I) Types of vehicle insurance
Generally plans offered by general insurance providers can be broadly classified under threecategories:-
a) Third Party Car Insurance covers you against any legal liability to a third party resulting when you are at-fault driver. It covers damage/injury caused by you to another person/property. A Third Party Liability cover is legally mandatory in India under the Motor Vehicles Act.
b) Collision Coverage protects the insured financially against damage to his/her own car. It pays the insured for damage caused by collision. Damage/loss due to theft or vandalism is not included in collision coverage.
c) A comprehensive package car insurance policy is more extensive and
preferred by most people. The coverage includes damage or theft of vehicle, third party legal liability and personal accident cover. The policy coverage can be
further extended by opting for add-ons like accessories cover, engine protector, zero depreciation cover, medical expenses, etc.
II) Tips to reduce the cost of your vehicle insurance
a) Voluntary deductibles: Deductibles or excesses are the amounts over and above which a claim is payable by insurance provider. If you are willing to settle petty claims for small damages from your pocket voluntarily, then the cost of premium for vehicle insurance can be reduced approximately by thirty per cent.
b) No claim bonus
You can reduce the premium payout by nearly fifty per cent every year, if you don't claim insurance on your vehicle. Insurance companies give the benefit of no claim bonus as record of your good driving year after year. If you sell your vehicle, this no-claim bonus can be transferred to your new insurance policy for the new vehicle and avail lower premium payout.
c) Discount for security features
Few cars come with enhanced security systems which are built-in such as anti-theft alarms and immobilizers. There is low probability of theft of such cars. These cars can be insured for less premium. However, only Automotive Research Association of India (ARAI) approved devices will attract a 2.5 per cent discount on your premium.
d) Safety gears: If you have a brand new car with state-of-the-art technology that is fitted with all kinds of safety gadgets such as air bags, anti-lock brakes and theft alarm system; in effect your car is considered to be safe from harm especially from theft and burglary. Such features of your car help in reducing your car premium to a certain level.
e) Chose coverage carefully: Usually car insurance policy is a pre-defined set of benefits with hardly any room for maneuver. However, if your policy allows you must certainly opt-out of such features which you would not ideally need. This will help you in lowering your insurance premium to a certain degree.
f) Avail discounts: You may avail discounts based on your age, a clean and good driving record, good academic record and in some cases discount on account of your profession. A small discount to the tune of 5% is generally allowed if you meet the criterion laid down by the provider.
g) Loyalty reward: If you already own an insurance policy of any kind and go back to same provider for your car insurance needs then you will be favored upon by the insurance provider. Buying multiple policies from the same insurance provider calls for loyalty reward which helps in lowering your car insurance premium.
III) Add-ons that increase the premium but are useful
a) Nil-depreciation insurance
A nil depreciation policy covers for complete claim for rubber and plastic parts. Generally an insurance company will pay only for fifty per cent of value for these parts that are subjected to wear and tear. With most cars having features with plastic and rubber parts it is advisable to go for nil depreciation policy, although the premium would be increased. In case of a claim it can knock a lot off amount in a repair bill.
b) Personnel cover
A normal comprehensive insurance cover will include personal accident coverage for the owner of the car. For a small fee, additional users who possess a valid driving license and are using the car can also be covered under the insurance policy. By default, most companies include this cover in their comprehensive insurance policies.
c) Repair of glass,rubber and plastic parts
d) Loss of personal belongings
e) Emergency Transport and Hotel Expenses
f) Key Replacement
g) Engine Secure
h) Consumable Expenses
I) Daily Allowance
j) Return to invoice
IV) What is not covered in Car Insurance?
Loss or damage if a policy is not in force
Gradual wear and tear of car and its parts
Loss or damage to vehicle when driven by person without valid driving license
Loss or damage to vehicle as a result of intoxication due to drugs, alcohol etc.
Loss or damage to engine as a result of oil leakage
Loss or damage to vehicle as a result of abuse of car manufacturer’s guidelines
FAQs:-
Mahindra First Choice
Royal Sundaram
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