Vehicle Insurance

Those who are not aware of the concept of insurance might find car insurance a bit difficult to understand. Some people take it as an investment. Car insurance is not exactly an investment because it does not yield returns like a fixed deposit or a mutual fund. However, it is an important part of your financial plan as it prevents financial losses in cases like a car accident. Car insurance is based on the simple concept of risk-sharing. You pay a premium to an insurance company that promises to pay for the car repairs as per the terms and conditions of the policy.

Car insurance can compensate you for any financial loss due to an accident, theft, or natural calamity. Depending on the insurance you choose, you can also be covered for third-party property damage, personal injuries, or death.

Types

There are two types of car insurance available in India:

• Comprehensive Insurance

What if your car is damaged due to a collision or a hailstorm or is vandalized? Comprehensive car insurance can cover you for all this plus more. It is extensive car insurance that covers damages to your car as well as to other people’s vehicles and property. You are also compensated for a loss caused by theft, fire, malicious activity, or a natural calamity.

• Third-Party Insurance

You are subject to pay the damages for the third party if you are at fault in case of a collision. Third-party insurance can cover you in such a situation. It pays for the damage caused by your car to other people’s vehicles and property. However, it won’t cover the damages to your car if you are at fault.

Understanding the Features of a Car Insurance Policy:

• Liability

If you happen to injure a person walking on the street while driving your car or if you damage someone’s property while driving your car, you are liable to compensate the person for the damage. The third-party car insurance cover ensures you against this liability.

• Own Damage

There are numerous ways in which your car can get damaged. It can get damaged due to a fire accident, a tree can fall on it, its engine can get affected due to waterlogging, so on and so forth. Repairing a damaged car is an expensive affair and a car insurance policy can protect you from spending your hard-earned money on car repairs. The insurance companies will get your car repaired as per the terms and conditions.

• Personal Accident

A car insurance policy also comes with a Personal Accident Cover. This means that if you suffer permanent disability while driving your car the insurance company will offer you compensation as per its terms and conditions.

• Add-ons

You can strengthen your Comprehensive car insurance cover by purchasing Add-ons. Add-ons are additional coverages that offer an extra layer of insurance for a premium. Note that you can only opt for Add-ons with a Comprehensive policy and not with a basic Third-party Liability policy.

• Services

Apart from providing the cover, insurance companies also offer some extra features. Digital insurers are ahead of their traditional counterparts in this regard. You can purchase a policy within minutes from a digital insurer. Their claims settlement team is highly responsive as well.

Benefits of insuring your car online:

• Legal Compliance

You will be complying with the law of the land by insuring your car with a Third-party car insurance cover. You will be safeguarded from penalties and legal issues arising due to non-compliance.

• Easy Comparison

If you look at the traditional way of purchasing a car insurance policy, the first step of researching and comparing policies itself is a tedious one. Imagine going around one company’s office to another for quotes. An agent can do that for you but trusting an agent to be unbiased and completely transparent is also challenging. Alternatively, you can compare car insurance policies online easily. You can read and understand the features of the policies, compare their quotes, and make an informed decision while buying the policy online.

• Right Deal

Comparing and buying car insurance online will result in you getting the best deal concerning the insurance cover, premium, and the services. You have to make sure that you are comparing similar policies. For example, compare the Comprehensive plan plus an Add-on with a similar coverage offered by a different insurer to make the right analysis and get the best deal.

• No Paperwork

A lot of people find form-filling quite a hassle. In the online setup, you do not have to submit hand-filled forms and a bunch of supporting documents. All you have to do is fill a short online form as a part of the purchase journey and you will be through to the purchase button. That’s all, no paperwork.

• Convenience

While buying car insurance online, you will have the convenience of purchasing it when you want to. You can also purchase it from where you want to. For example, you can simply use your smartphone to purchase car insurance on Saturday night. Buying car insurance online is a convenient option as compared to purchasing it from an agent or an insurance company’s branch office.

• Quick Receipt of Policy

In the online process, you receive your car insurance policy instantly. Your car insurance policy is delivered in your registered email id’s inbox almost immediately after the payment is processed.

• Credible Insurer Check

You can check the credibility of your car insurance providing company with the help of a simple search in Google. Going through their social media handles will also give you an idea about the company’s credibility.

• Valid Policy

Policies purchased online from certified insurance companies are completely valid policies. You might be cheated by an agent but it is hard to be cheated if you purchase the car insurance policy directly from the certified insurance company’s website.

• Easy to Understand and Buy Online

Buying car insurance online is not complex. You do not require the expertise of a professional to do so. If you feel you need some clarification, you can go through the Policy Wordings or connect with the insurance company via call or email to get your issues resolved.

A car insurance claim can be settled in either of the two ways:

1. Cashless Claim

If you get your car repaired at a garage authorised by the insurer then you enter a cashless claim settlement process. As the name suggests, under this type of claim the entire process is cashless which means that the policyholder is not required to pay any cash/money to the insurer authorised garage for the repair of his/her car. The insurer makes the payment to the garage directly subject to the claim amount. The policyholder is only liable to pay for the compulsory deductible and voluntary deductible if opted for at the time of policy purchase.

2. Reimbursement Claim

When you get your car repaired at a garage/workshop outside the authorised network of the insurer, you enter a reimbursement claim settlement process. Under this process, the policyholder makes the payment for the repair cost at the garage of his/her choice and gets the repair cost reimbursed from the insurer later subject to the claim amount. The insurer reimburses the entire claim amount to the policyholder after factoring in the applicable deductibles – compulsory and voluntary (if opted for).

Documents Required for Vehicle Insurance Claim Settlement

You need the following documents at the time of claim settlement of your car insurance:

• Duly signed and filled claim form
• Insurance Policy Document
• Car’s Registration Certificate (RC)
• Driver’s licence (DL)
• Pollution Under Control (PUC) Certificate
• Original receipt/bills of repairs (in case of reimbursement claim)
• FIR (in case of fatal injuries/accidents or third party liabilities)
• A copy of PAN Card (if the claim amount is more than Rs. 1 lakh).
• Duly signed Satisfaction Voucher (SV) or Discharge Voucher (DV)

What is covered?

It depends on the car insurance policy you choose. Comprehensive car insurance can cover you for the following:

• Damage due to an accident
• Loss caused due to natural calamities (Act of God) like floods, hurricane, lightning, earthquake, landslide, hailstorm, frosting, etc.
• Damage due to fire or self-ignition
• Loss due to theft, riots, or any malicious or terrorist activities
• Damage caused in transit by road, rail, inland waterway, lift, elevator or air
• Accident cover for injuries to owner/driver of the insured car
• Compensation for death or permanent disabilities

Car insurance also covers third party liabilities. It includes:

• Vehicle or property damage due to your insured car at a public place
• Any injuries to the third party driver due to an accident

What is not covered?

The following are not covered under car insurance:

• Mechanical or electrical breakdowns
• Depreciation or general wear and tear of the car
• Damage caused while driving under the influence of liquor/drugs
• Damage caused while driving without a valid license
• Damage caused while using the car for hire or reward, organized racing or speed testing, etc.
• Tire damage not resulting from an accident
• Loss of car accessories by theft

The following documents are to be presented when purchasing a car insurance policy:

1. A proof of identity, which could be one among:

1. 1. Passport
   2. Driving license
   3. Aadhar
   4. PAN card
   5. Government issued photo ID

2. A proof of address, which could be one among:

1. 1. Passport
   2. Driving license
   3. Bank or post office passbook
   4. Government issued address proof

3. A recent passport size photograph

4. Driving license

5. Registration certificate of the vehicle

When buying a car insurance policy online, not all insurers ask to upload the documents. Nevertheless, you should keep these handy as you will need them when filing a claim. You only need to provide the document numbers while applying for the policy online.

How to claim car insurance?

How to claim car insurance for Own Damage?

What should be my first action to initiate a claim?