India has approximately 19 Crore registered automobiles, from which, almost 8.26 Crore vehicles are insured. Vehicle insurance is a necessity for every car owner across the country. It provides financial and legal support in case the driver or any third-party individual comes across an unfortunate incident causing damage or loss to the persons or property involved.
A car insurance policy is a mandate for every automobile under the law. These policies are offered by several financial institutions across the nation, providing many choices for prospective customers to choose from.
Let’s take a look at some of the interest things about car insurance policies in India:
Fact #1 – There are two types of insurance
Most financial institutions offer two different types of insurance policies for vehicles:
- Third-party liability cover
Third party car insurance policies protect an insured individual against any financial loss if he or she accidentally damages someone else’s property with an insured vehicle. These usually have a narrower coverage, but they also require smaller premium from an insured.
- Comprehensive insurance cover
Comprehensive insurance policies offer financial backing for a wider scenario. These usually include third-party liabilities as well as damage to the insured individual and vehicle. Both third-party and comprehensive insurance policies are equally popular across India because of the flexibility of choice they have to offer.
Fact #2 – It is illegal to drive without an insurance policy in India
As per the Motor Vehicles Act of 1988, all vehicles should have at least a third party car insurance policy to be legally drivable for private or commercial purposes. It is deemed necessary because these policies protect both an insured and a third-party individual against any unforeseen financial loss. Anyone caught breaking this law can be fined by the authorities.
Fact #3 – Premium is calculated based on several factors
Insurance premium does not exclusively depend on a particular policy; it also changes in accordance with factors like the age, make, model, type, engine displacement, and current condition of a vehicle. Insurers also calculate an Insured Declared Value (IDV) when a customer opts to buy a car insurance policy, which can affect its premium.
Location, driving habit, age, gender, and even marital status of a car owner can affect insurance premiums as well. A customer must consider all these aspects and avail insurance policies from reputed companies like Bajaj Finserv, to secure their vehicles with adequate coverage.
Fact #4 – FIR is a mandate in case of accident or theft
It is important to lodge a First Incident Report (FIR) if an insured vehicle witnesses significant damage. Prompt action is also required to start the claim settlement process. Accident claims are usually settled through reimbursement modes via associated motor garages. The majority of insurance providers tie-up with garages to extend services to their customers. Ideally, one should select an insurer that has an extensive network of service garages for maximum convenience.
Fact #5 – There are exclusion that may lead to rejection of claims
Almost every financial institution maintains a list of scenarios that are not covered under their standard insurance policy. They will likely reject or disallow a claim if it falls under this category. It is crucial to be aware of these exclusions before someone opts to buy a car insurance policy in India.
These are some of the interesting things about car insurance policies that every vehicle owner should know about. It will help them better understand the financial product, as well as to gain the maximum benefits from its various aspects when required.