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    A Walk Through of Motor Insurance

    Published on July 26, 2019

    Motor Insurance Policy protects an individual against any peril. It helps an individual to claim the cost of an unforeseen accident which cause damages to the car. It also covers the damages caused to a third party or property.

    As motor insurance is mandatory in India, everyone should need to have the detailed knowledge about the policy.

    When it comes to buying the motor insurance, you need to consider the type of insurance coverage you will require for your car. It is broadly classified into two types.

    Comprehensive Motor Insurance

    Comprehensive motor insurance policy offers complete protection against the damages caused to your car in an accident. The insurer in this motor insurance policy claim for the damages to your car, third-party legal liability, theft, along with the personal accident coverage. Comprehensive motor insurance also covers for thefts or damages caused due to natural calamities. The coverage can be extended by adding the add-on covers, such as engine protector, accessories cover, medical expenses, zero depreciation cover etc.

    Third Party Liability Insurance

    In third-party insurance, the beneficiary is the third person who gets involved in an accident. The third person can be pedestrians, fare-paying and non-fare paying passengers in a vehicle. As per the Motor Vehicle Act 1988, third-party motor insurance is mandatory in India. In third-party insurance, the motor insurance claim, if accepted, would compensate for the damages and injuries caused by the insured vehicle, to a third-party person or property. It also includes the death of a third party. Unfortunately, this policy does not cover any damages caused to your own car during the accident.

    While buying a motor insurance policy, the premium cost is the major thing to look for. Even during motor insurance renewal, you need to do sound research about the insurance policy premium and the coverage offered. The premium cost of the motor insurance depends upon the Insured Declared Value (IDV) amount of your car, cubic capacity, manufacturing year and No Claim Bonus (NCB).

    The cost of the premium mostly affects individuals with a fixed income. The premium cost of the motor insurance increases, if you tend to extend the cover by adding some add-ons. Add-ons are extra cover in your policy which helps you to protect against the damages in the case of an accident. Any add-on or any modifications to the car increases the premium amount of the motor insurance.

    However, you can also reduce the cost of the premium. By raising the deductible amount, the premium value decreases. To reduce the cost of the premium, you can remove any unnecessary additional covers of the motor insurance.

    A car insurance claim is a process, where the insurance company indemnifies for the damage caused to the car of the insured person. There are two types of claim processes for motor insurance.

    Cashless Claim

    The damaged vehicle is repaired at an authorized garage only in cashless claim policy. And, the insurer settles all the bills of the garage directly.

    Reimbursement Claim

    In this policy, the insured one has to pay for the repairs. Later, the insurer reimburses the amount as per the terms and conditions of the motor insurance policy.

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