Car Insurance or Motor Insurance is a legal requirement by law. If you are driving a car, it is mandatory to cover your car with proper insurance coverage.
Recently, my friend approached me with a car insurance query. His query was – “I lost my car probably it is stolen. I have filed FIR also when I claimed with a car insurance company they rejected my claim saying the car theft was not covered under my insurance policy. Is it correct? I checked his car policy document and found that it was a third-party insurance policy not providing coverage for the 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 ended up paying Rs.15250 from his pocket for the repairing of a car. His car was covered under a comprehensive car insurance plan. However, the insurance company deducted this money because it was not zero depreciation car insurance.
Also Read – How to Choose Car Insurance Policy – Key factors and Riders
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 renew it this post will surely help you.
Car Insurance Policy – Unusual Things You Should Know
No Claim Bonus Transfer
The first thing that you may not know 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 the old company to the new company. Even NCB can be transferred from an old vehicle to a new vehicle. NCB is associated with the policyholder and not with a car.
CNG or LPG kits increase your car insurance premium
The second unusual thing that you may not be aware of is CNG or LPG kit in a car will increase your insurance premium. A car equipped with CNG or LPG kits is classified as a high-usage vehicle and the chances of such a 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.
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, and metal parts of your car attract depreciation. So, if you have not purchased a zero depreciation policy get ready to pay money out of your pocket in case of an accident.
Also Read – Top 5 Car Insurance Companies in India
Comprehensive insurance is mandatory
As per the Motor Vehicle Act 1988, it is mandatory to take third-party insurance coverage for all vehicles 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 cover 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 the terms and conditions 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, and LPG kits if it is insured under the policy. It will not cover any personal belongings kept in a car such as cash or jewelry.
Color does not determine the 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 for a cab or for traveling purposes you should go for commercial vehicle insurance.
In addition to the above you should know that the following things are simply excluded from 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 a car is used for Hire, Carriage of Goods, Organized Racing, Speed Testing, Reliability Trials
I hope the above points about car insurance will surely help you in buying a car insurance policy.
Feel free to post your queries about car insurance.
