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 | Auto insurance is a contract between you (the vehicle owner) and the insurance company which typically provides coverage for Property-damage or theft of the vehicle, Liability- your legal responsibility to others( property and bodily harm) and Medical coverage which pays for the cost of treating injuries, rehabilitation etc. |
Motor Insurance - Features and Benefits
Driving your vehicle without Motor Insurance is a legal offence & you may be fined for it as it is mandatory to have Motor Insurance. There are two variants of Motor Insurance first is the Liability Insurance (also called Third Party Policy) covering bodily injury to the third party & the second policy is Comprehensive Policy which covers loss to insured’s vehicle in addition to the Third Party insurance. It is mandatory to acquire the Third Party Insurance.
1. Damage to vehicle:
Motor Insurance covers you against any loss or damage causing by the following:
Natural Calamities:
Fire, explosion, self ignition or lightning
Earthquake (fire and shock damage)
Flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, and frost.
Landslide and rockslide.
Man made Calamities:
Burglary housebreaking or theft,
Riot and strike, malicious act, and
terrorist activity
Whilst in transit by road, rail, inland-waterway, lift, elevator or air
2. Third Party Liability:
It covers any damage or loss to the third party in terms of injury or damage caused to the property.
3. Add on Covers:
You can extend your policy by paying the extra premium & covering the following risks:
Damage to the Electrical / Electronic fittings not part of standard equipment of the vehicle such as stereos, fans, air-conditioners etc.
Damage to the CNG/LPG Fuel Kit System
Personal accident cover under private car policies for passengers & paid driver
Legal liability to employees while traveling or driving (not as paid driver)
No Claim Bonus:It is a kind of discount given on the renewal of the policy when the insured doesn’t make claim in the earlier year which is given on the own damage component of the premium. If the insured makes the claim then the No Claim Bonus will be zero for the next renewal. This discount could be as high as 50%.
You will get 20% discount (NCB) for not making claims in the first year; 25% in the next second year, 35% in the third year, 45% in the fourth year & it exceeds to 50% in the fifth year for not making claims.
- The insured will get discounts on the premium paid when he/she will choose for Voluntary Excess in addition to Compulsory Excess. The Excess is defined amount of loss which the insured has to bear in every claim he/she makes.
- The insured who s the member of Automobile Association in India gets discount to 5% on premium.
- The insured also gets a discount if there is an anti theft device fitted to their vehicles & which are approved by Automobile Research Association of India (ARAI). To list out the anti theft devices eligible for premium discounts, the insured must check with various insurance companies.
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