In today’s world, either everyone has their own car or will have a new one in near future. But most of us do not have a clear idea of Car Insurance. We just take a Car Insurance to avoid unnecessary harassment or fines from police on the road. Whereas, it does not only cover accidental financial loss but also takes care of unforeseen financial risks like fire, theft, natural disaster, third party accidental damages etc. Again, a good comprehensive Car Insurance can provide Personal Accidental Insurance too.
Now let’s have a detailed idea on some of conventional Car Insurances policies –
Third Party Insurance
According to Motor Vehicle Act 1988, a valid insurance policy is the key highlight. This Act mandates the third-party liability policy, which covers the risk of any damage caused to a third party. It actually covers all financial damages caused to the third party including third party body injury, disability, death, property damage etc. The upper limit is restricted within INR 7.5L where the injured is a non life entity but there are no such limits for human beings.
Standalone Own Damage Insurance
This plan offers you to safeguard the financial aspect of your vehicle against road accidents, natural calamity, theft, fire, flood, earthquake etc. But Third Party Car Insurance is mandatory.
This plan offers coverage against damages to your vehicle from natural calamities like hurricanes, fire, earthquake, man-made events including riots, strike, road accident etc. In addition to this, it covers any third party liability in terms of death, body injury and property damage. Further, you can opt for a Personal Accidental cover too.
Some add-ons are being used to strengthen your protection against financial loss from your car damages. Such as –
- Zero Depreciation Cover
- Return to Invoice Cover
- Roadside Assistance Cover
- Key Replacement Cover
- Personal Accidental Death Cover
- Daily Cash Allowance
- Hotel Benefit Cover
- Engine Protection Cover
- Electric Accessories Cover
- No Claim Bonus, etc
Generally a comprehensive Car Insurance Policy offers many add on as inbuilt features.
Now let me describe the add on, Zero Depreciation Cover which has become very popular nowadays. Many companies call it Bumper to Bumper Insurance Policy. When you avail a Zero Depreciation Insurance, the entire cost is covered by the insurer subject to applicable excess/deductibles. It includes 100% coverage on fiber, metal and rubber parts and etc. which are there in your car.
But it does not cover engine damage due to water ingression or oil leakage. Again, car parts such as clutch plates, tyre, bearings, etc. are not covered under Zero Depreciation Insurance.
There is a limit to the maximum number of zero depreciation claims that you can make over the entire coverage period or one year. The limit is usually a maximum of two claims depending upon company policies. But you can make upto “N” number of claims excluding Zero Depreciation over a one year time period.
Who should opt for a Zero Depreciation Cover add-on?
- New car owners
- Inexperienced or a new driver
- People living in narrow road or in accident-prone areas
- People who have luxury cars which have expensive parts
- People who worry about unwanted Dent
- People who need complete peace of mind knowing that they will not face any financial difficulties in case their car is damaged and requires any repair.
You can only opt for the Zero Depreciation Add-On Cover in your car insurance policy if your car is less than 5 years old. But few companies are offering it till it’s 9 years old.
Frequently Asked Questions
We get a lot of questions asked to us about car insurance. Here we have collected come of the most commonly asked questions and have answered them in detail for you.
1. Who has the cheapest car insurance?
Over 25 insurance companies in India offer car insurance currently. But there are many factors to decide the car insurance premium, e.g. insured declared value, car’s make and model, age of the car, add-on features, place of registration, and so on. Apart from it, there are claim settlement ratios, availability of customer support, availability of add-ons, purchase/renewal procedures which have a massive impact on car insurance prices.
2. What are the worst car insurance companies?
There are no such criteria to define the worst among car insurance service providers. Companies are there to do their own business. If they are not being able to provide the proper services, they will lose their business. Thus, they all do a comparative structure on premium price, cashless facility, and network garages to hold a large portion of the market share. If you are not satisfied with the services from a particular company, you have the option to leave that service provider and choose another one.
3. How much should I be paying for car insurance?
According to Indian Motor Tariff, the insurance premium of Own Damage Cover is being defined by the percentage of Insured Declared Value.
The formula which most of the insurance companies follow is: Own Damage Premium = Insured Declared value x Premium Rate decided by Insurer + any add-ons (Bonus Coverage)) – Discount and Benefits (No Claim Bonus, Theft Discount, and so on).
Again there are many factors to decide the car insurance value, e.g. age of the particular vehicle, car’s make and model, add-on features, place of registration, and so on.
5. Why is progressive insurance so cheap?
Progressive Insurance covers those vehicles that are on the road. Generally, commercial vehicles like trucks, trailers, commercial cars, SUVs are using this insurance facility. Progressive’s price comparison tool allows shoppers to compare their progressive quote against competitors’ rates all in one place.
6. How can I get super cheap insurance?
Car insurance is not an expense. It protects the wealth of car owners. Thus before buying car insurance, a buyer should have a proper comparison analysis on premium according to the features and advantages.
7. Can I get 1-day car insurance?
Yes, a person can purchase car insurance for 24 hrs as well as for a particular short-term period.
8. Which type of car insurance is the cheapest?
Generally, third-party car insurance is the cheapest one as there is a limited variety of features and advantages.
9. How do I know if my car insurance is cheaper?
Before buying car insurance, a buyer should have a proper comparison analysis among various insurance companies on premium according to the features and advantages if he wants to have the cheapest one. But it’s better to do the comparison on benefits rather than price.
If you feel or need to have any advice or discussion on Car Insurance, please do not hesitate to contact us on +91 8881288844 or [email protected].