BEGINNER’S GUIDE TO MOTOR INSURANCE - Make Money Online

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BEGINNER’S GUIDE TO MOTOR INSURANCE

In India, motor insurance generally includes insurance for cars, bikes and other commercial vehicles that ply on the roads. Insuring your vehicle protects you from financial burden to bear the loss/damages that may arise due to accident or vehicle theft. Motor insurance also covers your legal liability against any damages or loss caused to third party and this particular coverage is mandatory by law. Click here to know more about Motor Insurance


Vehicle is a valuable asset and most of us have emotional value attached to it. This is the reason why you think of insuring your car as soon as you purchase it. However, there are few basic things one must know before buying to make a good decision.Here is a guide for newbie’s to know the basics of insuring their priced possession:

What does it cover?

Mainly, there are two types of car insurance offered to the customers with the different range of coverage.

  • Third Party Liability Insurance: It’s a traditional and ground level policy that covers the damages or losses caused to third party property, injury and death of third person in case of an accident where you are proved to be at fault. Indian law requires you to compulsorily have this coverage as a protection against any damage or loss you might cause to third party. This could provide you financial relief only if you are found to be at fault in an accident. However, this policy does not offer any coverage for your vehicle. As it offers only limited coverage, it’s quite inexpensive.
  • Comprehensive Insurance: It’s a complete package that covers almost all the insured events. It covers both third party liability and own damage. That means, it provides a generic coverage for the legal liabilities against third party, damage or loss to your own vehicle due to accident, theft or any other reason. It protects your vehicle from any loss or damages due to man-made reasons and natural reasons. It also extends personal accidental coverage to owner driver. This type of policies is relatively high on premium when compared to standalone third party policies. 

Car insurance policies can be purchased via both offline and online mode. 

What does it not cover?

  • Wear and tear 
  • Depreciation 
  • Electrical or mechanical breakdown 
  • Damages caused while driving under the influence of alcohol or drugs
  • Damages caused while driving without a valid driving license
  • Deliberately caused damages

However, some of the exclusions like wear and tear, depreciation and mechanical breakdowns can be included to the main policy by way of riders like depreciation cover, engine protector etc. It’s important to note that riders can be added to main policy at an extra cost.

What factors affect your Insurance price?

Price or premium that you pay for comprehensive policy depends on many things like your IDV (insured declared value) of your car, engine type, car model and make, manufacturer, year of manufacturing, locality of registration, your occupation, age and credit score etc. 

Important Insurance Jargons

  • Insured Declared Value (IDV): It’s the current market value of your car post depreciation (if applicable). The value declared will be deemed to be the amount of sum insured in your car insurance. Its calculated based on the manufacturers listed selling price for the model.
  • No Claim Bonus: It’s a benefit offered to customers for not making any claim during the policy period. The benefit ranges from 20% at the end of the first year of policy to 50% at the end of fifth year. You premium reduces accordingly for each claim free record. 
  • Compulsory and Voluntary Deductibles: You being the car owner are expected to bear some nominal portion of the claim which is termed as compulsory deductibles. In order to reduce the premium, you can go for higher portion of deductibles voluntarily which is called co-pay or voluntary deductible.

Tips to finalize the Best Deal

  • Spend some time on research and shop around 
  • Compare policies from various insurers 
  • Make use of online tools and platform to compare on various parameters 
  • Make correct declaration. Your insurance costs are determined basis them 
  • Read and understand the fine prints carefully 
  • Renew on time to not lose on any benefits

Conclusion

To conclude, it’s important to have the basic understanding of insurance product that you are buying and its significance to make the right choice. It’s always advisable to have comprehensive coverage to enjoy a stress-free ride!
BEGINNER’S GUIDE TO MOTOR INSURANCE BEGINNER’S GUIDE TO MOTOR INSURANCE Reviewed by Parvesh Bravo on 9:39 AM Rating: 5

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