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Insurance FAQ's

1. What is car insurance? Why it is important?
Ans: Car Insurance is a protection against losses which arise due to legal claims made by a third party in case of an accident caused by you, or losses which arise as a result of manmade/natural calamities to you, your vehicle and co-passengers.
2. Is it mandatory to have car insurance in India?
Ans: Yes. It is mandatory under the Motor Vehicles Act 1988 to get your car insured as soon as you purchase it.
3. What are the types of car insurance in India?
Ans: There are two types of car insurance: 'Third Party Insurance' and 'Comprehensive Insurance'.
Third Party Insurance protects a policy holder against losses which arise due to bodily injury/death to a third party or any damage to property. It is mandatory by law to have Third Party Insurance.

However, this Insurance does not protect you against losses which arise due to bodily injury/death to you, your vehicle and co-passengers. If you want to be compensated for any damages to you, your co-passengers and your vehicle in addition to third party coverage, it is advisable to purchase Comprehensive Car Insurance.

4. Which is a better policy between Comprehensive or Third Party policy?
Ans: Comprehensive Car Policy is better, as it provides both third party coverage and damages/losses to one's own vehicle, co-passengers or self.
5. What is required for car insurance?
Ans: You must tell your insurer everything that is relevant to your insurance. If you do not, you risk having your policy getting void or being uninsured, without any cover. Insurers need to know your details, your driving history, car user, car details and location.
6. Why do premiums vary between insurance companies?
Ans: Insurance companies work with different statistics and use different methods to calculate premiums. Some companies are specialised in certain areas or types, and so, are prepared to give discounts in those areas. This adds to the complexity as various companies yield varied prices.
7. What factors determine the premium amount?
Ans: a.    Make and model of the vehicle
b.    Year of manufacture
c.    Place of registration
d.    Current showroom price of the vehicle
e.    Whether client is an individual or a corporate
The principal insurance amount and its subsequent premium also vary according to the price of the vehicle.
8. What if I do not receive an Insurance Certificate right away?
Ans: If you do not receive your Insurance Certificate right away, you will receive a Cover Note. It is a temporary insurance document establishing proof of Insurance, which allows you to register your vehicle with it.
The Cover Note is valid for 60 days from its date of issue, after which it is replaced by the actual policy document and certificate.
9. What does the Legal Liability cover for a paid driver?
Ans: Legal Liability covers the legal compensation that might have to be paid if a third party files any case against the driver for damage, loss or fire. The driver is covered for a sum equal to his salary for the policy period. It also covers accidents and occupational diseases.
10. Can I take a policy for a vehicle belonging to someone else?
Ans: Yes. The person buying a policy need not be the owner; anyone can purchase insurance on behalf of the insured.
11. Can I renew my motor policy online?
Ans: Yes, provided it is renewed between the period starting 2 months before expiry and 6 days after expiry of the previous policy.
12. What if the accident takes place in a city other than where the motor insurance policy was issued?
Ans: It does not matter where the accident takes place. If your motor insurance policy is in effect, you remain insured throughout the country.
13. Will the insurance company pay an advance on the basis of a damage estimate?
Ans: This practice varies from company to company. Most companies offer a cashless claim service whereby you do not have to pay for the repairs; the company handles them directly. In case you choose the non-cashless service, you are reimbursed once all the repairs have been completed and the bills have been submitted to the insurance company. In such cases, if you are unable to pay the entire charges, you need to inform the insurance representative and the insurer will make the balance payment.
14. What are the important vehicle documents?
Ans: Certificate of Insurance proves that the vehicle owner has valid car insurance. You can claim insurance only if the vehicle is registered to you, i.e. you are the owner of the vehicle. The insurer has to be intimated to make the endorsement accordingly. If the certificate is defaced, mutilated or lost, you can get a duplicate certificate by paying a fee and producing an affidavit stating the need for the duplicate.

Driving License proves that the driver is authorised to drive a particular type of vehicle. Further it is a penal offense to drive without a valid license. If you are just learning to drive, you must have a learner's license.

Certificate of Registration proves that a motor vehicle has been duly registered to you in accordance with the Indian Motor Vehicle Act, 1988. You are required by law to carry the Registration Certificate or an attested copy in your vehicle at all times.

15. What does car insurance not cover?
Ans: Car Insurance does not cover consequential loss, depreciation, wear and tear, mechanical and electrical breakdown, war perils, drunken driving or vehicle driven by someone else other than the driver stated in driver's clause. The insurance also does not cover failure or breakage when the vehicle is used outside the geographical area.
16. What is Voluntary excess?
Ans: Voluntary excess is the client's option to opt for bearing a certain amount of loss from every claim. When the vehicle owner opts for this option, insurance companies allows discount on the premium.
17. What is No Claim Bonus (NCB)?
Ans: No Claim Bonus is a reward that is given to you, for not taking a claim in your last policy period. Discount % is mentioned below-

 

NCB Slabs

Years

Slabs *

1

0%

2

20%

3

25%

4

35%

5

45%

6

50%

It is recommended to check your NCB before taking an insurance claim.

*On each slab, the insurer gets the specified % of discount on Own Damage Premium.