car insurance is not merely enough. You also need to be aware of how to file an insurance claim. In case your vehicle is involved in an accident, or is stolen, or sustains a few damages due to unavoidable natural disasters, knowing how to file a claim is something you need to be well versed in. Here are the steps you need to follow to file an insurance claim-
In case of Own-damage claims
As soon as you inform your insurer, the following events will occur-
- The insurance company will assign an authorized representative to inspect your vehicle and evaluate the situation. He will examine the evidence for any injuries and damages incurred.
- Your vehicle will be towed to one of the network garages for damage assessment and repairs. The repair work will commence once the insurer approves the estimated cost of servicing and sends a confirmation message to you and the garage owner.
- The claim process will be resolved after the payment is made. Based on the coverage offered under your car insurance policy, you will have to pay a portion of the claim amount that corresponds to depreciation and deductibles.
- Finally, the insurance company will close the case once the claim is settled
You must file for a police complaint while informing the insurer of the accident. This is a crucial step for ascertaining the claim validity.
In case of Third-party claims
In case your car gets involved in an accident resulting in death, injury or damage to other’s property, the third party can raise a claim for compensation in the following way-
- The third party will lodge an FIR with the police
- You should share a copy of your car insurance policy with the third party so that she/he can file a claim under it
- All third-party insurance claims are settled in a Motor Accident Claims Tribunal (MACT). The third party has to file a case at a local tribunal.
Claim in case of car theft
If your vehicle is stolen, you will need to follow the steps below-
- Lodge a police complaint/FIR
- Inform your insurance provider of the theft
- Submit the following documents- a copy of your vehicle’s registration certificate along with the driving license, a copy of the FIR and the car insurance policy, and a letter addressing the Regional Transport Office (RTO).
Five Points to Remember before Renewing Car Insurance Policy
When you buy an insurance policy for your car, you must understand that the coverage and the benefits that come along will last for a specific period. After the tenure of the insurance policy expires, you will have to renew the policy to keep enjoying the maximum coverage and the various advantages. Before renewing your car insurance policy, here are five points you must remember-
Decide prior to the expiry
Whether you have purchased a short-term insurance policy or a long-term, it is best to make a decision regarding the renewal of the car insurance policy at least a month before its expiry. The short-term insurance policy needs to be renewed annually, while the renewal frequency for the long-term policy is once in every 2 years or 3 years, depending on the tenure.
Avail your NCB
If you have not claimed a No Claim Bonus under your one-year car insurance policy yet, you can ask for the same at the time of your policy renewal. Most insurance companies offer NCB benefits up to 50%.
Review your insurance policy cover
Before you renew your insurance policy, review your current policy cover- the type of coverage it provides, the tenure of the policy etc. The policyholder can opt for a lesser or wider coverage while changing the details of the policy. For instance, you can expand the coverage of your policy by opting for the add-on covers.
Correct the errors
If you notice an error or discrepancy in the information provided in the insurance policy, make sure you rectify them during the renewal process. For instance, if you have recently moved to another state/city, you will have to change the address detail in the existing insurance policy. You can easily get the changes made at the time of renewing the policy by providing the required documents.
Most insurance companies allow you to pay the premium and renew the car insurance policy within a grace period of 3-30 days. If you renew the policy within the mentioned period, you will not have to pay any extra cost as a penalty.
One should ideally renew his/her insurance policy before its expiry, or else the policy will lapse, and you will lose all the benefits that come with the same. In case you have missed your due date, you can still renew your lapsed insurance policy online or offline. All you need is a copy of your previous policy and the registration certificate of your vehicle.
There is no better feeling than being able to buy a car that suits your personality, gives you comfort, and comes with an affordable price tag! Car brands these days promise you a reliable and comfortable ride with much-improved technology and great speed, but what about safety? There is no way you can predict the unforeseen. Car insurance is just what you need to ensure that your ride on the road is safe. The policy provides a financial safety net to your vehicle and you in case of a road emergency or casualty. Moreover, you get a myriad of advantages and extensive coverage, along with the assurance of fast claim settlement and policy renewal. So without further delay, get suitable car insurance for your vehicle and enjoy a safe ride.
Car Insurance FAQs
Yes, as per the Indian Motor Vehicle Act 1989, owning a valid insurance policy for your motor vehicle is mandatory. Every car plying on the roads in India must have at least a Third-party insurance coverage. Anyone who does not comply will be penalized.
Third-party car insurance protects you against any liabilities that may arise from an accident, leading to the death or permanent injury of a third party or damage to their property. To sum it up, this type of car insurance policy covers-
· Damage to the third party property
· Accidental death/injury leading to permanent disability of the third party
Comprehensive insurance plan is a prudent way to safeguard your own vehicle. This particular car insurance plan protects you and your vehicle from any accidental damage, theft, or natural/man-made calamity. When you purchase the Comprehensive insurance plan for your vehicle, the policy provides additional protection to the insured vehicle in case of any unforeseen event besides offering you Third-party coverage.
You can buy car insurance online following just a few simple steps. In fact, purchasing the insurance policy online is quite an easy procedure. Visit the website of your chosen insurance company and fill in the necessary details. Next, you can choose the policy tenure- whether short-term or long-term- and click on the ‘buy’ option. You can pay the insurance premium using your debit/credit card, net banking/digital wallet.
The benefits of purchasing car insurance online are many-
· You get to compare various plans online, evaluate the several options available, and finally choose the one that best suits your needs
· Buying insurance online is timesaving. The process is hassle-free and fast and can be done following a few steps.
Yes, as per the regulations of the Insurance Regulatory and Development Authority of India (IRDAI), service tax is applicable on the premium you pay for your car insurance policy.
If you ever lose/misplace your car insurance papers, the only way to get it back is by applying for a duplicate set of documents for your vehicle. For that, you will first need to contact your insurer and inform him about the same as early as possible to get a replacement certificate.
Next, file a police complaint to report the lost/missing car insurance documents.
Write an application to the insurer for the issuance of a duplicate car insurance policy. The application should include all the necessary details, such as- name of the policyholder, the policy number, the type of insurance coverage, the date of issuance of the policy etc.
Finally, you will need to execute an indemnity bond. The indemnity bond should include the policy number, the full name of the policyholder; it must be signed by two witnesses who are not family members of the insured.
Your insurer will issue a duplicate copy of your car insurance policy once he receives all the relevant documentation regarding the same.
Yes, it is necessary to change and update the registered address on your car insurance policy at the Regional Transport Office (RTO). You will have to contact and inform your insurance provider about the same. You can do this via email, a toll-free number, or in person.
These changes can also be made online. You will only need to visit the company website and fill in the details in the required columns.
You can also issue an endorsement to record changes like a change of name or address, and change of vehicle model.
If you wish to transfer the ownership of your car insurance policy to someone else, you will need to inform the insurer of your decision and hand over the required documents to the new owner. The buyer needs to apply for the transfer of the policy with the insurance company within 14 days from the date of transfer of the insured vehicle in his/her name after paying the endorsement premium for the remaining tenure of the policy. You will have to go through some paperwork. If you claim the No Claim Bonus before transferring the ownership of the policy to the new owner, you will have to pay a nominal charge. Remember, the NCB accumulated by you during the tenure of the policy will not be transferred to the buyer.
To keep your auto insurance policy active, you will have to pay the premium at the time of purchasing the policy. The insurance company will send you a bill with the due date and amount. Normally, you will have to pay a service charge for the bill. However, this nominal charge can be avoided if you choose to pay the premium online. Many insurance companies provide their customers with an option to make the payment on a monthly/quarterly/half-yearly basis. Some companies even offer a grace period to pay the premiums. In case you fail to make the payment within the given period, your car insurance policy will lapse.
Contact your insurer and register the claim online or visit the nearest branch with a duly filled claim form. Make sure you have the necessary documents to support your claim. In case of a theft or an accident, you must lodge a complaint at the police station and immediately have the damage evaluated by an authorized representative of the insurance company.
Cashless claim service allows the insured to access garages where they do not have to settle the bill beforehand for the damages covered by the policy. The insurance company settles the claim on behalf of the owner.
In case of the reimbursement claim service, you can choose to get your car repaired at a garage, which is not a part of the insurer’s network. All you need to do is submit the claim form along with the repair bill and the registration copy of the vehicle. Once this is done, you will get the claim amount directly transferred to your account.
You need to pay for the service centre to begin the claim process. Ensure that you fill out the forms and furnish all the necessary documents such as photocopies of your car insurance policy, the registration certificate, the receipt of your bills etc. to make sure the claim is settled favourably.
To file a claim with your car insurance company, you will need the following documents-
· A copy of your car’s registration certificate
· A duly signed claim form
· An estimate of the loss/damage sustained by the car
· A copy of an FIR in case of theft or an accidental damage
· A receipt of the repair bills
You will have to submit the repair invoice in case you opt for the cashless facility. Review the fine print of your car insurance policy to crosscheck and make sure that you have these documents.
The duration for which your car insurance policy will last depends on the type of tenure you choose while purchasing the policy. The insurance companies provide you with two types of plan- Short-term plan and Long-term plan.
· Short-term Plan
With the Short-term plan, your car insurance policy will be effective for one year. You will get the required coverage and enjoy the benefits under the insurance plan for a year. After the completion of one year, you will need to renew the policy to keep it active.
· Long-term Plan
If you opt for a Long-term plan, your car insurance policy will last for two or three years, depending on the policy tenure offered by your insurance company. You can avail all the benefits provided under the insurance plan for 2-3 years. The long-term plan needs to be renewed once in 2-3 years, and thus helps you evade annual premium hikes and service tax.
IDV stands for Insured Declared Value of the vehicle. The IDV comes into effect when you purchase a car insurance policy after using the vehicle for a few years. In such a case, IDV is known as the value for which the vehicle will be insured, depending on the listed selling price of the car and the depreciation of its parts over the years. IDV is the maximum sum, which you can claim from the insurance company in case of damage to the insured vehicle.
Compulsory Deductible is the amount that the policyholder has to pay while making a claim. Payment of compulsory deductible amount is mandatory. Suppose you meet with an accident and the repair amount accounts to Rs.5000, for instance. Based on the cubic capacity of the vehicle, you will have to pay a certain amount, say Rs.2000, as the compulsory deductible.
Renewing car insurance policy is quite easy. You can renew the policy by directly contacting your insurer by submitting the following documents-
· The registration certificate of the insured vehicle
· A copy of the previous insurance policy
Alternatively, you can also choose to go with the online renewal procedure. Follow these steps for a hassle-free renewal-
· Visit the website of your insurance company and log in with a valid username and password
· Select the mode of payment- debit/credit card, or through NEFT.
· Enter the details of your insurance policy- model of the bike, registration certificate, and previous policy details before making the transaction.
Yes. If you fail to renew your car insurance policy before its expiry, the policy will lapse and you will lose all the benefits that come with the same. This includes your No Claim Bonus too. In case you have missed your due date, you can still renew your lapsed car insurance policy online or offline.
If you have missed your due date, you can still renew your lapsed policy through both offline and online modes. Follow these steps for a hassle-free policy renewal-
· Log in to the insurance company’s website
· Enter all details of your car insurance plan. You will need a copy of your previous insurance plan and the registration certificate of your vehicle for this purpose.
· Make your payment using a debit/credit card or NEFT
· Once the transaction is complete, you will receive an email from the insurer confirming the renewal of the lapsed policy.
Alternately, you can visit your insurance company along with the necessary documents. The insurer will inspect the vehicle and review your documents before renewing the lapsed policy.