Quick Guide To Motor Insurance - Get Smarter!

Insurance, as a word in-itself can be scary and puzzling to an individual. Here's a Quick Guide

Quick Guide To Motor Insurance

A Quick Guide To Motor Insurance In India!

Insurance, as a word in-itself can be scary and puzzling to an individual. However, getting motor insurance is compulsory in India, and we will help you through the entire process, step by step.

Motor insurance, is commonly referred to as car insurance or auto-insurance. Motor Insurance is an insurance policy which protects vehicles like personal cars, bikes and commercial vehicles. 

With the rapid increase in the number of vehicles on the road, it gets extremely difficult to protect your motor-vehicle from unwanted accidents. Coupled with high repair costs, the whole process of buying and maintaining a vehicle could put a dent in your bank balance. Therefore, it is essential to have a good vehicle insurance policy.

Your vehicle is possession that is close to your heart. Thus, it makes sense to ensure that your car is secure and safe in the best possible way.

Life is one great balancing act. As you set out to balance everything, there are always little road blocks on the way. The best way to deal with them, however is to handle them well and move ahead in life. Giving you peace of mind from accidents and thefts, a good motor insurance policy is a must.

Typically, motor insurance policies compensate the owner against any financial loss arising out of damage or theft of their motor-vehicle. It also protects you from damage caused to a third-party individual, vehicle or property.

Types of Motor Insurance

Motor insurance policies can be broadly classified into two main types:

– Third-Party Motor Insurance Policy: Third-Party policies cover injuries/damages caused by the policy-holder to an individual, their vehicle or property during an accident. Third-Party motor insurance is compulsory for all motor-vehicles in India. This is the cheapest kind of insurance you can buy, by itself—but that doesn’t mean it’s the correct way to go!

– Comprehensive Motor Insurance Policy: Also known as a packaged insurance policy, it covers injuries to the policy-holder, damages to his vehicle and includes the third-party insurance component too. Usually this is the minimum you should start with –give you, the car, and third parties the necessary protection you’ll need on our roads!

Factors Involved In Buying Motor Insurance

Since there is no fixed rate and insurance policies are personalized (depending on what kind of customer you are), there are tons of factors which can affect the price of a motor insurance policy. To help you understand them, we will go through each of them, one by one.

– Insured Declared Value/Market Value: The Insured Declared Value, commonly known as IDV is nothing but the current market value of your motor-vehicle. It is the maximum amount the insurance company (insurer) will pay in case of a claim. The higher the market value of your vehicle, the higher the premium of your motor insurance policy. But that doesn’t mean you need to artificially increase or decrease it! Stick to the correct amount.

– Claim History Of Owner: Your premium is also affected by the number of claims you make in a year. If you don’t make a claim in a year, that’s great! At the time of your policy renewal, you are given a ‘No Claim Bonus’, also known as NCB. As the years pile on –your NCB increases and your premium decreases!

– Age of The Vehicle: The age of your vehicle is an important factor in the cost of your motor insurance policy. The newer the vehicle, the higher the market value or IDV and therefore, higher the premium. However, if your vehicle is old and is easily damaged, the premium amount could go high too. It all depends on the discretion of the insurance company. Some add-on covers won’t apply to you as the age of your vehicle goes higher.

– Add-On Features: Most insurance companies provide special add on features to a motor insurance policy. You have to shell out extra for them but that’s added protection. For example, zero deprecation cover add-on, the engine and gear box protection add-on, the key-replacement add-on, etc.

– Owner’s Age: It is regarded that as a person matures, they drive less-rashly. Therefore, some companies offer a discount on their motor insurance policy as the owner grows older*. This varies from company to company and should be checked when buying insurance in case you are offered this.

– Type of Motor Insurance Policy: The insurance premium also depends on the type of motor insurance policy you opt for. If you opt for the third-party insurance, your will pay a lower premium than for a comprehensive motor insurance policy. That’s mainly because a comprehensive motor insurance policy covers both damages to vehicle, the owner, and third-party. As you take more add-ons for your car and needs the premium increases (but so does the protection!).

– Others: Engine capacity (the cc it has), the area where the car is from also make a difference when determining your insurance premium.

– Telematics: Soon your insurance premium will take into account the number of kilometers you drive, and how you drive, and that will make a huge impact on your premium!

Finding The Right Motor Insurance Policy

– To get the best motor insurance policy for you, you need to know the kind of an owner/driver you are. Along with that, you need to take into consideration the value of your vehicle and the age of it. This will help you in deciding what type of a motor insurance policy you need – Third-Party or Comprehensive. We don’t recommend a pure Third-Party. But we’d suggest getting a Third Party bundled with Fire and Theft in a minimum, as your stationary car could face these dangers.

– You should compare the motor insurance policies available online and offline by insurance companies (though digital is far more comfortable and can be bought from anywhere! Please keep in mind to read the inclusions (what you’re covered for) and exclusions (what you’re not covered for) of each insurance policy by different insurance companies. This will help you, make up your mind, if you are confused between getting third-party or comprehensive motor insurance.

– Once you know the type of motor insurance policy you want to get, it’s easy! Just go through the quotations from all the different insurance companies and select the one which suits you, your vehicle and your budget! We recommend looking at what may seem like minor things but aren’t: Such as their road-service assistance program, engine and gearbox cover if you live in flood prone areas, tie-up with garages in your city, etc.

– Nowadays, with the online space booming, you can pay and get a motor insurance almost instantly—but one click insurance isn’t always smart. Make sure you fully understand what you’re buying. 15 minutes spent on insurance means hours and hours of your life saved if you ever have to make a claim!

What Next For Motor Insurance In India?

Got your insurance policy all sorted? Damaged your vehicle? It’s okay! You’re insured, remember? Remember, the first thing to do if you’re in a mishap with your vehicle is to notify the insurance company, you can usually notify them via their toll-free number. After which you can register the claim, by providing the necessary documents and the claim form. Nowadays, many insurance companies even let you register a claim online itself on the app itself! 

If you take your car to a garage affiliated with your insurance company, the complete process of getting the claim amount from the insurance can be virtually cashless. Most major motor insurance companies even have tie-ups with your car manufacturer’s service centre operators. If, however, you decide to get the work done at a local garage, reimbursement is very easy as it only needs submission of repair bills.

So, there you have it! The entire A-Z of why, how and where to get your motor insurance from! We hope this helped you to look at motor insurance policies more effectively but also to understand how they work.

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Navi General Insurance Limited
(Formerly known as DHFL General Insurance Limited)
402,403 & 404, A & B Wing, 4th Floor, Fulcrum, Sahar Road, Next to Hyatt Regency, Andheri (East), Mumbai – 400099. Maharashtra

IRDAI Registration No: 155 | CIN: U66000KA2016PLC148551

For more details on risk factors, terms & conditions please read sales brochure carefully before concluding a sale

To visit the IRDAI website, please follow: https://www.irdai.gov.in/

Toll Free No: 1800 123 0004

Roadside Assistance*: 1800 266 8088

Write to Us: mycare@navi.com

*Available, if mentioned in your Policy document.