Car Insurance

IDV (insured declared value) is the maximum amount to be paid by an insurer at the time of a claim if the vehicle is a total loss or stolen. It is the sum insured and is fixed at the commencement of the policy period for each insured vehicle.  To know more about IDV click here.

Voluntary deductible is the minimum amount that you agree to pay at the time of claim. For instance, if your total claim amount is Rs 10,000 and you agree to pay Rs 5000 of your claim in addition to compulsory deductible, then it is called voluntary deductible.

Although law mandates insurance policy for 3rd party only but it is strongly advised to buy a comprehensive insurance policy that protects your vehicle from man-made or natural calamities. With comprehensive cover, you can claim from your insurer for accidents or damages caused to your vehicle. In the absence of comprehensive cover, you need to foot the entire bill on your own.

Thus, with comprehensive insurance policy on your side, you get complete peace of mind that whatever happens to your vehicle on the road, your insurance company will share your financial losses.

Car insurance companies give 50% discount on the own damage premium for handicapped people, provided the vehicle has been modified for their use.

Car insurance companies offer a discount on the premium for installing anti-theft devices approved by

Automobile Research Association of India/ARAI. It enhances the security and reduces the chances of making the claim and for this reason, discount is provided on the premium.

Total loss means accidental damage to a vehicle where insurance company’s share is more than 75% of the IDV.

If you have LPG or CNG fitted in your, you have to get it endorsed in your Registration book or RC.  Then, inform your insurer about the change to get it endorsed in your car insurance policy. As the cost of premium will differ basis on the fuel type of your car.

Break in renewal policy is one of the simplest options available in the market to renew your lapsed policy. It means you can renew your expired policy without any inspection and documentation. It is not only hassle free but also a great money saver technique.

A compulsory excess is an amount that your four wheeler insurance company has decided that you will pay at the time of claim settlement. The amount varies on the basis of cubic capacity of the vehicle. For sub 1500 cc vehicles, it is Rs 1000, for vehicles above 1500CC it is Rs 2000.

The value of a car depreciates with time and its parts also wear out with time.  While calculating the IDV the depreciation on parts is calculated as mentioned in the table below:

For any change in registration address or vehicle information, you need to submit RC copy along with a request letter. Any change will be done by an endorsement by the insurance company. For some endorsements, a policyholder may need to pay additional premium.

You may need to submit duly filled claim form along with following documents-

A copy of the vehicle’s registration number A copy of the driving license of the person driving the vehicle at the time of an accident along with the copy of the driving license of the person in whose name the RC and insurance is. Estimate repair cost A copy of FIR in case of theft or third party personal injury, death or property damage

If the insurance company’s share is more than 75% of IDV, it is called total loss. You may need to submit additional documents to initiate claim proceedings at the time of total loss-

RTO transfer paper Original RC copy Vehicle’s original keys No objection certificate from insured for the transfer of a vehicle

Letter of indemnity on judicial stamp paper

Car insurance policy doesn’t offer coverage in following situations-

Normal wear and tear Loss or damage caused to the vehicle due to depreciation Electrical and mechanical breakdown of a vehicle Any accident outside the geographical location Driving without a license If a person is driving under the intoxication of drug/drugs Vehicle not being used for purpose mentioned in the document.

Damage caused due to nuclear fission, war invasion

According to Motor Vehicle Act, it is mandatory that every motor vehicle plying on the road should be insured with ‘liability only cover’. It ensures that any damage done by your vehicle to another person’s property will be covered in a claim. By buying motor insurance, you can protect your vehicle from natural disasters or theft. When an insurance policy is giving you ample benefits and coverage, we don’t find any reason of not buying it.

Hypothecation is used for creating charges against the security of movable assets. The possession of goods remains with borrower. For instance, in car loan, vehicle remains with the borrower but the ownership is hypothecated to the bank. It means bank has a right to sell the vehicle if there is any default in repaying car loan.

To add hypothecation in car insurance policy: Letter from the bank or financer/endorsed RC copy has to be submitted at the office of insurance company. To delete hypothecation in motor insurance policy: No objection certificate (NOC)/endorsed RC copy has to be submitted at the office of insurance company.

In case of a hypothecated vehicle, it is important to obtain NOC from the financer if the payment has to be obtained by the insured. Otherwise claim amount will be paid to the financer for losses other than theft.

Yes, it will be applicable in India. However, the policy must be issued by a reputed foreign insurance company and a proof of the same is required to submit with the new insurance company.

Your comprehensive insurance policy covers-

• Liability to third party
• Accident by external means
• Fire, explosion, self ignition, lighting
• Riots, strikes, terrorism, malicious acts
• Earthquake, flood, storm, landslide
• Transit by rail, road, waterways, air or lift
• Burglary, theft or housebreaking

You will be entitled to get NCB on expired policy if you will renew it within 90 days of the expiration.

Cashless facility means you don’t need to pay anything for repair work and your insurance company will directly pay it to the garage. If you have signed up for the cashless facility, all you have to do is take your vehicle to the preferred workshop of the insurance company. The workshop will contact the insurer and settle the claim.

You should immediately inform the insurance company. If you don’t know the contact number then you should search for the local office of the company. If there is a local office then intimate the claim to the company. If somehow you are unable to contact the company or trace its local office, you should click pictures of the accident spot and vehicle. If the loss is major and involves third party damage, lodge FIR immediately.

You are required to submit a renewal notice from your previous insurer. If this doesn’t state your (NCB) entitlement or if it is not given to you by the company then call your insurer and request confirmation of your (NCB). Alternatively, you can submit your previous insurance papers and declaration that you are entitled to receive (NCB). However, if you are not eligible for NCB and wrongly claimed for it then the insurance contract is void ab initio and the insurance company reserves all rights to reject your claim.

An IDV is calculated on the basis of the manufacturer’s listed selling price of the brand and model, which will include local duties/taxes, excluding registration and insurance.

 Different depreciation slabs for arriving at IDV are detailed below:

For those vehicles which are obsolete or aged over 5 years, the depreciation applied varies from one insurer to another.

No claim bonus (NCB) is a discount in premium offered by insurance companies if the owner of a vehicle has not made a single claim throughout the motor insurance policy term.

An endorsement is a written proof of an agreed change to a policy wording. If a customer wants to make any changes to the policy, he needs to approach the insurance company to make it effective. This is done by an endorsement.

Insurance company may also issue an endorsement at the time of policy issuance to provide additional coverage or to impose restrictions. An endorsement may also be issued subsequently to record changes like change in name, address, etc.

Below are some common types of endorsements issued by an insurance company along with documents required for them.

Yes, your place of residence affects premium rates. The Indian Motor Tariff Act has categorized cities into different zones and each zone has different premium rates. Below is the zone-wise categorization for vehicles:

1. Zone A= Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune
2. Zone B= Rest of the country

If your residence falls in Zone A then you need to shell out more bucks to buy insurance.

The costs that you have to bear are salvage value, depreciation cost, compulsory deductibles and cost of consumables. Let’s know more about these costs-

1. Salvage value= It is the estimated residual value of an asset at the end of its useful life.
2. Depreciation cost= It is a loss in value of an item over the period of time.
3. Compulsory deductibles= It is the amount which a policyholder needs to pay upfront at the time of claim. The remaining expenses will be borne by the insurer.

Cost of consumables= It includes items like lubricants, grease, engine oil, fuel filter, break oil, nut, bolts, screws, washers, etc.

A cover note is a temporary insurance proof which is issued to a policyholder before the issuance of actual insurance document. A cover note is valid for 60 days from the date of its issuance and is replaced by an original insurance document.

Legally, anyone driving a vehicle should hold a valid driving license for that category. As the owner, it’s your responsibility to ensure that those with a valid driving license are driving your vehicle. Also ensure that no one (including you) drives the vehicle under the influence of alcohol or drugs. If the driver is intoxicated at the time of an accident then insurance company is not liable to compensate the policyholder.

No, a car insurance claim needs to be lodged immediately with the insurance company and will not be payable if it is delayed beyond a reasonable time period.

A motor insurance is purchased for cars, trucks, motorcycles and commercial road vehicles. It is an agreement between the insurer and insured, wherein insurer agrees to give financial coverage to the vehicle and the insured in return agrees to pay premium annually.

No, Insurance Act 1938 does not allow you to pay premium for the auto insurance in installments. If you buy online, you can use credit card to make the entire payment and then payback it to the credit card company in installments.

For buying a policy online no documentation is required whatsoever. However, it is advisable to keep the previous insurance policy and RC handy at the time of buying the policy so that all information can be updated correctly in the policy form.

No single policy is the most economical for everyone. Different people can find different insurance policies economical depending on the coverage and the add-on covers. You should compare the coverage and the premium quoted by different insurance providers to find out the most affordable plan for you.

The process of renewing your car insurance policy is very simple. Follow the steps given below to renew your policy online from the same insurer:

1. Visit the official website of the insurance company

2. Go to the option of renewing the policy

3. Enter your policy number or other details required

4. Pay your premium amount

5. Download the policy document

You can also renew your car insurance from another insurance provider if you do not want to continue with the same plan.

The policyholder should renew his car insurance before the expiry of his existing policy. This will ensure that there is no break in policy and you can continue to avail benefits such as no claim bonus.

Zero DEP refers to Zero depreciation Cover in car insurance. It is an add-on cover that allows the policyholder to get compensation up to the insured declared value (IDV) or current market value of the car without taking depreciation into account. You need to pay an extra premium amount to avail benefits of zero DEP in your car insurance polic

The limit to filing a claim for car insurance per year varies from one insurance provider to another. Most insurance companies allow multiple claims in a year until the IDV is not exhausted. You should check your policy document to know the exact number of times you can claim your car insurance policy in a year.

Bumper to bumper car insurance refers to the insurance policy that provides complete protection to the insured car without considering depreciation of its parts. In other words, this type of car insurance allows the policyholder to obtain compensation up to the market value of the car in case of damage or loss to the car. However, it attracts about 20% higher premiums than your regular car insurance policies.

You can claim insurance for car scratches. However, it is advisable to all policyholders to avoid filing a claim for minor scratches. This is because you will have to pay a fixed deductible that may cover a major portion of the claim compensation resulting in you incurring a loss. Moreover, by filing a claim, you will lose out on the No Claim Bonus amount, which you could have availed at the time of policy renewal.

Yes. Almost all insurance companies allow policyholders to renew their car insurance policies online. You can do so by visiting the official website of the company and paying for the premium online.

In case there has been a break in your car insurance policy, you can renew it by following the steps given below:

1. Visit online aggregators to compare the coverage and premium quotes offered by different insurance plans

2. Select the car insurance plan you want to buy

3. Schedule the earliest appointment for car survey with the insurance company

4. A vehicle survey will be conducted by a representative of the insurance company

5. Once the surveyor has give a go-ahead, buy an insurance policy within 24-48 hours, depending on the insurance company

6. Download your policy document

After you have initiated an online request for inspection, a surveyor will visit to inspect the car within 48 hours. After the surveyor makes a recommendation in your favour, you will have to buy a car insurance policy within 24-48 hours.

NCB or No Claim Bonus can be transferred from one car to another if the policyholder is the same person. It can also be transferred from one insurance provider to another. However, you cannot transfer NCB from one policyholder to another even if the car is sold to someone else. This is because NCB is a reward granted to the policyholder for being a mindful & cautious driver and not the car.

In case you change your job or city, your car insurance remains to stay valid without being affected. However, you need to get your personal details such as address changed in your policy document for which you need to get in touch with your insurer.

‘Legal liability of the paid driver’ means that the policyholder has hired a driver to drive his car and the insurer will provide compensation if the driver gets injured or dies in an accident while driving the car.

You need to file a police complaint if someone gets injured or loses life in a car accident. The complaint should also be lodged if the insured car gets stolen.

If you sell your car, you need to transfer the car insurance policy on the name of the new owner. Follow the steps given below to transfer the insurance to the new owner:

1. You need to get a sale affidavit made with details of the transfer, details of the new owner and details of payment. It should be notarized and signed.

2. Fill up the RTO transfer forms and obtain a clearance certificate from your Regional Transport Office (RTO).

3. Fill up the new proposal form

4. Attach the documents listed above

5. Submit it to your insurer

6. The policy will be transferred within 14 days