Motor insurance is one of the most important things that need to be kept in mind before purchasing a vehicle. It protects the vehicle against losses arising from untoward and unforeseen risks. Premium motor insurance covers financial losses arising from accidents, theft and other man made or natural calamities. But before purchasing an insurance policy, there are certain important factors that need to be determined by the buyer.
Motor Insurance is mandatory by law and as stated in the Motor Vehicles Act, 1988, it mandates that every vehicle should be compulsorily insured for at least third party risk. According to a latest survey conducted on Indian road safety, nearly 4 lakh people meet with accidents every month. If this high figure and the plight of Indian roads is to be considered, Motor insurance is a necessary requirement.
The compulsory third party motor insurance, In case of death or bodily injury to a third party or any damage to its car, the car insurance policy provides compensation of up to Rs 1 lakh. While, comprehensive car insurance protects your car from any man made or natural calamities like terrorist attacks, theft, riots, earth quake, cyclone or hurricane in addition to third party’s claims/damages.
In fact, if carefully chosen, motor insurance acts like a great friend at the time of crisis and offers you your heart’s desires. It covers the losses incurred in an accident and saves you from shelling out huge sum from your pocket.
Categories of Motor Insurance:
- Third Party Insurance
Third party insurance is mandatory by the law and it protects the policy holder against losses which arise due to bodily injury/death to a third party or any damage to property. In this case, the term third party includes people travelling with the insured person or whom the insured person injures and claims damages at the time of accident.
As it is a very basic and mandatory insurance plan, it does not protect the insured person or the vehicle and co-passengers against losses which arise due to bodily injury/death.- Comprehensive Insurance
This is a very beneficial and upgraded insurance plan. Though it is not mandatory, but in most cases wise people choose this plan in order to be extensively insured from additional situations apart from the basic areas covered by the third party insurance. This policy covers the driver, the car and co-passengers against damages /losses arising from untoward accidents and calamities.
Expenses covered under comprehensive insurance plan:
- Comprehensive Insurance
- Bodily injuries to the insured person or others
- Lost wages due to injury
- Benefits to survivors when an accident results in death
- Lawsuits brought against the insured person as the result of an accident
- Repairs made to the car due to damage caused in an accident
- Theft and Burglary
- Natural or man made calamities or disasters
- Flood or inundation
- Fire, explosion or self-ignition
- Malicious or terrorist activities
Things not covered by the policy
Motor Insurance does not cover the following: - Loss due to wear and tear
- Breakdown
- Accidents due to drunken driving
- War perils
- Failure or breakage when vehicle used outside the area mentioned in the plan
Important Factors to Understand Before Purchasing Policy:
It is to be understood that different insurance companies work with different statistics and use different methods to calculate premiums. Some companies are specialized in certain areas or types and so are prepared to give discounts in those areas. So before purchasing a policy, it is always advised to compare various policies and then to decide.
Factors influencing insurance premium
Make and Model of the Vehicle
Year of Manufacture
Place of Registration
Current Showroom price of the vehicle
Whether the Client is Individual or Corporate
Benefits for no claims
NCB or No Claim Bonus are discounts offered by insurance companies if the buyer has a particular claim free period. Buyers can avail a discount on the premium when they renew the policy for the next period.
Key Features of A Trusted And Effective Insurance Brand:
Depending on the vehicle you have
Claim settlement
Customer service
Discount & Deductible %
IDV (Insured Declared value)
CONCLUSION:
While purchasing a motor insurance, it’s always advisable that when it comes to safety and protection, one should not settle for just a minimum mandatory policy. Always cross check the clauses and understand the terms and policies. Compare them online for premium plans as motor Insurance can be confusing for many people because there is plethora of Motor policies.