Despite the fact that Car Insurance Policy has been mandatory in India for quite some time, more than one third of the cars plying in India do not even have the mandatory Third Party Insurance coverage, according to an analysis by Insurance Companies. Worse still, many cars have been found carrying fake insurance papers or old Insurance papers only for the regulatory norms.
Thus, many genuine claimants of third party liability does not get adequate claim because more than 30% to 35% of the four-wheelers and 70% of two-wheelers in India do not have a valid Motor Insurance Policies, especially in smaller cities and towns. Also since third party liability Motor Insurance Policies are not heavily incentivised, agents are not motivated to sell or renew for that matter!
Even though only the third party liability Car Insurance is mandatory in India, most car owners opt for a comprehensive one so as to protect themselves from the unprecedented damage on Indian roads.
Points to keep in mind while shopping for your Car Insurance Renewal Policy:
There are certain must knows of Car Insurance Policy Renewals, that must be kept in mind. Mind you, I mentioned Renewals because the first policy is usually purchased from the car dealer and hardly any thought goes into the same. It is only from the first renewal that it makes sense to analyse the need and then purchase the policy. Thus it makes sense to choose the best policy that suits your needs keeping the following points in mind:
- Type of Plan: You need to decide whether you need a Comprehensive Car Insurance Policy or a standalone Third Party Liability Insurance.
Third Party Liability Motor Insurance Policy is a mandatory Car Insurance Policy which covers injuries caused to other people in an accident but not damage to property or vehicle. A Comprehensive Car Insurance Policy covers self vehicle damage as well.
- Add ons features: There are quite a few riders or additional benefits that are available with standard Car Insurance policies and some of them are very helpful like:
- Zero Depreciation cover: This is almost a must-have rider for a Car Insurance policy especially for higher end cars where the depreciation amount would be much higher than the additional premium payable.
- Hydrostatic Cover: which covers consequential loss due to water logging
- Cashless Facility at the Affiliated Garage: Check with your favourite garage for which insurance company they have a tie up for cashless claims so that cashless claims can be easily settled rather than running around for reimbursement!
- Insured Declared Value or IDV: Insured Declared Value is the basic amount which is fixed by the insurer for that year’s current market value of the vehicle which is provided in case the vehicle is stolen or total loss of vehicle.
- Compulsory and Voluntary Deductibles: Is the basic minimum amount that needs to be paid for each and every claim. For example it is Rs 1000 or Rs 2000 which is the minimum guaranteed amount you would have to pay to make each and every claim. Including deductibles usually reduce premium so that fake or small claims are avoided or at least reduced
- No Claim Bonus or NCB: Is an additional coverage that is provided to the policies which does not claim for an entire year. So, if you have not claimed in your motor insurance policy for one whole year, about 5-10% of the IDV is given as a bonus on renewal. So, on renewal, NCB needs to be checked that it has been accurately calculated especially if there has been no claim in the previous year and NCB needs to be carried forward. NCB can accumulate upto a maximum of 50%.
- Renewal Quote: The renewal quote can vary due to variable quotations based on:
- IDV (Insured declared value): The basic value of the car depends on the IDV
- Additional riders as chosen or omitted
- Deductibles: compulsory or voluntary depending upon the type of plan
- No Claim Bonus: Which is carried forward
- Other Features and Benefits
- Portability: Motor Insurance policies are completely portable from one insurer to another with all benefits continued and hence when you port any policy to a new insurer, you need to check that all benefits have been duly continued, like No Claim Bonus, accurate IDV, etc.
- Claim Procedure: The most important aspect of a “good” motor insurance policy would be easy and efficient claim procedure and hence knowing the same and being aware is a very important factor while shopping for your car insurance renewal policy.
- Compare Quotes Online: Last but not the least, while shopping for the car insurance policy renewal, it makes most sense to fill in your requirements and get a few quotes and then compare the same based on the best price benefit. This way, you will not only get quotes, but also be able to compare the same and choose the best plan that suits your needs and also your budget!
Happy shopping for your Car Insurance Policy!
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