Motor Insurance
For most of us, our car is dearer than wife. It should be handled carefully!!
Accidents are unfortunately very frequent in our country. With hardly anyone following traffic rules, damages are very common resulting in both – a financial loss and loss of mobility. Although the Indian law makes it compulsory to insure your vehicle against third party liability, but prudence also suggests a comprehensive cover for your vehicles
What is motor insurance?
Motor insurance is a contract between a vehicle owner and the insurance company where the insurance company compensates for the loss arising from accidents, burglary, or third party injuries/death. It can also cover any personal injury, to you or to your passengers due to a mishap.
There are 2 types of covers available:
Liability Only cover – insures you against any legal liability following an accident involving your vehicle which is mandatory as per motor vehicles Act. It does not cover any damage to your vehicle.
The policy covers the following risks only:
- Injury or Death of Third Party
- Property Damage (TPPD upto Rs. 7.5 Lacs)
Package cover – Insures all liabilities, as per the Motor Vehicles Act, as well as damages caused to your vehicle.
The policy covers Own Damage to the Insured vehicle caused by:-
- Accident by External Means Fire, Explosion, Self Ignition and Lightning
- Transit by Road, Rail, Inland Waterway, Air, Lift
- Burglary, House breaking or Theft
- Terrorism, Riots, Strikes or Malicious Acts
- Earthquake, Flood, Storm, Landslide, Rockslide
Addon Covers available:
Zero Depreciation: In a regular claim, an insured bears 30% – 50% cost of Fibre Glass, Rubber, Plastic Parts, Tyres and Batteries Cost. However, with additional coverage of Zero Depreciation Plan – the Insurance company even bears the depreciation cost and no amount is borne by the Insured. However, generally there is a restriction of number of claims as 2 to 3 claims in one year
Consumables: In a claim under normal motor policy, cost of Consumable Items such as Screws, Fuel Filter, Air Filter, AC Gas, Engine Oil, Brake Oil, Bearings etc has to be borne by the Insured.There are certain Policies which also do cover these Consumable Items by paying higher Insurance Premium or taking Extra Add on Cover for Consumables.
Return to Invoice: In a regular policy, in case of theft or total loss claim, Insured declared value of the car is paid and not the on road price. by opting foe this cover, Insurance Companies pays an amount equivalent to Ex-showroom Cost + Road Tax + Registration Cost of Car.
Garage Cash/Daily Allowance: in the event of claim the vehicle is in the garage for being repaired and insured has to bear the conveyance expense till the time it gets repaired. There are insurance companies which even offer daily allowance i.e Fixed amount (around Rs.500 – Rs. 1000) per day to be paid for the purpose of meeting the cost of hired transport in case of Vehicle meets an accident or stolen.
Engine Protect: Engine is like heart of the car. The Flood Prone Areas or heavy water logging can cause car engine to choke. This phenomenon is known as hydro-static lock. Since the engine is one of the most crucial parts of a car, repairing it is a costly affair. One can take Additional Engine Cover while buying New Car which also cover gear box too
Loss of Personal Belongings: Insurance Company pays for the loss or damage to Insured or their Family members personal belongings. However, it excludes – excludes Money, securities, cheques, bank drafts, credit or debit cards, jewellery, lens, glasses, travel tickets, valuables, manuscripts, paintings and items of similar nature. A Maximum capping amount is there which varies across plans from Rs. 10,000 to Rs. 50,000
NCB Protect: No claim bonus is a reward for those policy holders who have not registered any claims against their car insurance policy in the past. Over a period of time, this bonus can be accumulated to claim a discount of up to 50%. However, even a single claim on your policy can bring this down to 0%. By buying an add-on cover, this can be avoided. Under this add-on, even if you have a claim, subject to a certain sum, NCB earned by you remains protected at the current percentage or at a step down percentage instead of becoming 0% under a normal policy
Key Protect: Insurance companies reimburses for the cost of replacing insured’s vehicle keys which are Lost or Stolen. The covered cost is limited to the money paid to locksmith to produce a new key or even replacement cost of locks, if vehicle is broken into.
Road side assistance: With Road Side Assistance service you can avail the following benefits:
- Flat Tyre Change Arrangement
- Battery jump start
- Arrangement of spare key
- Breakdown support over phone
- On spot technician for Minor Repairs
- Towing of vehicle to the nearest garage on breakdown/accident*
- Arrangement of rental vehicle**
- Arrangement/supply of fuel**
- Accommodation arrangement**
- Message relay- Facilitate passing on urgent messages to relatives/colleagues as needed during emergency
* Free up to first certain kms from breakdown spot. Beyond which chargeable at actual.
** Actual cost to be borne by the insured. Arrangement is free.
Major Exclusions:
- Consequential loss, wear and tear, mechanical or electrical breakdown, failures or breakages
- Damage to tyres unless the motor vehicle is damaged at the same time when the liability of the insurer is limited to 50% of the cost of replacement ;
- Any accidental loss or damage suffered whilst the insured or any person driving with the knowledge and consent of the insured is under the influence of intoxicating liquor or drugs.
- Cost of part/s and allied labour, failure of which led any accident.
- Any accidents outside the geographical area of India
- Driving without valid license for that class of vehicle
- Vehicle not being used as per the regulations of registration
- War and nuclear perils
In this age of advertisements, choosing the right car insurance can get quite tricky. The ideal way to making a right choice is seek advice from your insurance consultant before buying a plan. We at Goodfaith, will help you not only to get the best premium available but also to add valuable riders and benefits to the plan. You can save a huge sum on car insurance premium.