The Insurance Regulatory and Development Authority (IRDA) has drawn up guidelines that the general insurers offering motor insurance should adhere to at all times. It is also mandatory for all the vehicle owners to have a motor insurance policy and adhere to the guidelines set by the IRDAI. As per the Motor Vehicles Act, it is mandatory for vehicle owners to at least have a third-party liability cover, in case anyone is seen driving a vehicle without a valid motor insurance plan, he/she be penalised. An insurance certificate will be issued by the insurer to the insured after a policy purchase or policy renewal has been made.
A motor insurance policy covers the following:
The insurance firms in India offer two types of motor insurance plans:
Under this policy, third-party liabilities incurred as a result if a mishap is covered by the insurer.
A comprehensive motor insurance policy covers third-party as well as own damage liabilities incurred at the time of a mishap.
Comprehensive cover is an extensive cover and covers the liabilities incurred due to the following:
|Natural Disasters||Man-made Disasters|
|Rockslides/Landslides||Self-Ignition Strikes/Riots/Terrorism/Malicious Acts While the vehicle is in transit through any means of transport Accidental External Sources|
Any motor insurance policy comes with certain exclusions, the insurer will not cover your liabilities under the following circumstances:
The sum insured for the own damage cover depends on the present market value of the vehicle minus the depreciation value based on the vehicle’s age. The sum insured is called Insured Declared Value or IDV of the vehicle.
For third-party liability insurance cover, the insured sum is determined as per the Motor Vehicles Act of 1988 which also includes a personal accident cover for the injuries to the car owner. You can also add few inclusions to your insurance policy such as cover for the driver, cover for the passengers, etc.
The below table exhibits the customer turnaround time as approved by the IRDAI:
|Insurance Process||No of Days|
|Issuance of policies. Processing of policies. Cancellation of policies.||15 days|
|Issuance of proposal copy.||30 days|
|Services after the issuance of policy. Refund of proposal deposits. Non-claim requests.||10 days|
|Submission of survey report.||30 days|
|Addendum report for the insurer.||15 days|
|Claims settlement after the addendum report has been received. Claims rejection after the addendum report has been received.||30 days|
|Acknowledgement of grievances.||3 days|
|Resolution of grievances.||15 days|
There are a number of factors that affect the motor insurance premium. Insurance premiums differ from insurer to insurer. It is vital that you compare different insurance policies available in the market and choose the one that serves your insurance needs and is financially affordable. Opting for a higher deductible will lower your insurance premium.
A few of the factors that determine your insurance premium are:
The insurance premium for own damage coverage is decided after getting approval from the IRDAI. The premium for own damage cover will be determined based on a number of factors such as age of the vehicle, discounts on the insurance premium offered by the insurer, valid document submission, claims and driving history, IDV of the vehicle, etc.
The insurance premium for a third-party liability coverage is determined by the IRDAI. In case it is found that there is a break in insurance, your vehicle will be re-inspected by an authorised surveyor sent by the insurer and you will be liable to pay additional charges to procure the insurance.
In case you decide to install a CNG/LPG kit in your car, you need to inform your insurer and the Road Transport Authority (RTA) office in order to make the change in the registration certificate as well as the insurance policy document. As installing a CNG/LPG kit is a premium bearing endorsement, you will be charged extra for the same.
In order to lower your car insurance premium, you can avail any of the insurer approved discounts depending on the coverage you are opting for, a few of them are listed below:
NCB is a discount on the insurance premium awarded to the insured by the insurer for every claim free year. You can accumulate the NCB for a maximum of 5 years starting from 20% to a maximum of up to 50%.
Any motor insurance in India is generally valid for a period of one year. In case you do not renew the insurance policy, a re-inspection of the vehicle will be conducted and you will have to pay for additional premium for the same. In case you have NCB and you fail to renew your insurance policy within 90 days of your policy expiry, you will lose your No Claim Bonuses.
Deductibles/excesses in motor insurance are of 2 types, voluntary deductible and compulsory excess. Voluntary deductible is where the policyholder volunteers to pay a part of the insured sum at the time of the claim settlement. Compulsory excess is a part of the insured sum that is mandatory for the policyholder to pay as per the agreement with the insurer.
There were some changes to the existing rules and regulations implemented by IRDA. Some of the changes are:
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