Dummies Guide for Car Insurance

A] Motor Insurance- Significance
Traffic injuries and fatalities Road accidents take a toll of 1.2 million people every year and injure about 35 million a year. Thus, Indian government has made it mandatory to have motor insurance, if you are riding on Indian roads.

Motor Insurance protects your car and helps you in coping with the expense of accidents, damage or theft. While you are driving, you are not only responsible for yourself but also the safety of, your passengers, other drivers on the road, other people’s property and pedestrians on the road. The law mandates that every owner of a motor vehicle must have a motor insurance policy. The insurer’s liability is lower in private vehicles than in commercial vehicles, where the third party liability is huge.

The policy excludes mechanical breakdown, wear & tear, consequential loss, depreciation, deliberate accidental loss, intoxicated driving and any other contractual liablility. Your motor insurance cover allows use of your car for social, domestic and pleasure purposes, commuting to and from a permanent place of work and allows personal business use for you and your spouse. You are not covered to use your car for commercial travelling

There are two types of motor vehicle insurances - "Motor Policy A" (also known as third party risk) and "Motor Policy B" (also known as comprehensive insurance policy). Although legal requirement is met by Motor Policy A, it would be sensible on your part to go for comprehensive insurance policy.
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B] 1.Coverage under the Third Party Risk plan

Third Party risk policy covers risks required under the Motor Vehicles Act. It is mandatory that every car owner be covered against Act Risks under Section 146 of Motor Vehicles Act 1988.

The scope of cover is to pay compensation for death of or bodily injuries to third parties and damage to the property of third parties. While the Insured is treated as the first party and the Insurance Company second party, all others would be third parties. For private vehicles and cars, the 'Act Only Policy' covers third party property damages only upto Rs. 6000/-. Fire and theft risk can be covered by paying additional premium.

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B] 2.Coverage under the Comprehensive Risk plan

A comprehensive insurance policy includes, Third party cover, Loss / Damage to vehicle as a result of an accident, fire or theft, Risks against floods, earthquake, riots and strikes, Accessories like music system, air-conditioner, etc. can also be covered by paying additional premium and Risk of loss/damage while in transit by road, rail, watercraft, air, elevator, etc.

The insurance policy is valid for one year. It becomes effective when the payment of premium is received by the insurance company.

C] Calculating rates for Motor Insurance Policy
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Insurance companies utilize statistical history to determine the rates needed to cover any potential claims and business expenses. Several factors are used to determine your specific rate, including but not limited to, your age, the make and model of your car, your driving record, the car’s purpose, where your drive, where the car is garaged etc.

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The insurance premium depends on the car's value, the engine power, its seating capacity, type of vehicle, age of vehicle, city of registration, period of coverage, the value of other accessories like the air-conditioner, music system etc.
The Insured’s declared value of the vehicle is to be fixed on the basis of; Manufacturer’s listed selling price of the brand and model, The vehicle proposed for insurance at the commencement of insurance /renewal and Less depreciation for usage. The IDV of the vehicle reduces with age of vehicle.
The value of accessories is calculated on the on the basis of original cost of purchase of the accessory less depreciation for the usage. If your vehicle is fitted with anti theft devices, which is approved by the Automobile Research Association of India (ARAI), a discount on premium of 2.5% to a maximum of Rs 500 is allowed.
The rates vary depending on the insurance company as, an insurance company’s claim experience; the types of people they insure and cost for doing business vary from company to company and may cause rates to differ - even by hundreds of dollars. The city in which car is registered, affects the premium amount, irrespective of where its used and where the insurance is renewed.

D] Documents to be submitted for claims made under the plan

In case of an accident claim, following documents are to be submitted to the insurance company;
a) Proof of insurance-Policy,
b) Original and a Copy of Registration Book,
c) Original and a Copy of Motor Driving license of the person driving the vehicle at the material time,
d) FIR, in case of accident involving Third Party Injury or Damage,
e) Claim form along with the original estimate of repairs obtained from the workshop.

In case of car stolen, you need to inform about the theft to the:
a) Nearest police station
b) Your insurance company.
c) You also have to intimate about the stolen car and missing documents to the concerned registering authority where the car was initially registered.
d) Obtain a duplicate RC Book from the RTO office immediately.

In case of theft, the procedure for the insurance claim is similar to the accident claim, however, in case of theft the settlement of insurance claim takes longer as the RTO and the police is given a reasonable period of time to recover the stolen vehicle.


E] Claims made under the plan

On submission of documents the insurance company;
a) Appoints a surveyor, who inspects the damaged car and verifies the authenticity of the estimate of repairs.
b) The car can be repaired only after the insurance surveyor has inspected it.
c) Submit the final bill for damaged parts that have been replaced and the stamped receipt for payment made to the workshop.
d) Once the car has been repaired, you need to make the payment as per the final estimate
e) Submit the final estimate and stamped receipt to the insurance company for settlement of the claim.
f) The repaired car is surveyed again by an insurance surveyor and
g) Then you can take delivery of your car.

The costs that you have to bear at the time of claim are compulsory deductibles, salvage value and cost of depreciation.

F] Best Motor insurance for Indian Roads
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We would recommend comprehensive policy or an all inclusive policy. This form of insurance coverage is the one that pays for damages to your car that happen for reasons other than a collision, including theft, storm damage, fire and vandalism.

This coverage will have a deductible attached, and the rate of the car insurance coverage goes down as the deductible goes up. This type of insurance coverage will be required on any loan you may have on the vehicle.

G] Best Buy on http://www.insurancemall.in/

www.insurancemall.in, is a specialised insurance vendor who have sophisticated interface on the Web, which allow visitors to view brochures, compare policies and even buy the policies directly using a credit card. The site provides extensive listing of policies and has an “insurance comparison” tool that takes the user go through a set of questions before suggesting suitable policies that can be bought directly using a credit card..

Shop for the best Motor Insurance Policy on http://www.insurancemall.in/ and look for the best features and not just the cheapest price. The website currently offers 99 per cent of the complete Personal Lines range making it one of the most comprehensive website across the world.

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