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Motor Insurance, types and features

  • Motor insurance is a vehicle insurance policy for vehicles like trucks, cars, jeeps, bikes, scooters, etc.
  • This policy offers coverage to the vehicle owner/driver against financial losses that may occur due to accidents or other kinds of damages.
  • In addition to the own vehicle damage, motor vehicle insurance also provides the mandatory coverage for third-party liabilities.
  • It is also protect policyholders from incurring any financial losses that may arise due to theft of the vehicle.
  • In layman terms, it is just like any other insurance policy, but it is 'Mandatory'!
  • You can purchase a suitable vehicle insurance policy that protects all kinds of vehicles in worst-case scenarios.
    Be it fire, burglary, vandalism, earthquake, flood, storms, or accidents; you can feel secure under all circumstances.

Why should you buy Motor Insurance?

It is the Motor Vehicle Act that specifies the rules and regulations regarding driving in India.
We know that owning motor vehicle insurance is mandatory for all drivers and vehicle owners, considering the number of accidents that take place annually in the country.
Hence, it reduces your liability.
For example, if you happen to cause an accident that results in damages to another person's property or injuries to another driver/pedestrian, the insurance will pay for their treatment and save you from the legal repercussions of the case.

What are the features of Motor Insurance?

A Motor insurance policy is composed of numerous features that are beneficial not only for the vehicle owners but also for other parties.
The insurance companies allow a vehicle owner to keep their customers and others safe on the road by providing the following features:

  • No Claim Bonus(NCB) allows a vehicle owner to file a claim at any time and even offers transference to other insurers.
  • A hassle-free way to acquire motor insurance online with minimal efforts
  • Most companies have a network of garages where you can get repair work done and ask for an evaluation of the vehicle’s condition after mishaps.
  • Renew the insurance online without having to waste your time travelling or filling hard copies of forms.
  • Making cashless claims is also easier by providing sufficient evidence in case of accidents and theft.
  • Get proper coverage against natural and man-made calamities, including floods, earthquakes, theft, accidents, and vandalism.
  • Include third-party liability coverage to compensate for the losses of other parties.
  • All motor insurance companies offer dedicated assistance and customer support service to the customers to keep them updated regarding the motor insurance policy and claim status.
  • Add-on features are also available to allow customers to add coverage in the policy at any point.

How does insurance reduce your financial risk?

Imagine you’re driving your car and you hit a deer, which damages your car. If you have the right kind of auto insurance policy, the insurance company will pay the costs of the car repairs (minus the deductible — the portion you have to pay). Now, imagine a water pipe bursts in your bathroom, ruining everything in that room and in the bedroom next to it. Typically, if you have homeowner’s or renter’s insurance, the insurance company will pay to replace some or all of the damaged property, once you pay your deductible. Insurance policies will only pay for things that are described in the policy. So, it’s important to read a policy carefully before you buy it, so you’ll know exactly what’s covered.

What are the Types of Motor Insurance policy?

There are literally many types, however top 3 are as follows:

  • Car Insurance Policy The ideal choice to secure your private four-wheeler is getting car insurance. It is a contract that is drawn between the vehicle owner and the insurance company that covers both comprehensive policy and third-party liability. With this plan, you will get benefits like:
    1. Cashless claims
    2. Personal accident cover
    3. Loss/damage protection
    4. Unlimited liability for third-party injuries and death claims
  • Two-wheeler Insurance Policy As the name suggests, two wheeler insurance or bike insurance is meant for scooters, bikes and other two wheelers. It is a type of vehicle insurance that will ensure a safe ride as two-wheelers have slightly more risks of personal injuries. The benefits included in the plan are:
    1. Comprehensive coverage
    2. 2/3 years of own damage motor insurance
    3. No claim bonus protection
    4. Inflation protection
  • Commercial Vehicle Insurance Policy The risks of damage to commercial vehicles are more than private vehicles. Hence, commercial vehicle insurance allows drivers to reduce the losses that incur in unfortunate events. It involves vehicles like tractors, cranes, taxies, goods carrying vehicles, passenger-carrying vehicles, etc. The benefits will include:
    1. o Unlimited liability coverage for injury and death claims
    2. o Personal accident cover
    3. o Offers loss and damage protection
    4. o Indemnity for other’s property

What are the Top 3 Motor insurance Companies?

Top 3 best complete Motor insurance Companies:

  • IFFCO Tokio General Insurance
  • Royal Sundaram General Insurance
  • The Oriental Insurance Company

  • What are the Factors to Consider When Choosing a Motor Insurance Company?

    During the purchase, you need to account for the following factors to get the best rates on comprehensive coverage.

    • Explore whether you need comprehensive coverage or third-party liability coverage on an urgent basis. In our opinion, it is always better to go with comprehensive vehicle insurance online.
    • Learn about the add-on features provided by the company and pick the additional coverage that is appropriate in your specific case.
    • Always account for whether the policy you are buying will cover you in case of personal accidents or not.
    • Go through the claim process to figure out how complex the task can be if, at some point, you need to file a claim.
    • : All motor insurance providers have a network of garages where vehicle service and repairs are more affordable than local garages.
      You must consider them as the vehicle will need servicing more frequently as you travel.
    • A car’s value becomes almost half the moment it steps out of the showroom. To maintain the monetary value of the vehicle, you must opt for zero depreciation cover to combat the loss that will result after depreciation.
    • Find out whether the motor insurance providers offer a good No Claim Bonus and other benefits when you need to renew the policy after expiration.
      With each year that you spend without claiming the insurance, the discount for the next year’s plan progressively increases.
    • Only reliable insurers will offer you the best market value of the vehicle after deducting the depreciation amount.
      With this, you can get compensation called Sum Insured in case of theft or total destruction of your vehicle.
    • Never sign any documents without reading and reviewing the policy.
      There are many clauses in the document that might confuse you.
      So, always go through the document carefully and only then finalise the purchase.
    • Ask for detailed specifications for how the company calculates the premiums for your motor insurance online.
      Be aware of the factors that play a role and clear your doubts without hesitation.

    What is Covered under Motor Insurance?

    A Motor insurance plan offers coverage as discussed:

    • Natural Disasters
    • Man-Made Disasters
    • Personal Accident
    • Third-Party Expense
    • Fire Damage
    • Engine Protection
    • Depreciation Protection
    • CNG Kit Cover
    • Accessories Coverage

    What is NOT-Covered under Motor Insurance?

    Always remember your vehicle insurance will not provide coverage in below situations:

    • If the driver is under the influence of drugs or abuse
    • The car/ two wheeler/ commercial vehicle is used for illegal activities or a purpose otherwise stated in the policy
    • Not having a valid driving license
    • Any loss or damage to the insured vehicle if it happens outside India

    Motor Insurance Premium and Premuim Calculator.

    Here are the parameters that will impact the vehicle insurance premiums on both the short-term and long haul:

    • The vehicle’s elemental composition, its type, cubic capacity of the engine, etc., have a direct effect on the motor insurance premium.
    • : Age is related to depreciation value and insured declared value that decreases the vehicle’s value over time.
      The engine type, i.e., petrol or diesel, affects the IDV, increasing the premium.
    • Operating a car in the metro area is expensive due to the increased risk of accidents.
    • Getting comprehensive coverage will cost you more than standalone third-party liability coverage, which leaves you underinsured.
    • Adding security features and cover like zero depreciation, passenger cover, etc., will increase the premium amount.
    • No Claim Bonus: You get a discount on policy premiums if you don’t raise a claim in the previous policy period.
    • You get a choice to opt for the voluntary deductible to minimise the motor insurance premiums by contributing a predetermined amount.
    • Installation of anti-theft devices certified by ARAI will help you fetch better discounts on motor insurance premiums.
    • To reduce the motor insurance premiums, buy a policy from the seller directly instead of going to an agent.
    • Digital-first plan comes with a variety of features at a lower price than the market for new purchase as well as renewal of the policy.

    Though the premium varies with Company, Age, location and many more, you still can get a basic idea by calculating here.

    What are the benefits of Motor Insurance Policy?

    When you purchase motor insurance online, you get to compare different plans in the comfort of your home.
    Due to digitalization, several insurance companies have launched their mobile app to make your buying experience even smoother.
    Since an insurance plan come with validity, the policyholder is required to renew the insurance plan before expiration.
    Renewing the insurance plan online has its own advantages.
    They are as follows:

    • You do not have to pay the fees to any insurance agent as you are doing it yourself.
      You get to choose from multiple add-ons available on the website.
    • You can add as well as remove any particular add-on as per your requirement.
    • You do not have to visit the insurer’s office to get the insurance plan renewed.
    • It saves a lot of your time as you have the option of doing it on your personal computer by visiting the website or on the mobile application of the insurer.
    • When you renew the insurance plan online then you get the option of making the payment online through secure gateways.
    • The insurer issues the updated insurance plan as soon as you make the payment.

    What are the documents required Motor Insurance Policy?

    The documents required to avail of motor insurance online are given below:

    • Proof of Identity (Passport/Driving License/Aadhaar/PAN Card/Government Issued Photo ID)
    • Proof of Address via Passport/DL/Bank or Post Office Passbook/Government Issued Photo ID
    • Recent Passport size photo
    • Driving License
    • Vehicle Registration Certificate

    What are the steps for Renewal of Motor Insurance Policy?

    Renewal step vary from broker to broker, however they don’t differ much. Follow these steps

    • Visit the official website of the broker.
    • Go to the ‘Renew Your Policy’ option on the menu bar and click on 'Motor Renewal'
    • Log in to the website by entering your registered mobile number or policy number
    • Fill up other required details regarding your policy
    • Add/remove any coverage, family member or change the sum insured if desired
    • Make the payment for the renewal premium online via debit card/ credit card/ net banking
    • Once your payment is successful, you will be issued a digitally signed copy of the policy. The policy document can be downloaded and printed anytime.