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Your motor insurance checklist as COVID-19 restrictions ease out

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After the three COVID-19 variants and waves that affected businesses, it appears life, post-Omicron, is getting back on track now.

The change is quite visible with many businesses bouncing back to the pre-pandemic levels, working from home taking the shape of a hybrid or work from office model, and the travel sector looking upbeat. The rise in mobility has also seen the number of cars on roads growing.

With the fall in infections and easing of restrictions, it's time to examine your vehicle before hitting the road. The starting point is to ascertain whether your car is serviced and whether all checks have been made. But, most importantly, ensure that your motor insurance policy is in order. This crucial tool is the financial shield for you and your vehicle during accidents or breakdowns. Here, we provide a motor insurance checklist.

1. Renewing your policy

Since the outbreak of the pandemic, vehicles have been hardly on the road, and it is possible that policies could have lapsed. So, it is elementary to check its renewal period and the grace period, if applicable, before taking it out of the garage. The absence of a valid policy will expose you to the risk of a huge financial and personal loss, in the event of an accident. Not to mention, the absence of insurance mandated by law can also land you in legal trouble. Also, renewing after the expiry date will mean going through the entire documentation process again. Thus, always renew your cover within the due time.

2. Opt for comprehensive coverage

While third-party car insurance (TPI) is mandatory as per The Motor Vehicles Act, a comprehensive plan, providing a holistic coverage, is a better and recommended option. It covers against third-party liabilities and also offers insurance against own damages.

Moreover, it provides financial aid to the policyholders upon losses that might arise from a collision. Some risks covered under this superior protection are theft, natural calamities, repairs and replacement and even loss of cars. Though the premium of this shield is higher, it also provides a significantly higher coverage. So, till now, if you have only covered your motor vehicle with TPI, it's time to upgrade.

3. Include add-ons

When buying or renewing your comprehensive car insurance coverage, a car owner will come across many riders, which, if incorporated, will enhance the scope of your policy protection. For instance, there are roadside assistance cover, arranging a mechanic, towing, alternative vehicle, fuel delivery, zero depreciation cover (bumper-to-bumper cover), engine protection cover and no-claims bonus protection.

However, as these riders are not included in third-party insurance and mainly come at an extra cost, it increases the premium. Therefore, customise your policy prudently with suitable add-ons, if budget is not a constraint, and make your car insurance coverage all-encompassing.

4. Check claim settlement ratio

After short-listing the coverage and riders, review the claim settlement ratio (CSR) of the insurer. This is a critical point of consideration as it will provide a view of the company's compensation record. After all, the primary objective of insurance is to get swift reimbursement of the expenses incurred during an accident or a mishap involving the insured's vehicle. Hence, examine the insurance providers' CSR and choose the one with a prompt and higher settlement percentage ratio. It will reduce the prospect of your four-wheeled insurance claims getting rejected. Typically, a CSR of 90 percent and above is considered ideal.

5. Car insurance deductible

A deductible refers to a fixed amount a policyholder is required to pay when filing a claim. Consequently, when purchasing a policy, if you opt for a higher deductible, your car insurance premium will decrease and vice-versa. As these two aspects are inversely proportional to each other, choose as per your economics, or you may also decide not to bear any deductibles.

6. No-claim bonus

As the name defines, no-claim bonus is the reward given by the insurance company to the insured for making no claims during the term of the policy. Moreover, it makes the policyholder eligible for a discount that ranges between 20 and 50 percent on the premium amount at the time of renewal. Also, the percentage of the NCB discount increases each year during the policy tenure when no claims are raised and is further transferable if the customer buys a new vehicle.

7. Cashless garage network of the provider

Garage network, most policyholders assume, is covered in the insurance. Though they are, what is vital to examine is whether they have a widespread and cashless network. Since adversity can strike anywhere and anytime, keeping this aspect in the checklist when determining the car insurance provider is essential. Besides, it will assure you can file a claim and get a hassle-free car repair from any authorised garage across the country, so you don't remain stranded for long.

To restate, with life coming back to normal and roads getting busier, it's time to verify whether your car insurance is valid and is in place. However, if you are looking to buy a new policy, renew the existing one, or switch to another insurance provider, either opt for the traditional offline route or compare several policies online by merely adding in essential details. This economical and time-saving process will help you discover various options and pricing. Whichever way you adopt, do follow the checklist before pressing the accelerator again.

Ashwini Dubey Heads  Motor Renewals at Policybazaar.com

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