A general insurance company and a car owner enter into a contract known as “car insurance,” in which the latter agrees to shield the car owner from any financial damages that might result from an unpleasant incident affecting the vehicle. There are three different kinds of automobile insurance policies: Third-Party Car Insurance, Standalone Own-Damage (OD) Car Insurance, and Comprehensive Car Insurance, depending on the extent of coverage. Policyholders should execute their automobile insurance renewal on time in order to continue receiving the benefits of these policies.
Types Of Car Insurance
- Complete Auto Insurance
The most comprehensive type of auto insurance covers both third-party and own-damage damage to the insured person’s vehicle. Under a comprehensive coverage, the insurance provider is responsible for both. The coverage is valid in cases of natural disasters, man-made disasters, self-ignition or lightning, explosion, fire, theft, etc. in addition to car accidents.
- Automobile Insurance for Third Parties
Driving an automobile in India requires having a third-party insurance policy. It is also known as a Liability Only Car Insurance Policy because it is the most fundamental type of auto insurance. In accordance with this coverage, the insurance provider is responsible for covering third-party deaths, permanent disabilities, temporary disabilities, and bodily injuries brought on by auto accidents involving the insured’s vehicle. This plan additionally covers third-party property damage up to a maximum of Rs. 7.5 lakh.
- Auto Insurance for Own Damage
The Standalone Own-Damage Car Insurance Policy was unveiled by the Insurance Regulatory and Development Authority of India (IRDAI) in September 2019. In accordance with this plan, the insured is solely covered for damages to his or her four-wheeler that result from an accident, calamity (natural or man-made), fire, explosion, theft, or other incident. A stand-alone own-damage auto insurance policy attempts to give the insured the freedom to select the insurance company of their choice.
Advantages of Car Insurance
A variety of advantages are available to automobile insurance consumers. The following are the main advantages:
- Maintains Your Legal Compliance
As by Indian Motor Tariff, every automobile owner is required to have at least a third-party car insurance coverage, having car insurance helps you stay legally compliant. Which’s absence is penalised by a fine of Rs. 2,000 and/or up to three months in jail.
- Avoidance of Third-Party Liabilities
A car insurance policy aids in reducing third-party obligations for things like property damage, death, temporary or permanent disability, and physical injury. While there is a restriction on third-party property damage compensation of Rs. 7.5 lakh, there is no such cap on third-party bodily injury, disability, or death compensation.
- Protection from One’s Own Damages
A automobile insurance coverage enables you to protect your finances against the costs associated with your vehicle’s own-damage. Road accidents, natural disasters, man-made disasters, fire, explosions, vandalism, etc. all result in damage that is covered by standalone own-damage and comprehensive automobile insurance plans.
- Protection Against Theft
A car insurance policy also offers protection in the event that your vehicle is stolen. Your insurance provider will give you your vehicle’s Insured Declared Value (IDV), which is the market value of your vehicle, in the event that it is stolen.
- Coverage for Personal Accidents
You can also acquire a personal accident cover with a car insurance policy for up to Rs. 15 lakh, which provides coverage in the event that the policyholder is involved in a car accident and suffers fatalities, physical injuries, or disabilities.
Why Should You Buy A Comprehensive Car Insurance Policy?
Every person who owns a car should buy a full-coverage four-wheeler insurance policy for a number of reasons. Here are the best things about it:
Third-Party Liabilities: If you have comprehensive car insurance, you are covered for third-party liability. This will help you if your car is in an accident that causes damage to someone else. Also, it helps you follow the law by giving you the basic coverage you need to drive a car.
2. Coverage for your own damage: In addition to third-party liability, comprehensive car insurance also covers damage or loss to your car caused by an accident, theft, fire, break-in, man-made disaster, or natural disaster. Also, it pays for damage or loss to cars while they are being moved by train, plane, or other means.
3. Personal Accident Coverage: Comprehensive car insurance plans also include personal accident coverage, which protects against permanent total disability and death caused by an accident. Depending on how many seats your car has, you can pay a certain amount to add more people to this cover.
4. No-Claim Bonus: The No-Claim Bonus (NCB) is one of the best things about full coverage car insurance. Under this benefit, a policyholder who doesn’t make a claim in a policy year gets a discount on the premium for the next year. With each year that goes by without a claim, discounts add up, making car insurance cheaper.
5. Cashless Claims: The cashless claim is an important part of every car insurance policy. Insurance companies that have a wide network of garages all over the country make sure that cashless services are available in all of these places. This makes it easy for policyholders to get the repair services they need without having to pay anything.
Why Should You Renew an Expired Car Insurance Policy Now?
If your insurance for your four-wheeler runs out, you could face legal and financial risks. Here are some risks that come with a car insurance policy that has run out:
1. You could get in trouble with the law if you drive a car without valid insurance. This could lead to fines. If you break the law more than once, you might get a bigger fine or even go to jail. So, if the policy on your car has run out, you should renew it right away.
2. No Coverage and Making a Claim: If your car insurance policy has run out, you may not be covered. This means you can’t ask the insurance company for a claim. So, if your car gets damaged, your insurance company won’t cover the costs, and you’ll have to pay for everything yourself.
3. It takes a long time to renew your policy. If your policy has already run out, the process can be hard and take a long time. If it hasn’t run out yet, it only takes a few minutes. The reason for the delay is that an inspection is needed to renew a policy that has already run out. This could take a while, depending on how busy the surveyor is.
4. Loss of NCB Benefit: If you don’t renew your car insurance plan within 90 days of its expiration date, you could lose your NCB. This can cause you to lose your NCB discount, even if it was only 50%. If it lowered your premium for the next year, this could be a big loss for you.
5. Scope of the Inspection: If your policy runs out, your insurance company might want to see the car before they renew your insurance. This can cause your rates to go up for two main reasons: the cost of the inspection to the company and the fact that your car may not be in good shape or be a risk.
Factors That Affect Your Car Insurance Premium
Here are some of the most important things that affect how much your car insurance costs:
1. Make, Model, and Variant: The brand, model, fuel type, and variant all affect how much a car costs, which means that the insurance company will have to pay more to cover the risk. So, it changes how much the policy costs.
Age of the Car: As your car gets older, its value goes down. This lowers its IDV, which has a direct effect on your premium. Simply put, an old car’s premium will be less than that of a new car.
3. Add-on Covers: You can get more coverage if you add add-on covers to your car insurance policy. But you’ll have to pay a little extra for each add-on cover, which will make your premium go up.
4. No Claim Bonus (NCB): Insurance companies give customers a discount if they go a year without making a claim. This is called the “No Claim Bonus.” This bonus tends to get bigger if you don’t make a claim for a year. This will give you a bigger discount on your next year’s premium when you renew it.
5. Anti-Theft Device: If someone has installed anti-theft devices that have been approved by the Automotive Research Association of India (ARAI), his car insurance premium could be lower because it makes it less likely that his car will be stolen, which in turn makes it less likely that the insurance company will have to pay compensation.
Documents Required to File Car Insurance Claim after an Accident
To file a four-wheeler insurance claim successfully, you require a few documents which are as follow:
1. Car insurance policy
2. Driving license copy
3. Duly signed claim form copy
4. Original repair invoice
5. RC copy of the car
6. Fitness certificate for commercial cars
6. FIR copy, in case of theft, injury or damage to third-party, or accidents
7. Cash receipt and proof of car release
8. ID proof of insured person such as Aadhar card and PAN card