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Read tips on new car insurance before embarking on getting your new car insured

Tips on new car insurance from www.ecardlr.com is designed to help all prospective new car insurance buyers in India. Read, understand, digest and take the right decision. Information that will help you negotiate best insurance premium from the right car / auto insurance providers in India.

 

1.   Car Insurance

Legally, No vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory on our part to get vehicle insured. There are two types of vehicle insurance – “Act only risk” – Policy A (known as Third party risk) and “comprehensive Insurance policy” – Policy B.

2.   Policy ‘A’ (Third Party Insurance)

Policy ‘A’ covers risks required to be covered under the Motor Vehicle Act. It is mandatory that every car owner be covered against Act Risk 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 other would be third parties. For private vehicle 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.

3.   Comprehensive Insurance Policy – Policy –‘B’

A comprehensive insurance policy includes: • Third party cover. • Loss / Damage to vehicle as a result of an accident, fire or theft. • Risk against floods, earthquake, riots and strikes. • Accessories like music system, air-conditioner, etc. can also be covered by paying additional premium. • 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 from the moment the payment of premium is received by the insurance company, and ends at midnight, exactly a year later. The insurance policy can be obtained through an insurance agent or a development officer of the insurance company. Usually, the new car dealer is also an insurance agent. The insurance premium depends on the car’s value, the engine power, its seating capacity, and the value of other accessories like the air-conditioner.

4.   Renewal of Insurance Policy

The insurance policy has to be renewed within the period of validity. Any delay in the renewal of the policy renders the policy invalid and the owner will not be able to avail any benefit of the policy. Also, driving without a valid insurance policy is a legal offence.

5.   No Claim Bonus

Insured owners are eligible for a discount in the premium of a comprehensive insurance policy at the following rate: • 20% for the 1st year. • 35% for the 2nd year. • 50% for the 3rd year. • 65% for the 4th year and afterwards The value of the discount depends upon the insurance claims owners have made in that particular year. This discount is adjusted against renewal premium. Owners can avail the no claim bonus when they renew their policy. In case the policy expires, owner can still avail the no claim bonus if they renew the policy within 90 days of its expiry. Incase owner is buying a new car they can transfer the no claim bonus from the policy of their old car to the new one. Owners need to intimate the insurance company in case they sell their car and they are eligible for the no claim bonus. The no claim bonus is adjusted against the premium of a new car, if the purchase is made within a period of three years.

6.   Transfer of Insurance Policy

In case a person purchase a used car, he can transfer the existing insurance policy to his name by informing the insurance company within 14 days from purchasing the car.

7.   Insurance Claim Procedure

In case of an accident claim, following documents are to be submitted to the insurance company. • Proof of insurance-Policy • Original and a Copy of Registration Book. • Original and a Copy of Driving License of the person driving the vehicle at the material time. • FIR in case of accident involving Third Party injury of Damage. • Claim from along with the original estimate of repairs obtained from the workshop. On Submission of these documents the insurance company appoints a surveyor, who inspects the damaged car and verifies the authenticity of the estimate of repairs. The car can be repaired only after the insurance surveyor has inspected it. Submit the final bill for damaged parts that have been replaced and the stamped receipt for payment made to the workshop. Once the car has been repaired, need to make the payment as per the final estimate and submit the final estimate and stamped receipt to the insurance company for settlement of the claim. The repaired car is surveyed again by an insurance surveyor and only then owner can take delivery of the car.

8.   In Case of a Vehicle Theft

In case car is stolen, need to inform about the theft to the nearest police station and insurance company immediately. Also have to intimate about the stolen car and missing documents to the concerned registering authority where the car was initially registered. 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.

9.   What is Car Insurance?

Car insurance policies cover against any loss or damage caused to the vehicle or its accessories due to the following natural and man made calamities. Natural Calamities: Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide. Man made Calamities: Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any damage in transit by road, rail, inland waterway, lift, elevator or air. Car insurance provides compulsory personal accident cover for individual owner of the vehicle while driving. One can also opt for a personal accident cover for passengers and third party legal liability. Third party legal liability protects against legal liability arising due to accidental damages. It includes any permanent injury / death of a person and damage caused to the property. • Protection from a financial loss arising out of loss or damage to your vehicle. • Protection from liability towards third parties for personal injury. • Protection against death and property damage on account of any accident involving your vehicle

10.   What is Deductible?

In an insurance policy, the deductible or excess is the portion of any claim that is not covered by the insurance provider. It is normally quoted as a fixed quantity and is a part of most policies covering losses to the policy holder. The deductible must be paid by the insured, before he submits his application for the benefits of the policy. In a typical automobile insurance policy, a deductible will apply to claims arising from damage to or loss of the policy holder's own vehicle, whether this damage/loss is caused by accidents for which the holder is responsible, vandalism or theft. Third-party liability coverage generally has no deductible, since the third party will likely to recover any loss, however small, for which the policy holder is liable.

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