MyInsuranceClub.com is the best place to compare insurance, Go there

So, you’ve bought yourself a brand new car. A proud moment indeed, given the amount of effort you put in to test-drive cars, short-list the ones that fit your budget and style, seeking expert advice on the car performance, looking at loan options and finally signing the papers.

Now obviously, you do have a motor insurance on your car, as it is mandated by law. But, here are some basics that you really should know about. 

There are 2 types of Motor insurance policies:

One is a ‘Liability Only’ policy which is compulsory for all vehicles. This policy covers the legal liability that arises out of an injury /death and/or property damage of a third party (victim).

The other is a ‘Comprehensive Motor Insurance’ policy which provides cover for own-vehicle damage and third party liability. This will cover damages or losses from man-made tragedies like theft, riots, malicious activities, act of terrorism etc. Also, it will cover damages caused by natural calamities such as earthquake, floods, landslides, storm etc.

While third party insurance is mandatory in India, it makes a lot of sense to opt for a comprehensive cover.

Let me paint you a picture and yes, this has indeed happened to most people. You park your car and walk into a restaurant only to come back and see a dent in your car. A heartbreaking sight indeed!

The cost of repairing your car will set you back by a certain amount. However, if you have a comprehensive cover, your insurer will pay for the repairs.

Additionally, insurance companies are soon starting to realize that the customers’ needs have evolved and they simply cannot lure you with a vanilla policy. Smart insurers now provide add on riders which take care of costs that normally wouldn’t even cross your mind. These are added protection in terms of riders.

Some of the benefits you can look for:

Daily allowance: you get money for hiring alternate mode of transportation while your car is under repair. 

Lost key/ lock replacement cover: cover to replace car keys, if lost or stolen. Cover for lock, if the car has been broken into.

Overnight stay at a hotel: you get paid to stay at a hotel if your car becomes immobile due to an accident.

Return to invoice cover: In case there is a total loss due to some accident, then there is always a difference between the ‘purchase price of vehicle’ and the ‘claim amount receivable’ under the policy. In such a situation, this rider provides for this difference amount.

No Claim Bonus Protection Cover: At times, people don’t file a claim because they risk losing their No Claim Bonus (NCB) bonus. In this rider, if the policy holder makes not more than one claim during the entire policy period, then the existing NCB can be retained. This cover protects your No claim bonus.

Depreciation Reimbursement Cover: This add-on cover offers full claim without any deduction for depreciation on the value of parts replaced.

Repair of rubber parts, glass, fibre and plastic: You can get damaged glass, fibre, plastic and rubber parts repaired without impacting your No Claim Bonus

Loss of baggage and personal belongings cover: you get covered by your insurer

Companies also offer discounts if you have installed an anti-theft device approved by the Automobile Research Association of India (ARAI).

Most companies may not cover you for:

Usual depreciation and normal ageing of the car

Any major loss or decrease in value of the car.

Automobiles including vehicles being used differently than in line with restrictions

Electrical / technical problem

Depreciation of consumables such as tubes and tyres

Damage by / to an individual driving any car with no legitimate license

Damage by / to an individual driving the car under the influence of liquor or drugs 

How important is it to do some research before picking-up a car insurance policy and what can be the implications if you overlook the finer details?

For most people the most precious purchase after their house is a car. Imagine a scenario where you car is damaged! Your fault, someone else’s fault, doesn’t matter. What matters is that you need to get it fixed. Oops! The garage gives you an estimate that shocks the living daylights out of you. Suddenly your face brightens up; the thought that your car is covered under insurance takes away all your troubles away in a whiff. You stop flinching because your insurance company will pick up the tab. You call up your insurer and they send someone to evaluate the damages. Meanwhile your car is grimly parked at the service center. Two days later, you get a letter from your insurer stating that they cannot cover you for these damages, no reasons mentioned. Your instant reaction is to want to tear the policy documents into shreds and fling them at your insurer. Total waste of time, not to mention you will soon need your cheque book! You wonder why a certain colleague at your workplace or your friendly neighbor was covered by their insurer in a similar situation in the past. My bet is they had a better policy than you obviously do. 

You swear to yourself, never again. You want it all, a policy that will cover you comprehensively.

“Can you switch to another insurer and transfer your No claim bonus?”

Yes, you can. Now armed with the right knowledge weigh your options out, seek advice from friends. Look for the lowest rates and the best features, discounts available (if any), if the insurance meets all your needs. Of course, comparison shopping is not so much fun when it is for an insurance policy. You’ve probably even been putting it off or considering skipping it all together. But do not fall into that trap because you know what they say “Fool me once, shame on you, fool me twice, shame on me!” 

Motor policy, in India, can be issued only in the name of the registered owner. If you have bought a second hand car, you must transfer the insurance policy in your name and address; and it should match with the RTO records otherwise the claim is not payable. A fresh proposal form needs to be filled in. There is a nominal fee charged for transfer of insurance policy. If there is any discrepancy at the time of the claim, then there are high chances of your claim getting rejected.

If you have installed a CNG/LPG kit in your car or if there is any other change in the structure/usage of the vehicle, it should be registered with the RTO, entered in your RC. Make sure to declare it to your insurer as well.

Before you make a claim, keep these documents ready:

Proof of insurance - Policy document

FIR - in case of accident involving Third Party Injury or Damage

Original and a Copy of Registration Book

Claim form with the original estimate of repairs obtained from the workshop

Motor Driving License of the person driving the vehicle at the time 

The other most dreaded time when you will have to turn to your insurer would be if your car gets stolen. Most certainly, you will panic and all hell will break loose. But fret not; your insurance will cover you for the car. Just ensure that you immediately report the theft at your nearest police station and to your insurer. In case the car documents are missing, contact the registration office and obtain duplicate RC book from the RTO. It may take you longer to get the settlement as the police and the RTO will investigate into the theft and try to recover your car. But soon, your claim will be settled.

Companies like TATA AIG, Royal Sundaram, ICICI Lombard and many more, offer car insurance. At the risk of overemphasizing, my advice is that you buy a comprehensive cover with additional riders; and look for insurers that offer cashless facility. Don’t naturally opt for the most affordable one as ‘cheap’ does not necessarily mean ‘the best’. Keep these simple steps in mind the next time your car insurance is up for renewal.

Everyone who owns a car has a Car Insurance Policy and that is because it has been mandated by the Indian Government. However, how many of us are even aware of the facilities that our Car Insurance policies give us? While renewing our policies, the only thing that bothers us is the premium amount! The insurer who provides the least quotation bags the policy! But do you even know how they calculate the premium and how is some insurer providing lesser premium than the others?

Well, I got to know about it last week when my car insurance policy was due its renewal. I checked with Tata AIG, Chola MS, ICICI Lombard, Reliance, etc. to get the least quotation for my 3 year old car. The first 2 years I had renewed the insurance policy which my dealer had provided, without even bothering to check the details of the policy. last year I had shifted company only because my cousin had joined that company and insisted that I buy their policy, again without knowing the terms and conditions of the same.

However, this year, when I got the quotations of various insurers, I was confused because some insurance companies were offering a very low amount than the one I already have. For example, for my 3 year old Wagon R VXi I got a quotation of about Rs 4500 from 2 insurance companies, which were almost Rs 1000 less than the one I had bought from my cousin. I checked the Car Insurance policies that can also be purchased online for details as well. But my obvious reaction was to call up my cousin and check for clarifications, which I did. She didn’t know how to defend her company policy and kept giving me the USPs of the policies. That is when I wanted to know what queries others also have while purchasing a Car Insurance Policy. While going through their detailed quote, I found the catch!

What the other insurance companies had done is that the value of my car had been depreciated by almost 40% to reach a low premium amount. No wonder their premium amount is about Rs 1000 less than the one I had bought from my cousin. That’s when I realized the importance of checking out the features without blindly taking a car insurance policy.

3 Most important things to keep in mind while purchasing a Car insurance Policy:

1. The value of your car: If your car is valued at a very less amount, then the insurance premium would be less but the very purpose of having an insurance policy is defeated. It would pinch you in case you have to make a claim.

2. The garages which offer cashless facility: It is very important that you are aware of the garages where you can give your car for repair that are associated with your insurance policy. Else it would be very difficult if the claim amount is large as initially you would have to pay it from your pocket and then claim for a reimbursement!

3. Claim Procedure, i.e. whom to contact when you have to settle your claim and what is the basic procedure. This information is important because each company has their own timeframes within which claim has to be filed and sometimes motor documents like Motor Collision Report, etc. from the nearest police station is required.

Hence do ensure that you check your policy details before you renew your existing one or buy a fresh one. It helps either ways!

Motor Insurance, is a precautionary measure, mandated by the Indian law for all motor buyers in the country. It serves as a protection against any unforeseen accident or damage to the vehicle. With numerous insurance companies in the market, offering diverse terms and conditions, how does one go about choosing the right plan for their vehicle? What factors must be considered when making the choice? My Insurance Club explains it all.

An Overview of Motor Insurance

Motor Insurance offers cover against loss or damage to the vehicle by accident, fire, earthquake, riots, lightening, theft or explosion, and third party cover. It could broadly be categorized into two types:

1. Third Party Liability Insurance - The Motor Vehicle Act of India makes it mandatory for all motor owners to take a third party liability insurance. This cover is for any bodily injury or death and property damage to a third party.

2. Comprehensive Insurance - A comprehensive motor insurance policy covers any loss or damage to the vehicle that has been insured, stolen vehicle, plus cover for Third Party Liability.

Making a Choice - How Should You Go About It

# Understand your insurance need

First and foremost you need to understand what exactly your insurance need is.  What do you want to protect? Insurance companies offer additional cover at extra costs, such as personal accident cover for passengers or quick service on breakdown or accident. Be clear about what things you want to protect. Sometimes covering something of less importance could leave you paying extra money.

# Do a comparative study

Do an extensive comparison of what each insurer has to offer and the costs they involve. MyInsuranceClub, make this process easier through the comprehensive comparison facility available online. Check the various parameters of policies versus the cost while making your choice. Some plans come with low premiums and some with a higher premium. Evaluate choose the one which gives you the best deal for the premium it charges.

# Check the credibility of the insurer

It is essential to check the credibility of the insurer. This is to ensure your claims, are settled on time. The company must be financially stable with a good credit history. Reviews from websites, any consumer complaints, and even word of mouth opinions would be quite beneficial in this regard. It is always better to go in for a company which has a good name and reputation.

# Read the finer details

Get familiar with the terms and conditions of the policy. What are the modes of payment, claims procedure and renewal procedure? Get familiar with the procedures for a hassle free relationship with the insurance company.

# Cashless Settlement

Cashless settlement for motor insurance is an easy and simpler way to settle claims. Insurance companies have tie ups with various garages across the country for such settlements. Cashless settlements do not require any authorization for claims and hence one need not run from pillar to post to file claims. Check to see if the insurance company’s authorized garage for cashless settlement is one in which you would be comfortable getting your vehicle serviced.

# Evaluating at the time of insurance renewal too

Shopping for insurance should not be done only at the time of buying a new car. You must shop around a bit when your policy comes up for renewal too. With so many insurance players in the market, it pays to check if your current insurer is offering you the best quote possible.

Motor Insurance Exclusions

In general, the following are the exclusions of motor insurance by almost all insurance companies. So before filing your claims check on the exclusions.

·         Normal wear, tear and general aging of the vehicle

·         Depreciation or any consequential loss

·         Mechanical/electrical breakdown

·         Wear and tear of consumables like tires and tubes

·         Vehicles including cars being used otherwise than in accordance with limitations as to use

·         Damage to/by a person driving any vehicles or cars without a valid license

·         Damage to/by a person driving the vehicle under the influence of drugs or liquor

·         Loss/damage due to war, mutiny or nuclear risk

The car insurance segment is a very competitive market in India. We have a host of companies all trying to out-price each other and gathering more market share.

These are some of the add-on features which can be purchased along with your regular car insurance policy. They come at a small cost but add great value.

Return to Invoice

The value of any car drops significantly the moment it touches the road outside the showroom from where you purchased it! Now let us assume your car is stolen 12 months after you purchased it. When you go and try to claim re-imbursement, you would not get anywhere close to the amount required to buy a new car! The insurance company would apply a depreciation rate and then calculate the amount payable to you. Also there are considerable costs in registration and road tax charges when you buy a new car.

Through the return to invoice feature, the car insurance company will pay you the amount required to purchase a brand new car of the same type. The registration and road tax payable will also be paid to you. So go get back to buying a brand new car without spending a rupee.

Lets take an example: You buy a car for Rs. 5,00,000. The registration and road tax etc came to another Rs. 25,000 odd. So a total cost of Rs. 5,25,000 is incurred in purchase of the car. Now if the car is stolen, the insurance company would typically pay you around Rs. 4,25,000 for the loss incurred to you. So within a year you would have to shell out Rs. 1,00,000 extra in case you want to buy a new car. With the return to invoice cover, you insurance company would pay you the extra Rs. 1,00,000 so that you have a brand new car at no cost!!!

Tata Aig General Insurance Company offers this feature.

Great feature – right???

There is good news coming almost every day for the consumers on the insurance front.  A long standing demand that health insurance and car insurance policies should be portable will soon become a reality.

What is Insurance Portability?

It is something very similar to what is being worked out in the Telecom Sector. You have a mobile phone number from Airtel – you should be able to go to Vodafone without giving up your existing number. Simply put, it allows a consumer to shift from one insurance company to another insurance company and avail the same benefits at no extra cost or may be a marginal fee to handle the transaction. The details of insurance portability are still being worked out and guidelines from IRDA, the insurance sector regulator in India, will be in force very soon.

So far the lack of standard products was a huge barrier for insurance portability. If you are not satisfied with the services of a particular company, you cannot just shift to another company as the new company might not have an identical policy. This prevents us from carrying over benefits like No-Claim Bonus to the new company. It can be a huge factor as you no-claim bonus can be as high as 25% to 30% in some cases and you would lose all benefits once you shift to a new company.

Insurance portability is very useful for health insurance and motor insurance policies as they are 1 or 2 year policies and hence are not long term in nature. It would be unfair and tough to expect the same for life insurance policies.

Currently the regulator has kick-started the process and it would take some time before we see the final version of insurance portability. If the insurance industry does the same before the telecom industry, it will be a truly wonderful gesture from our insurance regulator.

Thanks IRDA.