Car Insurance Online: Renew or Buy Car Insurance Policy 2022

The inclusions and exclusions associated with third-party liability insurance are shown below:

For comprehensive car insurance, the inclusions and exclusions are as detailed below:

 

Most insurers offer you the facility to include some excluded events on payment of additional premium. The following coverage can hence be added to the base plan:

• Wear and tear - Losses due to wear and tear are usually not covered under car insurance policies. The IDV of your car is revised downwards on an annual basis to account for depreciation. If you opt for a zero depreciation add-on cover for your vehicle, depreciation will not be considered on the value of the damaged parts. This includes metal, rubber, fiberglass, and plastic parts.
• Electrical and mechanical breakdown - Adding an engine protector cover will ensure that the vehicle is protected against mechanical and electrical breakdown. This is particularly useful for your car if you stay in an area that is prone to flooding.
• Extended accident cover - Personal accident cover is offered for the owner-driver under all comprehensive car insurance policies. However, this cover is not available for the passengers. By paying extra premium, you can add the passenger cover to your base policy. This will offer insurance coverage for the passengers as well.

Insurance companies today offer value-added services such as instant quotes for prospective customers. This helps them understand the exact premium that they will be required to pay for the insurance coverage.

A premium calculator is an in-built tool present on the official third-party insurance websites and official websites of insurers. A premium calculator is used to calculate and quotes the insurance premium instantly.

Auto insurance premium is based on a number of factors, some of which include:

• Year of manufacture of the vehicle - This determines the age of the car. Older cars will have lower insurance premiums in comparison to cars that are relatively new.
• Place of registration of the car - Your residential location and the place where you got your car registered also has an impact on your motor insurance premium. Insurance companies have come up with the concept of ‘insurance zones’, based on the vulnerability of a vehicle to loss or damage while operating in that area. Urban drivers usually pay more for their car insurance than car-owners in rural areas or small towns. This is because the possibility of theft, vandalism, and accidents are higher in the cities.
• Current showroom price - The premium amount that you pay largely depends on the Insured Declared Value (IDV), which is essentially the market value of the car. Therefore, if the cost of the car is high, then the insurance premium will also be on the higher side.
• Model of the car - Imported brands and cars such as high-end sedans and SUVs will be charged more premium than hatchbacks. Similarly, for diesel vehicles the premium is higher than that of petrol cars. If a car has expensive or rare spare parts, the insurance premium of the vehicle will be higher as well.
• Purpose of the car - Car insurance providers offer personal and commercial insurance policies. If a car is used for commercial purposes, it will attract higher insurance premiums.
• Safety devices - Modern cars are equipped with safety features such as airbags, robust locks, advanced braking systems, and anti-theft devices. Insurance companies tend to increase the premiums for vehicles that are more susceptible to damage, theft, and occupant injury. You are eligible get a discount in premium of up to 2.5% if your car is safe. However, the features included in it should be approved by the Automobile Research Association of India (ARAI). Hence, you should research well and equip our car with safety features for reduced premiums.
• Claims history - If you raise a claim against your vehicle insurance, the premium for the subsequent year is likely to go up. If you abstain from raising claims, you will be rewarded with a No-Claim Bonus (NCB) that translates into a reduction in premium for the following year.

Apart from the above factors, your credit history, your driving record, the total distance your car has been driven, and the regularity of your car’s servicing also has an influence on the premium you pay towards auto insurance.

How to Decide on the Right Coverage

When you are deciding on a car insurance policy, you should keep two things in mind:

• Your ability to pay the premium on time - If you have existing loans or any such monetary obligations, you should assess your capacity to meet the premium due for your auto insurance. You should also note that third-party liability insurance is the minimum cover legally. If you opt for anything above this, you should check if you can afford it.
• Additional coverage - You may want to opt for an all-inclusive insurance plan for your car, so that you can avail wider protection. Based on the type of situation you want to cover, the premium amount will vary. The types of covers you can opt for are as follows:
  • Personal injury protection - You can choose to avail protection for yourself or other passengers in the car against injuries/death in accidents.
  • Coverage for being uninsured or underinsured - This covers the expenses incurred if you are hit by another vehicle that is either not insured or underinsured.
  • Collision cover - This offers coverage for repairs done to the car after it was involved in an accident.
  • Cover for car accessories - You can choose additional coverage for protecting your car accessories such as air conditioner or music system.

As the car ages, its value will go down as well. This translates into a lower premium for the vehicle’s comprehensive insurance policy. However, if you have only purchased third-party liability cover, the premium amount will not vary with the age of the car; it depends on the engine capacity that remains constant.

How to Lower your Car Insurance Premium

With the recent GST implementation, car insurance premiums have seen a definitive hike. In order to ensure that you get the best deal on your auto insurance policy, you should keep the following tips in mind:

• Policy lapsation - If your motor insurance policy moves into the lapsed status, you may not qualify for NCB which lowers your future premium. So, ensure that you follow the payment timelines strictly.
• Option of deductibles - Increasing the amount corresponding to voluntary deductibles will reduce your auto insurance premium. However, when you opt for deductibles you should ensure that you decide on an amount that you can pay comfortably at the time of a claim.
• Shop around - Assessing the different car insurance products available to you in the market is a sure-shot way of getting hold of a plan that best suits your needs. You can compare car insurance policies at websites like BankBazaarInsurance absolutely free of cost.
• Decision on the coverage - Usually, auto insurance policies have predefined features. But if possible, opt out of features that you think will not be useful to you. You can save significantly on the premium by doing so.
• Avoid claiming small amounts - Very small claims work against the objective of auto insurance. When you raise a small claim, you stand to lose the No-Claim Bonus that you have diligently accumulated over the years. If you observe 5 claim-free years, you may even get a discount in renewal premium of around 50% through NCB. In the case of some small claims, the final amount claimed may even be lesser than the processing fees and loss of NCB. So, refrain from making small claims to save on renewal premiums.
• Old to new policy - If you are selling an old car, ensure that you procure the no-claim certificate from the insurer. You can reserve this bonus for a few years; so you don’t need to use it with the insurance of a new vehicle immediately. When you eventually buy a new car, you can utilise this benefit to get a reduction in premium on the new car insurance.
• Installation of safety features - Equipping your car with steering wheel locks, anti-theft alarms, air bags etc. could translate into a 5% discount in your car insurance premium. If you are a member of the Automobile Association of India (AAI) or the Western India Automobile Association (WIAA) you can get further benefits on auto insurance.
• Limiting customisations - Customising your vehicle with features such as spoilers, alloy wheels, automotive night vision, etc. may lead to higher car insurance premiums. Hence, it is advisable to limit your customisations as much as possible.
• Loyalty - Most insurers offer discounts to customers who hold multiple insurance policies with the same company. This is a great way to lower your auto insurance premium.

Buying car insurance policies online has become popular in India. The insurers are coming out with more innovative ways to make shopping for insurance an easy experience for the consumers. They have come up with apps for the same. There are several benefits of buying car insurance online:

• Accessible from anywhere

You can access the website or app of the insurer anytime, anywhere. Place and time is not a constraint if you have internet and can visit the site/app from the comfort of your home or any place you like.

• Easy, hassle-free and less time-consuming

The process of availing insurance has become easy, thanks to the websites and apps available. You can log into either, provide the necessary information, get the quote and buy the insurance if everything is okay. The whole process is hassle-free and takes very little time when compared to buying the insurance offline. You don't have to run around for documentation or visit the branch for anything. You can also avail help by chatting with the online assistant who will help resolve your issues, if any.

• Comparing various options

Now you can compare various insurance schemes at your convenience before buying the insurance. You have the luxury to choose the insurance that matches your needs without any fuss.

• Low cost and paperless documentation

When you purchase insurance online, you cut down on your cost when compared to buying insurance offline. The documentation process is paperless throughout. Also, consumers who avail insurance via online modes/online are given certain discounts on insurance premium as paperless documentation cuts down the insurer’s expense too.

• Instant premium calculation and approval

The insurer websites and apps come with a built-in tool called the premium calculator to calculate insurance premium instantly. The policyholder just needs to provide the necessary details and the calculator will do the rest. The insurer can verify the information you have provided online and approve your insurance claim when you raise it.

• Easy endorsements

Insurance endorsement is any change/correction you need to make in your existing policy. It’s easy to make endorsements online whenever you need to.

• Free from agents

You don’t have to deal with insurance agents when you buy the policy, you can directly get all the information you need from the website itself. This safeguards you from fake or fraudulent insurance policies.

• Offers tranperancy

Online offers you process transparency and provides you with all the clauses and other details mentioned in the insurance policy.

• Backup of all policy documents at one place

Every policy you buy is saved under your name in the website. You can access all your insurance data anytime from the website/app.

• Easy and timely policy renewal

Renewing the policy is also easy, less time-consuming and hassle free. Most of the websites or apps have a timely reminder system that alerts you when it’s time to renew your insurance policy.

• Transfer of policy

Transferring the existing or expired insurance to another insurer can be done easily without any fuss.

Misconceptions about Purchasing Auto Insurance Online

There are many who display reluctance in buying car insurance online. The overall lack of enthusiasm can be attributed to several factors.

• Authenticity - All policies that are issued by a licensed broker, insurance company, or web aggregator are deemed authentic, as long as the intermediary is registered with the Insurance Regulatory and Development Authority (IRDA). The IRDA ensures that there is no malpractice involved in policy sales through those channels. So, you can rest assured that your insurance policy will be a legitimate bond.
• Reliability - As indicated above, online sales of all sorts of goods are flourishing in the country. The online mode of policy purchase is considered as a more convenient and cost-effective option. Since you perform banking activities, purchase of airline tickets, and do hotel bookings online, you can be assured that buying insurance packages online is equally safe. Third-party financial aggregator websites have stringent security policies and these comply with global security standards. This ensures that transactions through these websites are absolutely safe.
• Geographical distance - Some users do not prefer to buy insurance plans from online portals, as they fear that the claims process may be difficult to follow-up on. The general perception is that if the insurer is within the city, the claim processing cycle will commence immediately as opposed to an online claim. But the truth is that an online insurance broker would assist you in following up on the claims process and make it so much easier.

You have decided to get your dream set of wheels and are sieving through the discounts offered by manufacturers. You should note that this is the right time to shop for car insurance as well. It is crucial that you buy the right auto insurance policy and add-ons, so that you are adequately covered.

Listed below are few things that you should keep in mind when buying motor insurance:

• Assess the amount of coverage you need - Insurers offer auto insurance plans that provide third-party liability cover and comprehensive cover. Although it is advisable to buy a comprehensive insurance plan, you may opt for third-party liability cover if you deem it appropriate for your needs.
• Check if you need add-on coverage - Even if there is a persistent insurance agent on your heels advising you to buy add-on coverage, you should buy it only if you feel the necessity. For instance, buying a waiver of depreciation cover is useful as it allows the claimant to receive the full claim amount, including the value of metal and plastic parts that have been replaced.
• Be aware of the No-Claim Bonus (NCB) - If you do not make any claims in a policy year, the insurer rewards you with a No-Claim Bonus, which could result in a reduction in premium for the subsequent year. Some insurers offer you discounts up to 50% on the premium payable if you maintain a claim-free streak. This is a significant bonus and should be preserved as much as possible.
• Explore the option of voluntary excess - Voluntary excess is the amount that you will bear from your own pocket in the event of a claim. This amount is agreed upon with the insurer at the inception of the policy. The advantage of opting for voluntary excess is that it would bring down your premium by a good amount.
• Compare policies online before buying - As explained above, it is important that you explore the options available in the market when deciding on an insurance policy. You could even save up to 20% on the premium amount by doing so. You should also be aware of the fact that buying auto insurance online is a cheaper option. It is important to compare the offerings from your car dealer, insurance agent, and online portals before finalising on the plan.
• Check if the insurer is offering cashless claim settlement facility - When picking an insurance company, make sure that it has a good reputation of settling claims on time. Also, ensure that the company is affiliated to network garages where you can avail cashless claim settlement. If you are getting your car repaired after an accident, a cashless process is totally hassle-free; so you should choose that option if you can.
• Make sure you do not nullify the insurance while customising your vehicle - If you choose to customise your car, ensure that the changes do not make the insurance coverage void. You should stick to minimum cosmetic changes, so that your insurance is preserved. Do check with the insurance company on the limits pertaining to customisation.

In an attempt to improve insurance penetration in the country, the government has been encouraging several authorised entities such as online brokers, banks, car dealers, etc. in distributing insurance. In order to understand the distribution landscape better, let us take a look at the main differences between insurance agents, brokers, and car dealers:

Buying car insurance can be a daunting task if you are not adept at choosing the right coverage on your own. If you have a relatively new vehicle, then you will find auto insurance salesmen in plenty who would be willing to assist you in the matter. However, it is important that you choose a policy after good research and consideration.

There are multiple third-party financial websites that enable you to compare car insurance schemes, free of cost. You should use this facility as much as possible and compare quotes from multiple insurers to find out who is putting forth the best deal. When you do online research on the offerings out there, you will be better equipped to make a decision. Online policy comparison is also a faster and more convenient method as opposed to discussion with an agent.

Listed below are some things to consider while comparing auto insurance policies:

• Compare coverage and cost - Generally, car insurance that offers less coverage would be priced lower as well. So, instead of searching for the cheapest car insurance you should look for the most affordable one. The ideal policy would maintain a healthy balance between the coverage offered and the price of the plan.
• Consider the reputation of the insurance company - Assessing the claim history of an insurer is a sure-shot way of understanding its reliability and customer service. You should look for an insurer with a high claim settlement ratio, in addition to experience and a significant presence in the industry.
• Know your policy - Ensure you know everything there is to know about the insurance policy you are about to avail. It is always in your best interest to gather all the available information about the insurance policy you are going to purchase or renew, this way you can avoid buying a policy that doesn’t satisfy your insurance needs. You can visit the nearest branch office of the insurer or visit their official website to gather the required information on the policy.

Add-on plans offer insurance coverage for several events in addition to third-party liability cover and own-damage cover that a standard policy offers. Based on the type of vehicle you own there is a huge potential for you to save money at the time of a claim. Effectively, add-on plans make your auto insurance work better for you.

The motor insurance add-on covers available in India are as follows:

For most, buying a car implies spending a lot of time and effort in narrowing down on the most suitable model. However, not many prospective car owners show that discipline while purchasing an insurance policy for their cars. Most Indian car buyers look to secure the cheapest insurance mandated by law, and in the process they miss out on the most crucial aspects of buying auto insurance. Here are a few mistakes that you should avoid when buying motor insurance:

• Comparing policies online - It is important to compare policies from different insurers to understand the coverage and costs.
• Buying low premium policies - Policies with lower costs also have minimal coverage. You should assess if you would require a comprehensive car insurance cover based on the possible repair and maintenance expenses in the future.
• Bundling insurance for discounts - Some insurers offer additional benefits to customers who opt for health, home, and auto insurance from the same company. This is a great way to save on your car insurance premium.
• Opting for unnecessary add-ons - A standard policy package will come with several add-ons that may not offer the coverage needed for your car. So, you should avoid the temptation to buy unnecessary add-ons with your policy.
• Disclosing driver details and history - Several factors pertaining to the driver and his/her driving history affect car insurance premiums. The driver’s age, history of accidents, safety accessories in the vehicle, usage of the car, etc. are some of the criteria that determine the premium. If you intend to hide a few details to avail low premium, you are actually putting yourself in danger. If the car insurance company finds out that you had not disclosed all facts accurately, the policy may be invalidated.
• Reading the fine print - Once you have decided to buy a car insurance policy, you should carefully read the terms and conditions within to understand the extent of coverage. Otherwise, you would assume that several aspects fall under the coverage, when in fact, they don’t.

Deductible or excess is essentially a portion of the claim amount that will be borne by the policyholder before the policy kicks in and pays out the remaining claim value. Deductibles can be classified into two types, i.e., compulsory and voluntary. The main differences between the two are elucidated in the table below:

Deductibles are part of comprehensive car insurance policies. Compulsory deductibles actually discourage policyholders from raising small claims. A high level of compulsory deductibles also ensures that drivers will focus more on road safety so as to avoid damages to the vehicle and subsequent claims.

Individuals who are confident of their driving abilities or those who are able to pay money without difficulty in the event of an accident can opt for high voluntary deductibles. This will help them save a great deal on the premium.

A number of cars today come with anti-theft devices. With the growing number of robberies, it has become imperative to install anti-theft devices in the cars. Anti-theft devices not only safeguard the cars but also lower the car insurance premium.

There are different kinds of anti-theft devices available and they are categorised as below:

• Keyless lock device

This is one category of anti-theft devices that uses electronic coding to start the car instead of a mechanical key. You can start using the car only after you have provided the numeric code depending on the type of receiver used. If its a keyboard placed near the driver’s door, enter the code using the same and if a sensor is placed near the driver’s door, unlock the car by swiping the chip with the code over the sensor.

• Steering wheel lock

This is another smart device that protects your car from being stolen. As the name suggests, this device locks your steering wheel in a fixed position. No one can use the steering wheel without opening the lock.

• Alarm

This anti-theft device alerts the owner and people near the car with high-pitched sound when the car is being tampered with.

• Electronic Immobilizers

These are built-in transponders that send signals to the fuel pump and ignition system. The car cannot be operated unless the ignition starters are given proper signals.

• Vehicle Tracking

This particular device can be used to track the vehicle after it gets stolen. The device offers real-time GPS location of the stolen vehicle that can help you trace and retrieve the vehicle.

• Gear Locks

This is a device used to lock the gear in your car so that if your car is broken into, the thief will not be able to use the car.

Based on the information given above and depending on the safety factor of the place where your vehicle is being parked at, your affordability, etc. choose a safety device that would protect your car from being stolen or getting involved in a mishap.

Do New Cars Already Have Anti-Theft Devices?

Most of the new high-end cars being launched in the market have some or the other anti-theft device installed in them.

The cashless claim facility was initially a part of the health insurance industry. It has gradually gained popularity and has become an inherent part of the car insurance sector as well. The facility is very helpful to a policyholder who does not have a very high disposable income.

In the event of an accident involving the insured car, the vehicle can be taken to a garage affiliated to the insurance company. Such service centres are referred to as network garages. The repair work done on the car will be completed in an efficient manner and the policyholder is not required to pay the bill. He/she would only have to bear a minimal part of the claim amount that corresponds to deductibles. The final bill is settled between the insurance company and the garage in a quick and hassle-free manner.

Key features and benefits of cashless car insurance include:

• Usually the services offered by network garages are better in comparison to local garages.
• Cashless motor insurance essentially saves you a lot of time and effort and minimises the impact of overwhelming out-of-pocket expenses that come at a short notice.
• When buying a comprehensive auto insurance policy, you should check if the insurer has a list of network garages where you can get your car repaired.
• Some insurers also offer the cashless claim facility to used cars.
• If authorised network garages are out of reach, then you can get the car repaired at a local garage and raise a reimbursement claim for the expenses. This way, you will have to pay for the repair work up front. You will receive the claim amount only after the insurer approves it.
• The list of network garages will be provided on the insurance company’s website. You can also call its customer service helpdesk to identify the network garages in your area.
• The most significant benefit of cashless claim facility is the relief that the insurer will directly handle the expenses without you having to pay up front. Most insurers also offer free pick-up, car wash services, and towing facilities as part of the package.

Buying used cars is a practice that is becoming very popular in the current economic climate. Transferring car insurance is a part of the purchase process of the used car. The good news is that it is not difficult to do.

When you buy a used car you have to transfer the registration certificate. You must treat this as a very important step in the car purchase process. The transfer of car insurance works along with the car ownership transfer. You can request your insurance company to process the car insurance transfer.

The documents required for the transfer of car insurance are mentioned below:

• Old insurance policy document
• A copy of the new registration certificate (Form 29)
• Application form for the new insurance
• No Objection Clause (NOC) from the previous car owner/policyholder
• The difference in the No-Claim Bonus amount
• Inspection report, based on the survey done by the insurance company

The NCB is an important aspect that should be given some thought when you transfer a car insurance policy. NCB is a reward given to the policyholder for observing claim-free years. It is not tagged to the vehicle. So, if you are buying a used car the NCB already accumulated on that car’s insurance policy cannot be transferred in your name. The NCB will remain with the previous owner and can be used by him/her on the insurance of his/her next car.

The old car owner will have to request for an NCB retention letter to the insurance provider so as to preserve the NCB. The following documents will have to be submitted when applying for the NCB retention letter:

• Letter requesting for the cancellation of policy
• Application for the intimation and ownership transfer of the car (Form 30)
• Original copy of the policy and certificate of insurance (Form 51)
• A copy of the registration certificate book that shows the name of the new owner
• Notice that indicates the transfer of ownership of the vehicle (Form 29)
• Proof that the car was delivered to the new owner

Once the car ownership is transferred, the insurance policy held by the previous owner is not valid anymore. It is mandatory that the registration and insurance documents are in alignment at the time of a claim.

In India, the insurance of a used car can be transferred to either a new car owner or to a new vehicle owned by the same person. The procedures and documentation for the transfer is the same in both cases. It is advisable to analyse all documents and procedures ahead of time so that there are no issues during the actual policy transfer process.

As per the guidelines set by the Insurance Regulatory and Development Authority of India (IRDAI), the name of the policyholder and his/her address should be the same in the vehicle registration document and insurance policy document. In case the name and address doesn’t match, your claim will not be settled nor will your liabilities be covered by the insurer.

You need to submit the following documents along with a Rs. 50 transfer fee to the insurer for transferring your car insurance transfer:

• New copy of the registration certificate/form 29.
• Inspection Report (to be carried out by the insurance company).
• Old policy document.
• New application form.
• No Objection Clause (NOC) from the previous policy holder.
• No Claims Bonus difference amount.

Understanding the legal jargons in a car insurance policy document is quite a task in itself. To add to that, if you are faced with car insurance theories that do not sound right at all, you should be equipped to weed out the truth from fiction. Listed below are some auto insurance myths that will set you on the right path:

Myth 1 - Buying car insurance is cumbersome.

Purchase and renewal of car insurance can be done easily online at the insurer’s website or at third-party financial websites. It just takes a few minutes for the process. Some insurance companies today also have the Photo Quote option wherein you can submit a photograph of your current policy document and receive an instant quote for policy renewal.

Myth 2 - Car insurance offers coverage only for accidents.

In addition to accidents, car insurance also covers natural calamities such as floods, earthquakes, lightning, landslides, etc. Man-made disasters like theft, burglary, and damage in transit are also covered.

Myth 3 - The car insurance claim process is very inconsistent.

This is certainly not the case. You can raise claims online in a hassle-free manner. In order to raise a claim, the policyholder will have to log on to the insurer’s website and update a claim form. The progress of the claim can also be tracked online. Within 24 hours of claim registration, the insurance company will get back to you for document submission. You will receive the assistance of the insurer at every stage in the claim process.

Myth 4 - If my insured car is involved in an accident, I can claim for an amount equivalent to the cost of a new car.

No, this is not the way car insurance works. When the insurer calculates the current cost of your car (IDV), the depreciation amount is deducted from its original price. So, the maximum amount that you can receive under the insurance coverage is this value of your car post depreciation.

The insurer makes sure that after you receive the claim amount, you will be in the same financial position as you were in before the damage. This indicates that the principle of indemnity rides on the insurance amount.

Myth 5 - My friend was driving my car when the accident occurred. So, he is responsible for the damages.

This is not true. The owner of the insured car will be responsible for all accidents the car is involved in, irrespective of who was driving it at that point of time.

Myth 6 - My personal belongings inside the car are covered.

In an accident if you incur loss/damage to personal belongings inside the car, you will not receive any reimbursement through car insurance.

Insurance companies spend a lot of money on advertising to lure customers into buying their products. The promise of lower premiums and other benefits may be enticing to the common man. But assess the benefits that you are already enjoying with your current insurer before you think of switching. You may find that the perks of being loyal to your insurance company far outweigh the ones that you are promised by another insurer.

Listed below are some of the rewards that are offered to customers for their loyalty:

• Many insurance companies offer you longevity or tenure discount. This translates into a rate cut for a specific period of time. The amount of time you have to be insured with a company to be eligible for the discount varies. Some insurance providers also offer discounts when customers switch to avail their services. This discount may be more than the loyalty benefits offered by their previous insurance companies.
• Some insurance providers offer accident forgiveness schemes that ensure your premiums are not raised the first time you are involved in an accident. However, there are several other clauses associated with this benefit, and not all insurers offer this facility.
• Some insurance companies are more lenient in the event of minor accidents with longtime customers.
• If a longtime customer is a little late in premium payment, some insurance companies waive penalties associated with the policy revival.

Deciding on whether you should stay with your insurance provider or shift to another company is totally based on what you would gain and what you stand to lose.

An endorsement refers to a correction or change made to the existing auto insurance plan. It is useful in cases where there is a change in the ownership of the car, addition of an LPG/CNG kit, addition of optional covers, increase in base policy coverage, removal or addition of electrical accessories, change in the geographical location, etc. The insurance company would not alter the original policy; instead they would provide an endorsement certificate to the policyholder.

Endorsements can be classified as follows:

• Premium bearing endorsements - This includes the following changes:
  • Correction of the ex-showroom price of the vehicle
  • Transfer of ownership
  • Installation of a CNG/LPG kit
  • Inclusion of Personal Accident Cover
  • Removal of an anti-theft device
  • Extension of the geographical area
  • Installation of non-electrical accessories
  • Installation of electrical accessories
  • Participation in a rally
  • Removal of automobile association membership
• Non premium bearing endorsements - This includes the following changes:
  • Updating registration number
  • Nominee details correction
  • Correction in customer type
  • Correction in customer/corporate name or prefix
  • Correction in customer’s address, gender, or city
  • Alteration of the mobile number and contact details of the customer
  • Changes in lease agreement, hire purchase agreement, or hypothecation agreement

Most car insurance customers switch between insurance companies at the occurrence of any of the following events:

• Experience service that is below par
• Identify an alternate insurer offering a better insurance package or lower premium
• Understand that the current insurer does not offer some add-on covers that the customer needs

Car owners are spoilt for choice when it comes to buying auto insurance. Switching to a new insurance company is a simple process that can be done at any time. You do not even have to wait for the current plan to expire before you change insurance.

You can start by evaluating your insurance needs and then comparing policies online for the best rates and coverage. Once you have a new car insurance policy, you should cancel your old policy so that you do not get penalised for late payments on it.

It is recommended that you shop for auto insurance deals every year. At a minimum, you should look out for better deals in the following circumstances:

• Change in marital status - Once you are married your insurance needs may vary. You may require personal accident cover for the passengers, RTI cover, etc. It is advisable to check the car insurance policies available in the market at this point of time so that you know what you are eligible for.
• New car - The most appropriate insurance company for your old car may not be the best option when it comes to your new car. Insurance providers offer policies based on the make, model, and age of the car.
• Update in driving record - When traffic violations and claims reach a 3-year milestone, it is an ideal time to shop for a better price on your auto insurance. This is because insurance companies usually take your 3-year driving history immediately preceding the application for insurance. So if you have a clean track record for the past 3 years, you may get a better deal on your car insurance with another insurer.
• Improvement in credit score - Car insurance is dependent on your credit score as well. If your score has improved, then you should let your current insurer know. Also, check what the other companies have to offer you at this point.
• Age and experience - When a driver is above 25 years of age, he/she will be eligible for a lower rate on car insurance. Similarly, the driving experience of an individual will also have an impact on the premium. If you have been driving for 5 years or more, lower premium rates are usually available.

When you decide to switch insurer:

After you have analysed the various options available to you, you may decide to switch to a different insurance company. At this time, there are certain things you should keep in mind to ensure that the switching process is smooth:

• Avoid a gap of even a day - You should ensure that there are no gaps between the end of the old insurance and the commencement of the new one. You should ideally cancel your old policy only after the new plan is effective.
• Request for old policy cancellation - You should inform your old insurer that you will be cancelling the policy. Also, if you were paying through ECS, ensure that the payments towards the plan are stopped post cancellation.
• Get refunds, if applicable - If you have prepaid the premium for your old car insurance, you are eligible to get a refund of the premium on a pro rata basis. You may be charged a fee for policy cancellation. So, remember to settle the final amount with the old insurance company after you cancel the plan.
• Carry the new proof of insurance - Once you have a new car insurance policy in place, you should carry the proof of insurance with you at all times.

Things to consider when switching insurers

When you request for cancellation of your old car insurance policy and move to a new insurer, there are certain privileges that you cannot carry forward. This includes the following:

• You may lose the loyalty benefits offered by your old insurance company. This is inclusive of accident forgiveness that some insurers offer.
• Consider that you have a bundled package of car insurance and life insurance with an insurance company. When switching car insurance to another provider, you may have to bear higher rates on your life insurance that is still with the old insurance company. So you should consider shifting all your existing insurance policies to the new company, as you may end up saving more this way.
• Ensure that you are aware of the full impact of shifting insurers, so that you can avoid surprises and have a smooth transition.
• Ensure you compare different insurance policies to find one that fulfills all your insurance needs and falls within your budget.
• Make sure you choose a well reputed insurer to make the policy switch.
• Check for add-ons and additional features offered with the insurance policy.
• Inform the insurer when you decide to make the switch because sometimes in order to retain an existing customer from leaving, insurers tend to offer better discounts and benefits with the insurance policy.

The primary objective of a car insurance plan is to provide you financial protection if any unfortunate incident occurs. When you raise a claim under motor insurance you will be required to furnish your original policy contract. Hence, it is very important that you keep the document safe throughout the policy tenure.

However, if you happen to misplace your car insurance policy document, you have to follow the steps mentioned below:

• Submit an application for car insurance duplicate copy - You should write an application to your insurer with your name, policy number, date of issuance, type of cover, and whether the policy was assigned to another individual. You would also have to elaborate on the circumstances under which you lost the policy document. If the car insurance is held jointly, the application should be submitted jointly by all stakeholders.

Insurance providers usually charge a small fee for issuing a duplicate copy of the policy. This amount has to be paid when you submit the application.

• Put up an advertisement - Some insurance companies require that you publish an advertisement in the leading newspapers regarding the loss of the policy. The advertisement should be submitted to the company as well. The cost of publishing the advertisement is usually borne by the policyholder.
• Sign indemnity bond - You will be required to sign an indemnity bond on non-judicial stamp paper of appropriate value. The bond should include your name and policy number. The indemnity bond should also be signed by two witnesses who are not your family members. Some insurers also insist that a surety bond is submitted.

Once all the necessary documentation is duly submitted, a duplicate of the car insurance policy is issued within a week. The terms and conditions under the plan, nomination, and policy details will remain the same as that in the original policy.

Under third-party liability insurance, a third-party can raise a claim for losses caused by your insured vehicle, such as property damage, injury, or death. The claim for compensation will be filed against your insurer. There is no limit on the liability claim for injury or death. But the maximum limit for liability on third-party property damage is Rs.7.5 lakh.

If you are the third-party claiming damages from the person responsible for the accident, you have the following options:

• In the event of an injury you can raise a claim for medical expenses. This includes claims for physical disfigurement or loss of earnings.
• In the event of death, your dependents can raise the claim. The claim can also include reimbursement of medical expenses incurred for treatment before death.
• If there was property damage, the loss would have to be quantified with the surveyor’s report, motor vehicle inspection record, and the original bills from the garage.

If your claim is successful, you will receive the payment from the other person’s insurance company under his/her third-party liability insurance. Subrogation is the act by which the insurance company of one party, makes payment for accident expenses and claims this amount from the insurer of the other party. Subrogation is possible only with comprehensive insurance, and the insurer can decide whether to go for it or not.

Claim Process for Third-Party Liability Insurance

Raising a claim under third-party liability insurance is a daunting task. There are three steps to this process:

• You should first file an FIR and get a charge sheet from the police.
• Then you should approach a Motor Accident Claims Tribunal through a qualified lawyer.
• The claim will be examined in court and a liability will be fixed.

The complications in the claim process arise when the coverage of both parties are examined. Here, we have listed various permutations of situations when individual X has incurred damages to his car by individual Y’s car in an accident:

GST has been referred to as the largest indirect tax reform in the history of independent India. After the GST implementation on 1 July 2017, in a memorable midnight ceremony at the iconic Central Hall of the Parliament, insurance products have become more expensive. This includes hike in car insurance premiums as well.

As per the previous tax regime, car insurance products were charged service tax at the rate of 15%. Currently car insurance is charged GST at 18%, an increase of 3% in premium. So for instance, if you were paying a premium of Rs.10,000 before 1 July 2017, the service tax on it would have been Rs.1,500. This amount was paid in addition to the actual premium value. After GST implementation, you will be required to pay Rs.1,800 as GST. This implies that you will be paying an additional Rs.300 towards your car insurance policy.

Insurance frauds usually involve raising false claims. However, there have been instances where the policy bought by the customer was fake. This phenomenon is more common in the car insurance domain when the policy was not bought from a registered agent.

It would be very disappointing to discover at the time of a claim that the insurance policy you purchased was a fake one. Let us look at the ways in which you can avoid this misfortune:

• Sign the application form - You should read the terms and conditions in the policy and sign on the application form yourself.
• Get a receipt when buying - The insurance agent who sold you the policy should ideally provide you a receipt for premium payment when you have paid in cash. In case you do not receive it, you should specifically ask for one. It should be noted that some insurance companies do not provide a premium receipt unless it is specifically requested for.
• Pay premium through cheque - Paying premiums through cheques is the safest option to avoid becoming a victim of fraudulence.
• Check NCB, IDV, and deductibles - As soon as you receive the policy document, you should verify the No-Claim Bonus criteria, Insured Declared Value of your car, and the deductibles applicable. This will give you an idea of whether your car insurance policy is genuine or not.
• Get in touch with the insurer - The most simple way in which you can check the genuineness of your policy is by contacting the insurance company. You may have purchased the plan from an agent or a car dealer. You can confirm policy details with the insurance company by sending it an email or calling its customer service desk. Alternatively, you can visit the branch office of the insurer to discuss about your policy.
• Beware of offers with unusually low premium - You should be wary of buying insurance if it is offered to you at a very low premium. Once you receive the policy document, go through the inclusions and exclusions to understand if all your requirements have been recorded satisfactorily.
• QR code - On your mobile phone you can install an app that reads QR codes to verify policy details. The IRDAI has mandated all car insurance policies to have a QR code. When you scan the QR code, you will receive information about the policy instantly.

Consider that you have installed an LPG/CNG kit in your vehicle. Your insurance agent may not be aware of it, and hence, these may not be specifically mentioned in the application form. At the time of raising a claim, you will face difficulties for not having disclosed details about the LPG/CNG kit. Hence, it is important that you read the policy document thoroughly and declare customisations or safety features that you have added to your car.

It is also advisable to buy insurance directly from the insurer or from a reputed online insurance broking company. The advancement in technology has made online car insurance purchase easier and more flexible.

• When you buy auto insurance online, you can read the terms and conditions of the policy and get a printout or screenshot of the purchase receipt. This way, the possibility of fraud is mitigated to a large extent as well.
• Purchasing motor insurance online is beneficial because you know that you are buying from a reputed organisation through a registered website. It is much better than buying from an insurance agent who may be a fraud.

Your car insurance claim also contributes to your car insurance premium. The premium for your car insurance depends on your insurer, the kind of mishap which has taken place and whether your policy has the accident forgiveness facility. It is not necessary that a claim should affect your insurance premium but there is a good chance it will.

Insurers usually consider the below factors to determine your car insurance premium rates:

• The severity of the accident

Your future insurance premium depends on the severity of a mishap. In case your vehicle gets involved in a mishap where it incurs severe damages, the payout made by the insurer will be high to cover such damages, which would motivate the insurer to charge you higher for your insurance policy prior to your policy renewal.

• The at-fault driver

In most of the cases, if the mishap was your fault, you will be charged a higher premium by the insurer otherwise your premium will remain the same. However, there are certain exceptions for such cases, a few are mentioned below:

• A few insurers will increase your premium based on the fact that statistically there is a high chance if you getting involved in another mishap which would cost the insurer dearly.
• In case you live in a no-fault state, your insurer will most likely increase your insurance premium regardless of who caused the mishap.

• Your value to the insurer

If you are an experienced driver with an equally good driving record, you are most likely to be a valuable customer to the insurer as the insurer won’t have to shell out money on you. In case you don’t have a good driving record and have raised claims before, insurers may tend to value you less because you are prone to get into accidents that results in the insurer paying for your liabilities depending on the severity of the incident. The premium for such drivers will be higher than that of experienced drivers.

• Type of mishap

In case your car gets stolen, you will be charged a higher insurance premium by the insurer as the insurer will have to pay your claim for stolen vehicle.

• Your insurance firm

Every insurer is different from another, hence, each insurer will have a set of guidelines for determining the car insurance premium rates, any change to your insurance premium will primarily depend on your insurer.

• Accident Forgiveness Policies

Few of the insurers offer accident forgiveness feature in the insurance policy. Under this feature, drivers with a good driving record can be involved in one accident without it resulting in an increase in premium post claim settlement.

1. What documents should always be available in the vehicle for ready inspection?

   When driving on Indian roads, it is important to carry the following documents:

   • Registration Certificate of the car
   • Certificate of Insurance of the vehicle
   • Driver’s license
   • Certificate of emission test, i.e., Pollution Under Control (PUC) Certificate
   • If the vehicle is used for commercial purposes, you should also have the Certificate of Fitness and required permits

   Usually, it is sufficient to carry the photocopies of the above documents. In case you are travelling outside the state of registration of the vehicle, you should carry the original documents.

2. Why car insurance premiums differ from company to company?

   Car insurance premiums vary based on different factors, and each insurance provider has its own yardstick for determining it. The premiums basically depend upon the insurer’s assessment of how risky the driver is, the cost the company incurs while conducting business, and the amount of claims the insurer would pay out during a financial year. Other factors that insurers use to determine the premium are:

   • The driving record of the applicant
   • The applicant’s age
   • Model and make of the car
   • Location where the car is usually parked
   • Location where the car is driven most of the time
   • Credit rating of the applicant
   • Claims history of the customer

   Insurers attribute different weightage to these deciding factors. Since every insurance provider rates a driver’s risk according to its own criteria, the quotes may vary significantly.

   Some companies may offer promotional rates to customers from time to time. This will also reduce the premium by a substantial amount.

3. I have shifted to a new place. Is it necessary to update my address on my car insurance? How do I do it?

   You would have to inform your car insurance provider of the change in address. The insurer will not change the address in the original policy. Instead, it provides you an endorsement certificate. This would fall under the category of non premium bearing endorsements.

4. I am eligible for a No-Claim Bonus (NCB). But I earned it when I went abroad. Can I still avail it?

   If your car insurance policy is in-force and you have observed a claim-free year, you are eligible for a No-Claim Bonus. Using this bonus, you can get a reduction in premium for the next policy year. If you plan to sell your car, you can get an NCB retention letter from the insurer that will preserve the NCB for 3 years. Within this time, you can use it on the insurance of another vehicle that you own.

5. My car insurance policy application was rejected. What do I do?

   Car insurance applications are rarely rejected. Usually the insurer will offer you a policy with modified terms at an extra premium. If the customer suffers from a serious illness that is not permanent, the insurer may request him/her to submit the application after a few months. The policy will then be offered at a higher premium as well.

   In case an insurer has rejected your application, it is unlikely that another company will approve it. When you apply for a car insurance policy, the application form itself will have a column where you will have to update whether you had applied for a policy before and if there were any instances of rejection. In case the second insurer approves your policy application, you will be charged a premium that could be two to three times higher.

6. How do car insurance payments work?

   When you purchase motor insurance, you will have to pay the premiums on the due date. Most car insurance companies offer flexible payment options that will be suited to everyone’s budget. If you are unable to pay the full amount in one go, you can opt to make regular payments at monthly, quarterly, or half-yearly frequencies. When a premium payment is due, you will be notified of the due date and payment amount. Some insurance providers offer you the option of paying online. This way you can benefit from not having to pay the service fee.

7. How are car insurance claims paid?

   There is no set rule on how auto insurers process claims, so the procedure may differ greatly. However, most insurers undertake the following steps when processing claims:

   For cashless claims:

   • You should contact the insurance company as soon as the accident occurs.
   • Your car will be towed to a network garage in the vicinity.
   • A representative from the insurance company will assess the damage to your car. The network garage will also provide an estimated cost for repair.
   • Based on the type of coverage you have, you may receive a rental car while your vehicle is being repaired.
   • The final cost of repair will be communicated to the insurer by the garage. The amount will be settled between the insurance company and the service centre. You may have to pay a part of the claim amount corresponding to deductibles, based on your car insurance coverage.

   For reimbursement claims:

   • You will have to intimate the insurance company as soon as your car meets with an accident.
   • You should also gather enough details from the accident spot, so that you can justify your reimbursement claim.
   • The insurer will examine the damages incurred by your vehicle.
   • You should pay the garage for the repair work after it is completed.
   • Collect the bills so that you can raise a claim.
   • Submit the bills and all other relevant documentation to the insurance company for reimbursement.
   • The insurer will examine all aspects of the claim and revert with payment, if your claim is valid.

   In both the above cases, it is crucial to file an FIR after the accident and submit it to the insurer to support your claim.

8. How do car insurance companies make money?

   In auto insurance, a customer pays a fixed sum of money to the insurance provider in exchange for financial assistance at some point in the future. However, the service may not be rendered at all.

   Car insurance companies make money through a clever combination of risk management and the use of funds in a strategic manner.

   • Insurers segregate policyholders into groups based on the risk they carry, i.e., driving history, type of car, etc. In each group there is a small percentage of policyholders who may endure an accident for which they file claims during the policy term.

   So consider an instance where a policyholder gets into an accident that results in a payout of Rs.1 lakh. If the policyholder has paid premium that amounts to Rs.12,000, this would indicate that the insurer is at a direct loss of Rs.88,000. But in reality, the insurer does not incur such a loss because managed risk spreads this financial burden over the remaining members of the group, who haven’t raised any claims.

   • Insurance companies work like banks i.e., they invest the money received from policyholders in investments that earn interests. The shared risk enables insurers to have a large amount of cash on hand for honouring claims. Investments are part of a financial strategy to ensure that the company has cash for claim payouts in the long-term.
   • In addition to the points above, car insurers also have a limit on payouts. These limits match the premiums paid. This is a strategy using which the company ensures that it does not make payments beyond a specific pre-defined amount.
9. Are car insurance premiums going up?

   After the GST implementation on 1 July 2017, the total amount you pay for auto insurance has risen. This is because the service tax on the premiums paid earlier were 15%. Now that the service tax has been replaced by GST, the rate charged is 18%, an increase of 3% in total premium. In addition to that, the Insurance Regulatory and Development Authority of India has recently indicated that car insurance premiums will rise by 16%-50% in 2018.

10. Are car insurance claims public record?

    No, car insurance claims are not public records, these are business records that can be obtained through a subpoena.

11. Are car insurance claims taxable?

    Taxability of a motor insurance claim payout depends on whether the amount received is ‘capital’ or ‘revenue’.

    • If the person receiving the compensation for a car accident is permanently disabled due to the accident, this amount is considered as ‘capital’ receipt, and hence, is not taxable.
    • If the disablement of the claimant is temporary, the claim payout is considered as a temporary income, i.e., ‘revenue’ that is taxable.
12. Are car insurance payments tax deductible?

    The tax implications of car insurance payments are as follows:

    • The premium paid towards a motor insurance policy can be treated as an expense if the vehicle is used for commercial purposes. In this case, the policyholder can avail tax deductions on the premiums paid. There is also no maximum limit on the amount of premium that can be claimed as business expense.
    • If the car is used only for private purposes, the insurance premium paid is not considered as an expense. So, the policyholder cannot avail tax deductions.
    • If the car is partially used for private purposes and partially for business use, then the policyholder can receive tax deductions on the premiums paid. The deduction will be in proportion to the amount paid towards the commercial auto insurance premium.
13. When does a car insurance policy expire?

    All auto insurance policies have a defined policy period. This is the duration for which the coverage is active. The start and end-dates of coverage are specified in the policy documentation. A policy term does not automatically begin at the start of a calendar year. The policy term for car insurance in India is 1 year and it depends on when the coverage under the plan commences.

14. Why do car insurance premiums increase every year?

    Increase in car insurance premiums can be classified into two categories:

    • Factors under the control of the policyholder - This includes your claim history, accident record, value and type of the vehicle you drive, age, gender, and marital status. The premium also depends on the population, weather, and crime log in your locality.
    • Factors under the control of the insurance company - This is inclusive of the situations mentioned below:
      • Poor loss experience - If the insurance provider has experienced or anticipates poor loss, then the insurance premiums across the entire range of products would increase.
      • Hike in expenses - If an insurance company has seen that there is an increase in expenses, the premium rates will go up.
      • Poor investment performance - A series of poor performances in the market can compel investors to increase car insurance premiums.
      • Poor results in a segment of policyholders - If the insurance company observes a poor performance in a specific segment of policyholders then the premium for that segment will rise.
15. What is the Pollution Under Control (PUC) Certificate validity for a new car?

    For vehicles that were purchased on or before 31 March 2010, i.e. old cars, the PUC Certificate will have to be renewed on a quarterly basis. For all vehicles purchased from 1 April 2010 onwards, i.e., new cars, the PUC Certificate will be valid for 1 year.

16. How many times can I claim under car insurance in a year?

    There is no restriction on the number of auto insurance claims allowed in a year, as long as the policy is in force. However, there are restrictions on the number of claims raised under add-on covers such as zero depreciation, NCB protect, etc. You can check the policy terms and conditions for more details.

17. Is it necessary to inform my insurer in case I fit a CNG/LPG kit in my car?

    Fitting a CNG or LPG kit in your vehicle is a major change which will have to reflect in your insurance policy as a policy endorsement. If you don’t inform your insurer regarding the kit, your insurance claim when raised will be denied and your insurance policy will be declared as void.

18. What are the parameters used to calculate your car insurance premium?

    Your insurance policy is calculated based on certain parameters, a few of them are listed below:

    • Insured Declared Value (IDV) of your car
    • Riders you opt for
    • Make and model of your car
    • Your geographical location
    • Manufacturing year of your car
    • Accumulated No Claim Bonus (NCB)
19. What is a third-party liability cover?

    Third-party car insurance is a legal agreement between the insurer and policyholder where the insurer promises to protect the policyholder from unforeseen liabilities due to third-party injuries, third-party vehicle damage and external property damage.

20. What is a comprehensive cover?

    Comprehensive car insurance is a legal agreement between the insurer and policyholder where the insurer promises to protect the policyholder from unforeseen third-party as well as own damage liabilities.

21. What documents have to be submitted at the time of claim request?

    The following are a few of the documents that need to be submitted at the time you raise the claim request:

    • Duly filled claim form
    • Invoices/bills that show the loss estimate
    • Copy of the vehicle’s RC
    • Repair invoice (for reimbursement claim only)
    • Copy of the FIR you filed at the time of mishap
22. What is a voluntary deductible in car insurance?

    A voluntary deductible is part of the insured amount that you agree to pay from your side at the time of claim settlement.

23. Does my geographical location impact my car insurance premium? If so, how?

    Yes, your geographical location impacts your insurance premium since the standard of living varies from one place to another. Places with high standard of living will have high insurance premiums too. Also, few of the place may be more accident prone than the others, in such cases the more accident prone areas will have higher insurance premium than the others.

24. What is the endorsement process for an existing car insurance policy?

    If you have any correction/change to be made in your insurance policy, you can do it through policy endorsement. You will have to submit a letter with the details of your endorsement along with valid proof to your insurer.

25. Between comprehensive cover and third-party liability cover, which one should I opt for?

    Third-party liability cover provides a limited insurance coverage whereas comprehensive cover offers an extensive insurance coverage. You can opt for either of the covers based on your insurance needs and the kind of car your own. As third-party coverage is limited, you can avail this insurance for low end cars or second-hand cars. When it comes to luxury cars, it is always wise to opt for a comprehensive cover as the cost of repair/replacement is high for such cars.

26. What are some of the best add-ons available in the car insurance market?

    Car insurance comes with a number of add-on covers that add value to the base policy. Out of the add-ons available in the market, the most favoured ones are return-to-invoice cover, zero-depreciation cover, No Claim Bonus (NCB) protect and engine protect.

27. How long is the car insurance policy tenure?

    A car insurance policy tenure is the time period during which your car insurance policy remains active unless you use the complete claim amount. Your car insurance policy can be for 1 year or 3 years depending on the car insurance policy being offered by the insurer.

28. Is it possible to cancel my car insurance policy anytime?

    Yes, you can cancel your car insurance policy and get the existing insured amount debited to your account, provided you have not raised any claim 30 days prior to the policy expiry and have an alternate car insurance for which you can produce valid proof.

29. What does depreciation mean in car insurance?

    Depreciation in car insurance refers to the reduction in the value of your car due to its regular wear and tear. Depreciation affects the car parts as well as the car on the whole. The depreciation rates vary for different car parts and cars. As your car ages, its value will also depreciate.

30. What is a cover note?

    A cover note is a temporary document provided by the insurer to the insured until the original insurance policy is issued. The cover note will have the details of the policyholder and insurance policy and is valid for 60 days from the date of issuance.

31. Is it possible to transfer the NCBs from my expired insurance policy?

    Yes, you can transfer your accumulated NCBs provided you have purchased the new insurance policy within 90 days of your previous policy expiry.

32. How can I trim my car insurance premium?

    There are a number of discounts one can avail to reduce one's insurance premium, a few of the discounts are listed below:

    • No Claim Bonus (NCB).
    • If you are a member of one of the automobile associations of India.
    • If you own vintage cars that are certified by the Vintage and Classic Car Club of India.
    • If you have installed ARAI approved anti-theft devices in your car.
33. In case I buy a second-hand car, is it ok to continue the car insurance policy in the previous car owners name even though the owner’s name in the RTO records reflect my name?

    No, once you buy a second hand car, it is necessary that you insure the new car in your name, else your claim request will be denied. For the car insurance to be valid, your name should reflect in the RTO records as well as your car insurance policy.

34. What are consumables in car insurance?

    Consumables are certain substances used in vehicles; these are susceptible to wear and tear or must be replaced regularly. In other words, these items are either consumed completely or are unfit for future use. This includes nuts and bolts, screws, brake oil, engine oil, oil filter, fuel filter, lubricants, ball bearings, grease, air conditioner gas, washers, etc.

    A basic comprehensive car insurance plan does not offer coverage for consumables. Insurers offer add-on covers for insuring the car’s consumables. These riders need to be purchased separately by paying extra premiums. These can be added to the base plan to enhance the insurance coverage.

    Listed below are certain conditions that apply to the consumables add-on cover:

    1. For a consumables claim to be valid, the claim must fall under the own-damage part of the comprehensive cover.
    2. Repairs to the vehicle’s consumables should be undertaken within 3 days from the date of theft or loss. If you do not raise the claim within this time, it can be invalidated by the insurer.
    3. The consumables add-on cover is only available to cars that are below 5 years old.
35. What is RTI in car insurance?

    Return to invoice (RTI) cover is an add-on insurance policy that bridges the gap between the Insured Declared Value of the car and its invoice value. It is an option that will offer you the on-road price of the car (at the time of purchase) in the event of a claim. The cost of RTI cover is about 10% more than the cost of a comprehensive car insurance plan. The RTI cover offers protection against a significant financial loss, such as a stolen car or a vehicle that is damaged beyond repair.

    If your vehicle was only protected by a comprehensive car insurance policy, you would have received the IDV of the vehicle as claim payout. The value pertaining to the depreciation of the vehicle would not be offered to you. The RTI add-on policy covers this gap.

    Here are a few things you need to keep in mind when availing a RTI cover:

    • You cannot raise claim for small vehicle damages using the RTI cover.
    • The RTI cover is most useful for covering financial losses that have risen as a result of the insured vehicle being stolen or the insured car being completely damaged.
    • You can opt for a RTI cover of you stay at a theft-prone area, and the chances of your vehicle getting damaged or stolen is high.
    • This cover gives the policyholder a relief from the depreciation factor of the vehicle.
    • The RTI cover is applicable only for vehicles that have been newly purchased or that are less than 3 years old.
37. What is salvage and total loss in car insurance?

    Salvage is the total value or loss/damages to your car post a mishap. Total loss is when your car has undergone severe damage/wreck and is in a state where it can’t be repaired.

38. What is the difference between cashless claim and reimbursement claim?

    A cashless claim is offered by the insurers who have tie-ups with certain authorised garages that can provide car services to the policyholder, post a mishap. Post all the repair work is done, the insurer settles the cost for the repairs directly with the garage.

    In case your insurer doesn’t offer cashless claim settlement or if you are unable to locate a cashless garage nearby post a mishap, you can take your car to the nearest garage for repairs and pay for the repairs yourself. After you have made the payment, collect the invoice and payment receipt, and submit them to your insurer. The insurer will review the submitted documents and reimburse the amount you spent for your car repairs.

39. What documents do you have to submit in order to avail the cashless facility?

    You have to submit the following documents to avail the cashless claim service:

    • Your car’s original RC book.
    • A copy of your car’s RC book.
    • A copy of your driver’s licence.
    • A duly filled claim form.
    • Copy of the FIR lodged by you at the time of mishap

    Apart from the above basic documents, you also have to submit other necessary documents mentioned in your insurance policy document.

40. What is an insurance certificate?

    Insurance certificate is a document issued by the insurer and contains all the relevant information about your insurance policy. Issuance of this document is mandatory as per the Central Motor Vehicles Rules and should always be present in the vehicle.

41. After I sell my car, what happens to my car insurance?

    When you sell your car, you can either transfer your insurance policy to the buyer’s name or you can cancel your insurance policy. Either way, if you have accumulated No Claim Bonuses you can retain them and transfer them to your new insurance policy, if any, within 90 days of policy expiry.

42. How can I incorporate any necessary changes to my car insurance policy?

    For any change or correction to be incorporated in your insurance policy, you need to submit an endorsement letter along with relevant proof and other necessary documents. The insurer, post review of the documents and letter you submitted will make the necessary changes in your policy.

43. How can I add or delete the Hypothecation in my car insurance policy?

    To add a Hypothecation you need to submit your car’s endorsed RC copy or a letter from the respective bank.

    To delete a Hypothecation you need to submit your car’s endorsed RC copy to the bank or submit the relevant documents along with the NOC to your insurer.

44. If I am buying a new car, how do I transfer my existing policy to the new vehicle?

    If you want to transfer your existing insurance policy to your new car you will have to contact the nearest branch office of the insurer and ask them to make the relevant changes to your insurance policy document which may include a change in the insurance premium too. You might also have to submit the sale letter and insurance policy document of your previous car.

45. What is a No Claims Bonus (NCB)?

    No claim bonus is a discount on insurance premium offered by the insurer to the insured as a reward for every claim-free year. The percentage of discount provided increases with each year, for a maximum of 5 years. At the end of the first claim-free year you are eligible for a 20% discount which increases in the consecutive years upto a 50% discount provided at the end of the 5th claim-free year.

46. Will my No Claims Bonus (NCB) earned overseas be accepted in India for the car insurance I purchase?

    Yes, your NCBs accumulated overseas will be accepted provided you purchase the car insurance in India within three years of your overseas insurance policy expiry.

47. What is an IDV?

    IDV also known as Insured Declared Value is the market value of your car post depreciation at the commencement of your car insurance policy.

48. Can I change my insurance policy from third-party liability to comprehensive cover?

    Yes you can switch from third-party liability cover to comprehensive cover at the time of policy renewal after your car passes the insurer authorised inspection.

49. Can I renew my car insurance with another insurer?

    Yes, you can renew your car insurance with another insurer along with your accumulated NCBs .

50. How do I transfer my car insurance to the new car owner?

    To transfer your insurance to the new car owner you need to submit the following documents to the insurer:

    • Sale of the Vehicle document
    • The new vehicle RC copy/form 29-30
    • Old insurance policy document
    • NOC from the previous policyholder
    • Insurance transfer fee of Rs. 50/- to be paid
    • New application form from the concerned branch office of the insurer
    • Vehicle inspection to be conducted post the document submission.
51. Can I use the No Claims Bonuses accumulated while driving a company car?

    You can use the No Claim Bonuses provided the employer transfers the company car to your name. The employer will also have to submit the relevant documents for the same.

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