All you wanted to know about Car Insurance

Your vehicle is probably one of the most expensive things you own in your life. Car Insurance also known as Motor Insurance protects this asset and helps you cope with financial loss caused by accidents, damage or theft of your car. Another reason for taking car insurance is that while driving, you are responsible for the safety of your passengers, other people’s property, pedestrians and yourself. In India, it is mandatory to have at least a third party motor insurance before you can drive on the roads. Motor insurance cover the costs of potential damages to the car or injuries in case of an unforeseen accident or theft.

What is the meaning of car insurance

Car insurance is a protection against the financial loss arising on the occurrence of an unexpected event. You can avail this protection by paying a premium to an insurance company who is insuring your car.

Why do you need a car insurance

As per Motor Vehicles Act 1988, insuring your car against the risks of third party liability is mandatory. Most private car owners however prefer comprehensive or package policy covering the risks of loss or damage to the car – Own Damage in addition to the Third Party Liability Risk.

What is own damage

Own damage insurance is a form which helps you in the event of ordinary losses/damages to your car, regardless of who is at fault and where the accident took place. It covers a wide variety of cases, from broken windows to theft or destruction.

What is third party liability

Third-party insurance cover is a statutory requirement under the Motor Vehicles Act, 1988. It is referred to as a ‘third-party’ cover since the beneficiary of the policy is someone other than the two parties involved in the contract, i.e. the car owner and the insurance company. The policy does not provide any benefit to you; however, in case of any legal liability that you may incur due to the death or injury to a third party or damage to the property of a third party while using your car, is covered. The policy also covers the legal expenses you might incur to defend this claim.

Can the driver be also insured

It is possible to insure the paid driver (Legal liability to employees) under provisions of Workmen’s Compensation Act. You can avail this cover on payment of a nominal premium amount under the same policy.

Should the car owner be also insured

It is compulsory to insure the registered owner of the vehicle against risk of personal accident provided if he/ she hold a valid Indian driving license. This cover is available on payment of a nominal premium amount.

Can the co – passengers travelling in the car be insured

Yes, you can insure your co-passengers against risk of personal accident for a limited sum by paying an additional nominal premium.

What is no claim bonus (NCB) in a car insurance

No Claim Bonus (NCB) is a discount on premium of the own damage (OD) portion of your vehicle when you renew your policy, provided you have not made any claim during the last policy period.No Claim Bonus is allowed to the Insured and not to the insured car.

On the event of sale of the car, only the insurance policy can be transferred to the new owner but not the NCB (No Claim Bonus). The new owner has to pay the difference on account of NCB for the balance policy period. The original owner can, however, use the NCB from his old car (the one he has sold) to a new car purchased by him. He or she can get the ‘No Claim Bonus’ letter by applying to the existing insurance company.

Who settles the claim in case of an accident

Most of the insurance companies has started ‘cashless’ claim settlement for the own damage claims, if you approach their approved / network workshops. In case you get the car repaired in a non-approved or network workshop, claims are directly settled to you upon submission of all required documents within the specified time period.

Third Party claims are awarded by Motor Accident Claims Tribunals as per provisions of Motor Vehicles Act 1988 and settled by the insurance company.

Is there any benefit of buying Motor Insurance online

If you buy a Motor Insurance online from the insurance company website, you get the policy instantly as there is no documentation or paperwork involved. You can choose from multiple payment options e.g. Credit Card, Net banking or Debit Card etc. for paying the premium.

Can I renew car insurance policy online

Yes, you can renew your car insurance policy online, starting 60 days before the expiry date of your existing policy. In case your car insurance has already expired, the renewal will be subject to satisfactory inspection by company authorised surveyor who will inspect your vehicle and check the required documents.