What coverage do you need?
Depending on the age and use of the car, one should decide what type of insurance coverage they want for the car.
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Third party insurance – This type of insurance is compulsory under the Motor Vehicle’s Act, 1988. It is a sufficient policy if one has an old car.
Car insurance in the event of personal damage – This is insurance that protects the policyholder against loss and damage to their vehicle.
Complete car insurance – It covers the loss and damage of its vehicle and the vehicle of third parties.
Commercial auto insurance – If someone wants to use their vehicle to transport people from one place to another in exchange for money, they will need to purchase commercial insurance.
What is your risk assessment?
Insurance companies use information such as a vehicle’s age, vehicle make and model, geographic location, etc., to determine a person’s insurance premium rate. These are factors that determine the “risk” one poses. The more risk one presents, the higher the premium rate will be.
What is the IDV of the car?
The insured declared value is determined based on the age of the car. The value of vehicles begins to depreciate from the day they are purchased. An IDV must be declared when purchasing the insurance, as this will affect the amount of the claim. Remember that the correct IDV must be declared, because declaring a high IDV will result in a high premium being paid and a low IDV will result in a low claim amount.
What is auto insurance tenure?
For new cars, it is mandated by the IRDAI to take out 3-year civil liability insurance. Individuals can choose their own damage cover for 1 or 3 years depending on their need for cover. Most preferred policies include own damage coverage as well as third party coverage.
For other cars like old cars/used cars, the term will be one year regardless of global policy or 3rd party policy. It expires exactly after 1 year and must be renewed in time to avoid interruption of cover in the event of an accident.
Would you like to include additional guarantees in the policy?
Car insurance policies offer a variety of add-on coverages that can help enhance the policy and provide better protection. Zero depreciation, consumables, roadside assistance, engine protection and return to invoice are some of the main additional coverages. Insurance companies will ask the policyholder if they wish to purchase additional covers and if they wish to include an add-on they can do so by paying an additional premium.
Car insurance is very important and although the process may seem a bit tedious, it is quite simple if you prepare yourself a little. Make sure you fully understand all the benefits and limitations when purchasing a policy.
Are passengers covered by car insurance?
Usually only the driver/owner of the car is covered by comprehensive car insurance. There is a passenger cover add-on which can be opted in by paying a minimum additional premium to extend cover to car passengers.
Are you prepared to pay a voluntary deductible?
Insurance policies require policyholders to pay a mandatory deductible which will be decided when the policy is taken out. For example, if an accident occurs and the policyholder makes a claim, he would be required to pay the mandatory deductible to benefit from the amount of the claim. The policyholder also has the option of paying an additional amount called the “voluntary deductible”. If a policyholder offers to pay a voluntary deductible, insurance companies may give a discount on insurance premium rates.
Are online car insurance policy documents valid?
Yes, online and printed documents have the same validity. Once the font is purchased online, you can either download the document or save the font sent by mail. This also applies to a printed insurance policy to be produced wherever necessary.
Disclaimer: The article was written on behalf of Cholamandalam MS General Insurance Company Ltd. by the Times Internet Spotlight Team.