Motor Insurance
According to The Motor Vehicles Act, 1988, buying motor insurance is mandatory in India. One should buy motor insurance irrespective of the distance it is driven every day. The right coverage can protect you from a financial shock in case your vehicle gets involved in an accident. Another major aspect of buying vehicle insurance is that the insurer will extend protection against any major legal liabilities a vehicle owner might face. These include lawsuits and any legal fees billed in the name of the policyholder.
The aim of buying motor insurance is to remain financially protected at all times. To ensure this, the ideal time to buy motor insurance is as soon as the vehicle leaves the showroom. Policy renewals should be done a couple of weeks prior to the date of expiry of the active motor insurance policy.
Third party versus comprehensive cover: Before buying a motor insurance policy, it is important to know about its inclusions and exclusions, features, terms and conditions, and other fine print. The features of your motor insurance policy should depend on your personal requirements, such as how much it is used, its make and model, its geographical location, and your driving habits.
The coverage that a motor insurance policy offers depends solely on the type of policy. Two types of motor insurance policies exist – third-party liability and comprehensive policy. As the name suggests, a third-party liability policy covers the cost of damages caused to a third party due to an accident. It also includes compensation for death or cost of treating third-party injuries. Along with these, the policy also covers any legal liabilities that may arise due to an accident. Buying a third-party motor insurance policy is mandatory by law.
The aim of buying motor insurance is to remain financially protected at all times. To ensure this, the ideal time to buy motor insurance is as soon as the vehicle leaves the showroom. Policy renewals should be done a couple of weeks prior to the date of expiry of the active motor insurance policy.
Third party versus comprehensive cover: Before buying a motor insurance policy, it is important to know about its inclusions and exclusions, features, terms and conditions, and other fine print. The features of your motor insurance policy should depend on your personal requirements, such as how much it is used, its make and model, its geographical location, and your driving habits.
The coverage that a motor insurance policy offers depends solely on the type of policy. Two types of motor insurance policies exist – third-party liability and comprehensive policy. As the name suggests, a third-party liability policy covers the cost of damages caused to a third party due to an accident. It also includes compensation for death or cost of treating third-party injuries. Along with these, the policy also covers any legal liabilities that may arise due to an accident. Buying a third-party motor insurance policy is mandatory by law.
A comprehensive motor insurance policy offers way more coverages and advantages as compared to a third-party liability policy. Along with offering a coverage against third-party liabilities, it also covers the cost of repairing any damage caused to the insured vehicle.
In case of two wheelers, you can now opt for Long-Term Two Wheeler policy which covers you against damages that your bike or scooter may incur due to any unforeseen events. You also do not have to worry about the exceptionally high costs that may arise due to damages caused to your bike by the occurrence of an accident, natural disaster and so on. Simply purchase a two wheeler Insurance once and stay worry-free for upto 3 consecutive years.
The primary advantage of buying a comprehensive cover is that the owner can increase the scope of coverage with the help of add-ons. These extra covers can only be bought with a comprehensive policy.
To know more, please write to us at info@veracityinvestment.com
In case of two wheelers, you can now opt for Long-Term Two Wheeler policy which covers you against damages that your bike or scooter may incur due to any unforeseen events. You also do not have to worry about the exceptionally high costs that may arise due to damages caused to your bike by the occurrence of an accident, natural disaster and so on. Simply purchase a two wheeler Insurance once and stay worry-free for upto 3 consecutive years.
The primary advantage of buying a comprehensive cover is that the owner can increase the scope of coverage with the help of add-ons. These extra covers can only be bought with a comprehensive policy.
To know more, please write to us at info@veracityinvestment.com
Auto insurance terms you should know
Insured declared value (IDV) : The approximate market value of a vehicle. In case of a claim, IDV is the maximum amount reimbursed to the claimant.
No claim bonus (NCB) : The discount offered on premium for not raising a claim in the previous policy period.
Deductible : Amount deducted from claim amount. There are two types of deductibles: compulsory and voluntary. Higher the deductible, lower the premium.
Inclusions : What is covered by an Insurer.
Exclusions : Situations and components that are not covered by an insurer.
Policy period : Duration for which a motor insurance policy remains active. It is usually one year
Add-on covers can prove useful: Add-ons are additional coverage options, which one can buy depending on one's personal choice and requirements. Owners of high-end vehicles should opt for add-ons like accessory cover, engine protection, etc.
- Zero depreciation - Every vehicle undergoes depreciation, that is, its value reduces with the passage of time. At the time of claim, depreciation forms a significant chunk of the claim amount. Depreciation is deducted from the claim amount before the final pay-off is made. This can cause a major loss to the vehicle owner in case of an accident. However, with a zero depreciation add-on, the depreciation amount is not deducted, and the vehicle owner is compensated the full amount.
- Engine protection - Depending on the make and model of the vehicle, the approximate cost of replacing the engine can be 10-30 per cent of its price. If the engine of a luxury vehicle gets damaged in a mishap, the cost of replacing it can be sky high. One can easily avoid this cost by purchasing an engine protection cover.
- Invoice cover - If a vehicle is stolen or meets with a major accident where it is declared as “total loss”, that is, the vehicle is not in usable condition anymore, a 'return to invoice' cover proves to be a boon. Under this add-on, the owner can claim an amount equal to the cost of the vehicle mentioned on the invoice in case of total loss or theft.
- Accessories cover - Luxury vehicles have a large number of accessories that should ideally be covered by insurance. If you are a vehicle enthusiast and have got the interiors customised, or your vehicle is adorned with an exquisite shade of paint, and the seat covers are expensive, then buying an accessory cover makes sense.
- Key protection - A vehicle key is not a mere piece of metal that opens a locked vehicle. A feature-rich luxury vehicle comes with an equally advanced set of keys. They have an integrated, high-definition touch screen that can be used to perform various operations. If such a high-end key is damaged or lost, the cost of replacing it can be very high. Buying a key replacement add-on will ensure coverage against this cost.
- Roadside assistance cover - Under this add-on cover, the insurance company offers round-the-clock emergency services like towing, refuelling, tyre change, arranging for a mechanic, etc. Whatever the case may be, it is highly recommended to be in possession of this insurance cover, as it provides the much-needed assistance in an emergency.
- Consumables cover - The repair of a vehicle takes up a lot of consumables, such as brake fluid, nuts and bolts, engine oil, and coolants. The cost of consumables can push the motor vehicle repair bill amount to a significantly higher value. However, if you are in possession of this add-on cover, the cost of consumables will be reimbursed by the insurance company.
- No Claim Bonus (NCB) protect cover - A motor insurance plan will accrue a No Claim Bonus (NCB) when a policyholder does not make any claim in a year. This bonus can be used to avail a discount in the renewal premium for the subsequent year. Since the NCB is a very attractive benefit, it should be protected by refraining from raising claims for small damages.
The NCB protect cover helps in safeguarding your hard-earned NCB. If you are in possession of this add-on cover, the NCB will be retained even after you raise a claim. However, this add-on is also not offered to vehicles that are older than 3 years.
Having an add-on cover with your motor insurance policy is like an additional safety net to protect you from unpleasant eventualities. If a friend has purchased a popular add-on insurance cover, you do not need to join the bandwagon. You should assess your insurance needs vehicle fully and choose add-on covers based on your unique requirements.
To know more, please write to us at info@veracityinvestment.com