Gone are the days when you have insurance policies only for health and life, today when you have so many valuable assets, there are insurance policies for everything. From car to home to business, you have the insurance policies for everything. In this article, we are going to discuss some of the common questions that one has related to general insurance.

Question 1: What is General Insurance?

Answer: Insurance plans that do not come under life insurance are known as ‘General Insurance’. In other words, a general insurance policy helps you to protect you and your valuable items. Below mentioned are the different forms of general insurance plans offered by most of the general insurance providers:

• Motor Insurance
• Marine Insurance
• Home Insurance
• Health Insurance
• Travel Insurance
• Commercial Insurance

Question 2: How secure is to buy an insurance plan online?

Answer: The insurance providers such as National General Insurance Company have secure payment gateways and they assure the safety of your personal information. So, it is completely safe and secure to buy an insurance plan online.

Question 3: How to make a claim for an insurance plan?

Answer: You can register the claim for your insurance policy in two ways:

• Cashless Claims: A cashless claim is one wherein the bill for your services taken are directly settled between the insurance provider and your service provider. For example, if you are availing the cashless benefit of your health insurance policy, then you the bills will be settled between the hospital and TPA. In the case of car insurance, the garage and insurance provider settles the bill. However, you have to provide certain information or documents to the insurance provider for releasing the claim.
• Reimbursement Claims: In this type of claim, you have to settle the bill with the service provider (can be hospital or garage) and ask for reimbursement by sending all the original bills and other required documents to the insurance provider. For example, if you have to get the reimbursement of your hospitalization expenses, then you have to provide the claim form with discharge summary, doctor’s prescription, and other required reports to your insurance provider. The insurance provider investigates these documents and then reverts with the decision of claim settlement.

Question 4: How insurance premiums are calculated?

Answer: Different factors affect the premiums of different insurance plans.

• Two Wheeler Insurance Premium Calculator: The premium of insurance of your two-wheeler depends on its Insured Declared Value (IDV). The IDV depends on the ex-showroom price of your vehicle, its depreciation, its cubic capacity (in case of third-party insurance), and zone of the registration. The below table gives a clear understanding of the IDV of two-wheelers:

Age of the Two-Wheeler	IDV
Between Zero to Six Months	95% of the Ex-Showroom Price
Between Six Months to One Year	85% of the Ex-Showroom Price
Between One Year to Two Years	80% of the Ex-Showroom Price
Between Two Years to Three Years	70% of the Ex-Showroom Price
Between Three Years to Four Years	60% of the Ex-Showroom Price
Between Four Years to Five Years	50% of the Ex-Showroom Price

It is the IRDAI that decides the third-party insurance premium of the two-wheelers. Below mentioned are the current rates of the premium as per the cubic capacity of the vehicle:

Cubic Capacity of Your Two-Wheeler	Premiums (Rs.)
Not exceeding 75CC	Rs.569
Greater than 75CC and less than 150CC	Rs.720
Greater than 150CC and less than 350CC	Rs.887
Greater than 350CC	Rs.1,019

• Car Insurance Premium Calculator: It is a versatile tool to find out the quotes of different car insurance plans in India. The generic formula to calculate the premium of car insurance policies in India is:

Own damage premium – (depreciation + No Claim Bonus) + Liability Premium

Most of the insurance companies like National General Insurance use this formula to calculate the premium. And in this way it depends on the following factors:

• IDV
• Year of manufacturing
• Cubic capacity
• Geographical location
• No Claim Bonus (NCB)

Note: The cars that are new have the maximum IDV but with time due to depreciation it gradually lowers down. Below mentioned are the rates of depreciation as per the Motor Vehicle Act:

The Age of Your Car	Depreciation (%)
Up to Six Months	5%
Six Months to One Year	15%
Between One to Two Years	20%
Between Two to Three Years	30%
Between Three to Four Years	40%
Between Four to Five Years	50%

• Health Insurance Premium Calculator: The premium of health insurance depends upon many factors. Below mentioned are some of the common factors that are considered while deciding the premium of your health insurance policy:
• The Cost of Marketing and Management: The advertisement and marketing costs come under this category. Sometimes the commission of the insurance agent also comes under this.
• Cost of Medical Underwriting: To refrain the losses that insurance company may suffer from, the process of medical underwriting comes in the picture. This is why the insurance products are always underwritten. This is done in order to maintain the balance between the group insurance plans and individual insurance policies.
• Personal History: Your personal history like age, smoking, drugs, and alcohol are taken into consideration while calculating the premium of your insurance plan.
• Mortality: The insurance company bears the cost of uncertainties if it occurs to the insured. However, the mortality amount varies depending upon the income and age of the insured.

The insurance calculators such as National Insurance Premium Calculator also follow these guidelines while deciding the premium of its various insurance plans.

Question 5: What is No Claim Bonus insurance?

The ‘No Claim Bonus’ is also referred to as NCB. The insurance company gives the NCB to the policyholders for not making any claim in the previous year. This is a kind of reward that is given as a discount over the payable premiums and ranges from 20% to 50%. So, if you have not made any claim in your previous policy year, you can claim the NCB while renewing your policy. The below-mentioned chart will give you a clear understanding of the NCB rate that is given to you:

Claim Free Year	No Claim Bonus (Percent)
After One Claim Free Year	20 Percent
After Two Consecutive Claim Free Years	25 Percent
After Three Consecutive Claim Free Years	35 Percent
After Four Consecutive Claim Free Years	45 Percent
After Five Consecutive Claim Free Years	50 Percent

In this way from first to five years, you can gradually improve the percentage of your No Claim Bonus and get the discount of up to 50% at the end of your fifth claim free year.

The NCB or No Claim Bonus is given to the policyholder instead of a car. Therefore, you can retain the No Claim Bonus, even if you sell your car and purchase a new one. Moreover, if you want to switch to another insurance provider then also you can retain the benefits of No Claim Bonus at the time of the renewal of the policy.  

Question 6: What is Insured Declared Value (IDV)?

Answer: The Insured Declared Value (IDV) is the value of sum assured provided by the vehicle insurance policy. The IDV is calculated on the basis of manufacturer’s pre-defined price list for a particular vehicle and the current selling price of the vehicle with its percentage of depreciation as mentioned in the rate list. In other words, the IDV is the maximum sum insured given to the policyholder on behalf of loss, theft, complete damage to the vehicle by the insurance provider.

In this way, the IDV depends upon the age, brand, and make of your vehicle and hence it decreases every year while renewing the insurance of your vehicle. The industry that regulates the insurance industry in India (Insurance Regulatory and Development Authority (IRDAI)) has defined the IDV of the vehicle as 95% of the ex-showroom price. With an improvement in the vehicle's age, its depreciation also increases. Therefore, the IDV of a new vehicle is high and it goes down with every passing year.

Age of the Vehicle	IDV
Between Zero to Six Months	95% of the Ex-Showroom Price
Between Six Months to One Year	85% of the Ex-Showroom Price
Between One Year to Two Years	80% of the Ex-Showroom Price
Between Two Years to Three Years	70% of the Ex-Showroom Price
Between Three Years to Four Years	60% of the Ex-Showroom Price
Between Four Years to Five Years	50% of the Ex-Showroom Price

Question 7: What is Zero Dep insurance?

Answer: The vehicle owners these days prefer the ‘Zero Dep’ insurance policies in India. As per ‘zero dep’ policy, the policyholder gets the complete claim without any deductions for the depreciation of replaced parts of the vehicle. This as well covers the cost of repairing of the glass, plastic, rubber parts, and fiber. In standard vehicle insurance policy, the rate of depreciation depends on the % of IDV ranging from 0 to 50%, and it also depends on the age and makes of the vehicle. This makes you pay money from your pocket while making a claim. However, if you have taken a zero dep insurance plan, you will not be charged any depreciation and 100% reimbursement is given by the insurance provider that leads to maximum benefits. Zero dep insurance is advantageous for new cars as well as cars up to the age of five years. Even though the premium of zero dep insurance policy is slightly higher than normal insurance covers, but there is no cap on the number of claims that you can make during the entire term of a policy. However, normal breakdowns and wears and tears are not covered in a zero dep insurance policy.

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