Cars

Car Insurance Buying Guide







Insuring your vehicle is a legal requirement apart from various benefits it provides.

Individuals and corporate owners of the private vehicles and the financier of the vehicles can insure a car.

BENEFITS

  • Covers risk towards yourself and your own vehicle
  • Covers the financial liability that may arise from an accident in which the other party is injured.
  • If any major accident involves hospitalisation too, the expenses can be dealt by insurance.

RISKS INSURED

Depending on the specific policy you take, these may be the risks that may be insured.
    • Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act.
    • Riot and strike; terrorism; earthquake; flood, cyclone and inundation.
    • Whilst in transit by rail, road, air, elevator, lift. Perils under 1(b) can be deleted and a discount in premium availed.
Generally, policies do not cover the following:

INSURED'S DECLARED VALUE (IDV)

All cars are rated on the basis of cubic capacity. The advanced technology and safety features of your vehicle are not taken into consideration. Your vehicle’s insured value is determined on the basis of the insured’s declared value (IDV), which specifies the percentage of depreciation. This means indemnity for total loss/constructive total loss is based on IDV, earlier the market value was used for this.

What is Insured’s Declared Value (IDV)?

For the purpose of Total Loss/CTL Indemnity and for Premium computation, IDV will be the Sum Insured. It will be determined and fixed at commencement or each renewal of your policy.
Fixing IDV
For the purpose of fixing the IDV of the vehicle, the reinstatement value of the brand and model of the vehicle (with side car (s) and /or accessories if any fitted to the vehicle but not included in the manufacturer’s list of selling price of the vehicle) including the road tax paid, proposed for insurance at the commencement of insurance/renewal period should be adjusted for depreciation. The age of the vehicle will be considered at the time of insurance/renewal.

Here is the schedule of depreciation for IDV Private Cars/ Motorised two wheelers :

Age Depreciation
Percentage (%)
Not exceeding 6 months
Nil
Exceeding 6 months but not 1 year
10
Exceeding 1 year but not 2 years
15
Exceeding 2 years but not 3 years
25
Exceeding 3 yrs but not 4 yrs
30
Exceeding 4 yrs but not 5 yrs
35
Exceeding 5 yrs but not 10 yrs
45
Exceeding 10 yrs
50

Following is the Schedule of depreciation for IDV Obsolete Model of Private cars and Motorised two wheelers.

Age Depreciation
Percentage (%)
Not exceeding 6 months
5
Exceeding 6 months but not 1 year
15
Exceeding 1 year but not 2 years
20
Exceeding 2 years but not 3 years
30
Exceeding 3 yrs but not 4 yrs
35
Exceeding 4 yrs but not 5 yrs
40
Exceeding 5 yrs but not 10 yrs
50
Exceeding 10 yrs
55

CLAIMS

In case of claims the maximum liability will be the sum the vehicle is insured for or the insured's declared value which will be the amount payable in case of total loss or constructive total loss (CTL) irrespective of the market value of the vehicle. also in case repair costs go over 75 percent of the IDV it will be taken to be a CTL.

If you have an anti-theft device installed in your vehicle, you'll be eligible for a discount on your insurance premium. There are two kinds of Motor Vehicle Insurance:

TYPES OF MOTOR VEHICLE INSURANCE

Motor Policy A

"Motor Policy A" (Third Party Risk) the 'Act Only Policy' covers third party damages up to Rs 6000/- only. Risk from fire and theft requires an additional premium.

Motor Policy B

"Motor Policy B" (Comprehensive Insurance Policy) protects you from the following eventualities: The insurance policy is valid for a period of one year. If you do not make a claim during the policy period, you are eligible for a discount, which is adjusted against the renewal premium. In case your policy expires, you can still avail the no claim bonus if you renew the policy within 90 days of its expiry.
The following rates of discount apply:First year - 20%
Second year - 35%
Third year - 50%
Fourth year onward - 65%


This insurance policy does not cover these circumstances:

STEPS TO CLAIM INSURANCE

You will need the following documents to submit to the insurance company: Once you submit these documents, the insurance company will inspect the damaged car and authenticate the estimated cost of repairs. Once the surveyor has completed the inspection, the car can be repaired.

Present the final bill for the repairs and a stamped receipt from the workshop to the Insurance Company for settlement of the claim. An insurance surveyor will once again certify the repaired car, after which, you can take delivery of it.

STOLEN CAR

If your car is stolen follow the following procedures if you have theft covered in your insurance:

When you realise your vehicle has been stolen, inform the police immediately. Also inform your insurance agent.
Chances are you may have also lost your Registration Book too (if you carried it in your vehicle always). In such a case obtain a duplicate one from the Transport Authorities immediately.
Keep in touch with the nearby police to know the progress of the investigation.
If your vehicle has not been traceable for a reasonable period of time get a report from the police stating so.
Once your vehicle is traced immediately inform the insurance company.

Requirement For Claims: