Be an Empowered Consumer: Learn Everything about Car Insurance

March 19, 2018 Simon Hopes | Comments Off

No it’s not Christmas or Diwali. It’s the day your new car has arrived! You go through an emotional roller-coaster thinking right from going to different places, to taking a very good care of your new beauty, and deciding about the car insurance plan that would best protect you and your car!

Remember, insurance is mandatory for every vehicle running on Indian roads. But how many of us actually read all the clauses in the policy document once purchased?

Having absolute knowledge about the policy will help you settle your claims easily.

Are you choosing the Best Insurance Plan for your Car?

The most important element to consider while choosing car insurance is the coverage that you are being offered during a mishap or an incident. If you own a brand new car, it is always advisable to buy a Zero Depreciation policy in order to cover it from all types of damages. The premium of this add-on is relatively higher than a standard insurance policy. This type of policy however does not cover wear and tear, damage due to mechanical breakdown or damages to accessories, fuel kit, tyres etc.

Save your bucks – No Claim Bonus 

A no claim bonus (NCB), as the term implies, is the reward given by the insurance company  to the insured for not making a claim in the preceding years. It is a discount available only at the time of renewal of a policy. The NCB gets accumulated each year. The discounts ranges from 20% to 50% on the premium payable. If you don’t make a claim in a year, you earn a good 20% no claim bonus on the first renewal of your car insurance policy. This discount increases gradually with every claim free year up to a maximum of 50% at the end of 5 years.

Inclusions

You don’t have to get worried about when to expect a compensation during a mishap. Your policy document transparently mentions the situations under which you are eligible to claim for a loss or damage.

Exclusions

Car Insurance policies do not provide coverage in the below mentioned circumstances. However it may vary from one insurance company to another:

  • Damage by a person driving without a valid license
  • Damage by a person driving under the influence of alcohol or drugs
  • Damage occurred due to war
  • Damage due to general ageing, wear and tear and depreciation
  • Damage due to mechanical or electrical breakdown

Compulsory Deductible

In India, as per the IRDAI, a certain amount has to be paid compulsorily by the insured whenever any claim arises. However the level of compulsory deductible has no effect on the premium. The latter is calculated basis IDV, make and model and depreciation of your car.

Voluntary Deductible

This is a type of deductible chosen by the insured before he burns a hole to his pocket during an event or when a claim arises. This is not compulsory and is upon the will and wish of the insured whether to go for this type of deductible or not. The level of voluntary deductible however reduces the premium amount.

Cashless Insurance

In a layman’s language, cashless car insurance means you do not have to shell out money from your pocket when a claim arises. This facility is available in network garages only and the payment is settled directly by the insurance company You can ask the customer support staff of the insurance company or simply check online the list of the network garages.

Claim registration process

Immediately contact your insurance company on the toll free number mentioned on the policy document to register a claim in case your car meets with an accident or gets stolen, vandalized or damaged due to fire or storm. You may also call the Online Insurance portal companies like Coverfox in case you have purchased one from them. Be curious and ask a lot of questions because it’s a matter of concern when it comes to claim settlement. At the same time give all the required information about the incident. You may need to lodge an FIR depending in case of theft. You can review the process for registering the claim in the policy document.

Terms and Conditions for Cancellation of the policy

There might be  several occasions where you may decide to cancel your car insurance policy. For example: you might be unhappy with the services of your current insurer or a sudden change in your life like death etc. All that you need to do is inform your insurance company about the same. After submitting the required documents like a letter of cancellation, policy details etc., and your insurer can cancel the policy issued. However, in case you care planning to continue driving your car, do get a new policy from the insurer of your choice immediately.

So take some time to read your policy document, educate yourself and be prepared enough for hassle free claim settlement in future.