10 Things You Never Knew Car Insurance Covered

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Car owners sign up for or renew their car insurance policies, sometimes without being aware of numerous important things the insurance policy covers. Not all of us take the trouble to read the policy document, due to which we miss out on significant benefits covered in the policy.

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      For instance, many car owners are unaware that being a member of the Automobile Research Association of India (ARAI) entitles them to a discount on the car insurance premium.

      Listed below are some other commonly missed out aspects in a car insurance policy:

      1. Beyond Just Accidents Cover

      Contrary to popular belief, car insurance covers more than just damage or losses caused by accidents. Damage/losses brought about by events beyond one’s control are covered too. This includes natural calamities like floods, earthquakes, lightning, landslides, etc., and man made disasters like theft, riots, burglary, damage during transit, terrorist acts, etc.

      2. Towing Fee Waiver

      Driving at odd hours of the day, especially on highways or remote areas, involves the inconvenience of not being able to locate garages/mechanics, in case of a mishap. Even if you do manage to find help, your situation of being stranded becomes the basis for mechanics charging exorbitant amounts to tow the vehicle to the garage.

      What you may be unaware of is that if your car gets into an accident, you can claim towing charges up to a certain limit, under your basic cover. With each annual policy renewal, this cover gets renewed as well. No matter how many times you need you car towed in a year, the policy covers it. For instance, if you have an INR 1,500 towing cover - whether you pay all of it for a one-time tow, or pay INR 100 each for 15 tows, your car insurance policy will have it covered.

      3. Document-Free Renewal

      In our country, most processes involving documentation become lengthy, cumbersome and time-consuming. However, you can easily renew your car insurance policy online without having to fill any complicated forms. Online policy renewal is a quicker, simpler, cheaper, and more accessible option, involving zero documentation. With various online payment modes available, online policy renewal can happen within minutes, in just a few clicks.

      4. Discounts on Third Party Premium

      Third party premium is a comprehensive cover that compensates for claims made towards third-party damages that may occur to a property or person (injury/death) in case of an accident. In such a situation, your car insurance policy can help you pay for the losses/damages to the third party. Every car insurance policy comes inclusive of a third-party cover and an Own Damage cover too (cover to guard your own car).

      However, if you are confident that you can avert such third-party-claim-situations, or that you can manage paying smaller damages out-of-pocket, you could request your third-party coverage limit to be lowered - this will fetch you a discount on the premium you need to pay towards third party cover.

      5. Car Accessories Insurance

      In case of accidents/damages, the basic car insurance cover only applies to the car and not the accessories fitted in the car. However, you can have your car accessories insured by opting for separate add-ons specifically for the accessories. Although this may push up the premium to some extent (based on what exactly you take cover for), it would still be a lot more cost-effective than buying new accessories in case they are damaged/lost due to an accident.

      6. 24/7 Spot Assistance

      24/7 Spot Assistance comes to your aid if your car is stranded in the middle of nowhere. This add-on includes cover for important facilities like car towing, taxi arrangement, fuel/legal assistance, etc.

      7. Zero Depreciation cover

      In car insurance, depreciation is calculated as the rate at which the values of car parts depreciate as the vehicle ages. At the time of a claim, insurance companies apply the depreciation rate to compute the amount that would be payable for the damaged part –the difference between the depreciated part’s value and the market cost of the new part needs to be borne by the insured. However, by taking the zero depreciation add-on cover, car owners can get comprehensive coverage without depreciation being factored in.  Read More

      8. Engine Protector Cover

      By opting for the engine protector cover, if your car engine gets stalled due to oil leakage or water ingression or the gear box gets damaged, the insurer bears the expenses towards repairs for the same.

      9. Accident Shield

      By taking this cover, you get compensation for all car occupants in case of total disability or even death arising due to an accident.

      10. Tax Savings

      As a general rule, those using cars for personal use cannot avail of any tax deduction on personal car insurance. However, for business owners who use a vehicle(s) for business purposes, the car insurance premium paid qualifies for tax deduction under Section 88 of the Income Tax Act. Also, the vehicle has to be in the company’s name or the business owner’s name where he/she is the sole proprietor.

      Quick Tip:  The cost of operating the car for business purposes can be calculated and compared with the standard rate set by the IRS. These amounts can be compared to understand which option offers higher deduction, and that amount can accordingly be deducted, when filing returns. One can also calculate the car’s depreciation and add it to the deductible amount when filing returns.

      Over to You!

      You’ve just seen 10 things that you didn’t know your car insurance covers…

      Now it’s time to put this learning into practice and start making the most of your car insurance policy.

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      #Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc

      *Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.

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