Car Insurance or Motor Insurance is a legal requirement by law. If you are driving a car it is mandatory that your car is covered with proper insurance coverage.
Recently I was approached by my friend with a query related to car insurance. His query was – “I lost my car probably it is stolen. I have filed FIR also when I have made a claim with car insurance company they rejected my claim saying the theft of the car is not covered under your insurance policy. Is it correct? I checked his car policy document and found that it was third party insurance policy not providing coverage about a theft of the car. So I explained to him why they rejected his claim.
In the second incident which was reported long back, a policyholder has ended up paying Rs.15250 from his pocket for the repairing of a car. His car was covered under comprehensive car insurance plan. However, the insurance company deducted this money because it was not zero depreciation car insurance.
These two incidents indicate that awareness about motor insurance is very low among policyholders. So, in order to help them, here is a list of things one should know about car insurance policy. I am sure that if you are planning to buy a motor insurance policy or renewing it these post will surely help you.
Car Insurance Policy – Unusual Things you should know
You can transfer No claim bonus from old car to new car
The first thing which you may not be knowing is you can transfer your No claim bonus when you change your insurer. Suppose you have not made any claim in the previous year and you are eligible for NCB (No claim bonus) in the next year. Next year if you decide to change your insurance company you can transfer your NCB from old company to new company. Even NCB can be transferred from old vehicle to new vehicle. NCB is associated with policyholder and not to a car.
CNG or LPG kits increase your car insurance premium
The second unusual thing which you may not be aware of is CNG or LPG kit in a car will increase your insurance premium. The car equipped with CNG or LPG kits is classified as high usage vehicle and chances of such vehicle being involved in accidents are very high. So, if you are planning to install CNG or LPG kit in your car get ready to pay more money for car insurance.
One should buy Zero Depreciation car insurance policy
As and when you are buying a car insurance policy make sure to go for Zero Depreciation policy. The plastic, fiberglass, metal parts of your car attract depreciation. So, if you have not purchased zero depreciation policy get ready to pay money out of your pocket in case of an accident.
Comprehensive insurance is mandatory
As per the Motor Vehicle Act 1988, it is mandatory to take third party insurance coverage for all vehicle plying on the roads. It is not mandatory to buy a comprehensive insurance policy. However, it is advisable to go for a comprehensive motor insurance policy.
Comprehensive insurance does not covers everything
Another unusual thing you should know about car insurance is comprehensive insurance does not cover everything. A comprehensive plan also has some limitations and exclusions that will affect your claim. So, make sure to read terms and condition before buying any policy.
Car insurance does not cover all personal belongings in the car
Your car insurance policy covers additional items such as car accessories, music system, GPS system, CNG, LPG kits if it is insured under the policy. It will not cover any personal belonging kept in a car such as cash or jewellery.
Color does not determine price of motor insurance
Your insurance premium has nothing to do with the color of your car. It depends on cubic capacity, year of manufacturing, place or registration and other accessories such as LPG, CNG kits etc.
Coverage for personal usage and business usage are different
The next unusual thing you should know is coverage of personal usage and business usage for car insurance is different. If you are planning to use a car as a cab or traveling purpose you should go for commercial vehicle insurance.
In addition to above you should know that following things are simply excluded in all car insurance policies.
- Normal Wear and Tear and Electrical or Mechanical Breakdowns
- Driver without a Valid Driving License
- Driving the car when you are drunk or influenced by drugs
- When the car is used for any illegal purpose
- When car is used for Hire, Carriage of Goods, Organized Racing, Speed Testing, Reliability Trials
I hope above points about car insurance will surely help you in buying car insurance policy.
Feel free to post your queries about car insurance.