Saturday, 20 February 2016

9 Important Things You Might Not Know About Your Motor Insurance in India | Vehicle Insurance in India


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Motor Insurance or Vehicle Insurance covers an individual against theft, damage, bodily injury, third party liability etc. Traveling is a part of our life; we use certain types of vehicle to travel here and there; and probabilities of collisions increase, because thousands of vehicles run on road at a same time. If your vehicle hits an individual or his/her property; then that person may seek compensation, in such scenario, you have to pay for the loss caused by your vehicle. Here motor insurance comes into play; a motor insurance policy pays for damages and/or bodily injury you cause to another person in an accident. Some motor insurance policies (Comprehensive or Package motor insurance policies) also pay for the damages to insured vehicle due an accident. 

Motor Insurance

In this post, we will be discussing on some important things related to motor insurance or vehicle insurance policies for example; most of the dealers insist to buy motor insurance policy at the time of purchase; but, according to the guidelines of IRDA (Insurance Regulatory and Development Authority of India) customers have the right to buy motor insurance policies from any registered insurance company (See: List of General/Non-Life Insurance Companies in India). Scroll down to know more about motor insurance or vehicle insurance.

No Compulsion to Buy Vehicle Insurance from Vehicle Dealer: After purchasing a vehicle (car, motorcycle, commercial vehicle etc), your vehicle's dealer may ask you to buy a motor insurance policy. Ask him/her, which insurance company’s policy is he/she offering? You can buy motor insurance if you like that insurance company (offered by your vehicle dealer); otherwise, you have the right to buy a motor insurance from another insurer. Your vehicle dealer cannot insist you to buy a motor insurance; if he’s doing so then just call IRDA helpline numbers 155255 and 1800-4254-732 to seek help.

Liability Only Policy or Package Policy: According to Indian motor vehicle act, it is mandatory to have a liability insurance policy; which covers you against death, bodily injury, and damage to property accidentally caused to third party. However, if you seek extra cover for example; damage cover of own vehicle, then you may choose package policy or comprehensive motor insurance policy. Having a package policy would be beneficial because it provides a complete cover.(See: Motor Insurance India:  Types, Importance, Benefits of Motor Insurance in India)

Depreciations: Depreciation in motor insurance refers to the loss of value of the vehicle due to normal wear and tear or with time. It is crystal clear that every part of your vehicle subjects to normal wear and tear with time; therefore, at the time of claim your insurance company calculates the amount of depreciation to decide the claim amount to be paid. Here is an indicative depreciation chart for parts to be replaced:

Depreciation for
Percentage of Depreciation
For plastic parts, rubber, tire & tube, battery, air bags and nylon etc
50%
For parts made of glass
0%
For fiber glass components 
30%
Rate of Depreciation for all other parts
Age of vehicle
Percentage of Depreciation
Less than 6 months
5-7%
For 6 months but less than 1 year
15%
More than 1 year but less than 2 years
20%
More than 2 year but less than 3 years
30%
More than 3 year but less than 4 years
40%
More than 4 year but less than 5 years
50%


Buy Motor Insurance Online: You can buy online motor insurance for your vehicle. Nowadays, almost all insurance companies provide facility to buy motor insurance policies online for new vehicles or old vehicles. If you have bought a new vehicle then you can buy an online fresh motor insurance policy for your vehicle. Moreover, you can also renew your existing motor insurance.

Benefits of Timely Renews: Insurance companies give “no claim bonuses” to their customers; if no claim made during the preceding years. If policy holder renews his/her policy within the expiration period of the policy and makes no claim then he/she would entitled for no claim bonus. No claim bonus increases every policy year except policy holder submits a claim. No claim bonus for first year 20%, for second year 25%, for third year 35%, for fourth year 45%, for fifth year 50% (indicative only).

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Exclusions: Your insurance company shall not liable to pay you each and every claim. There are some predefined conditions and circumstances under which insurance companies do not pay any type of claim. Therefore, before purchasing a motor insurance policy see what does your policy cover and doesn’t cover? Exclusions are also applicable in Health insurance and Life Insurance.

Registration of Your Insurance Company: It is also very important to see company has registered with IRDA or not. Motor insurance comes under non-life insurance or general insurance; and presently, there are totally 28 registered general insurance companies in India (See: List of General/Non-Life Insurance Companies in India; Health, Home/Property, Auto, and Business Insurance Companies in India).

Compare:  Premiums for motor vehicle insurance vary companies to companies. Therefore, with the help of comparison you can find a worthy motor insurance at very cheap rates. There are plenty of insurance comparisons websites exist on internet; you can use them to find best and cheap insurance policy.

Right to Reject: Customers get “cooling off period” after purchasing a motor insurance policy. Usually, customers get 14 days cooling off period, during this period customers can cancel their policy and ask for refund of premium. Customers can also cancel their policy after certain types of charges if cooling off period expires; the maximum time to cancel a motor insurance policy varies companies to companies.
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