Car insurance is a crucial aspect of owning a vehicle. When you purchase a car, it is mandatory to have insurance coverage as per the Motor Vehicles Act, 1988. However, with so many options available, choosing an insurance policy can be daunting. To make an informed decision, you need to understand the various aspects of car insurance policies. In this article, we will decode car insurance policies to help you better understand them.
Types of Car Insurance Policies
Car insurance policies can be broadly classified into two categories – Third-Party Liability and Comprehensive Insurance.
Third-Party Liability Insurance
Third-Party Liability Insurance is mandatory for all car owners in India. It provides coverage for the damages caused to a third party – any party other than the insured and the insurer. In case of an accident, the insurance company will cover the damages caused to the third party�s vehicle or property and compensate for any injury or death caused to the third party.
The coverage amount for third-party liability insurance is fixed by the Insurance Regulatory and Development Authority of India (IRDAI) for different vehicle types. For cars, the coverage is Rs. 7.5 lakh for damages to property, and for personal injury or death, it is an unlimited amount.
Comprehensive Insurance
A Comprehensive Insurance policy provides coverage for damages to your car as well as damages caused to a third party. It covers damages caused by natural calamities, human-made disasters, theft, and fire. Apart from these, it also covers personal accident cover for the owner-driver of the car.
In recent years, Comprehensive Insurance policies have gained popularity due to the extensive coverage they provide. However, this coverage comes at a higher premium than Third Party car Insurance.
Add-On Covers
Add-On Covers are additional coverage options that you can purchase along with your car insurance policy. These covers enhance the scope of your policy, but they come at an additional cost.
Here are some popular Add-On Covers that you can consider:
- Zero Depreciation Cover: Standard car insurance policies factor in depreciation while settling claims. This means that you will have to bear the cost of replacing parts that have depreciated over time. With a Zero Depreciation Cover, the insurer will not factor in depreciation, and you will be entitled to a higher claim amount.
- Engine Protection Cover: This cover provides coverage for damages caused to the engine of your car due to water-logging or oil leakage. It is especially useful if your car is frequently driven in areas with heavy rainfall.
- Personal Accident Cover for Passengers: A Comprehensive Insurance policy provides personal accident cover for the owner-driver of the car. However, it does not cover the passengers traveling in the car. With this cover, you can provide personal accident coverage for the passengers traveling in your car.
- Roadside Assistance Cover: This cover provides assistance in case of a breakdown or any other car-related emergency. It includes services like towing, battery jump-start, and fuel delivery, among others.
- NCB Protect Cover: A No Claim Bonus (NCB) is a premium discount that you can avail of if you haven�t made any claims during the policy period. With an NCB Protect Cover, you can retain your NCB despite making a claim.
How to Choose the Right Car Insurance Policy
Choosing the right car insurance policy can be confusing. Here are some factors that you should consider:
- Coverage: The coverage offered by the policy should be sufficient for your needs. If you have an expensive car, it is advisable to opt for a Comprehensive Insurance policy with sufficient Add-On Covers.
- Premium: The premium is the amount that you need to pay for your insurance policy. It is important to compare policies from different insurers to get the best premium rates. You can also use premium calculators available online to estimate the premium for different policy options.
- Network Garages: Check if the policy offers cashless claims at network garages. This will help you avoid the hassle of paying for repairs and then claiming reimbursement from the insurer.
- Claim Settlement Ratio: This ratio indicates the percentage of claims settled by an insurer. Choose an insurer with a high claim settlement ratio to ensure that your claims are settled promptly.
- Customer Service: Good customer service is crucial when it comes to insurance claims. Check if the insurer offers round-the-clock customer support and if they have a reputation for prompt and efficient claim settlement.
How to Renew Your Car Insurance Policy
Renewing your car insurance policy is crucial to ensure that your policy remains in force and you don�t face any penalties for driving without insurance. Here�s how to do it:
- Check the Renewal Date: Check the renewal date of your policy and the renewal notice sent by your insurer.
- Compare Policies: Don�t blindly renew your policy without comparing it with other available options. You can use online comparison websites to compare policies and get the best premium rates.
- Renew the Policy: Once you have chosen the policy you want to renew, you can renew it online or visit the insurer�s office.
- Make the Payment: Make the payment for the premium either online or via cash or cheque at the insurer�s office.
- Receive the Policy: Once the payment is made, your policy will be renewed, and you will receive the policy document via email or physical mail.
Conclusion:
In conclusion, car insurance policies are a crucial aspect of owning a car, and understanding them is essential for making an informed decision. It is important to compare policies from different insurers, consider factors like Add-On Covers, and choose a policy that meets your needs. Remember to renew your policy on time to ensure that you are always covered while driving. Stay safe on the roads, and don�t forget to renew your policy!
