Motor Insurance

Commonly Asked Questions Regarding Motor Insurance


Buying a car insurance can be a perplexing decision. With the different plans and options available, it can be confusing to pick one among the plethora of alternatives. Wouldn’t it be great if there was a one stop guide to look up the frequently asked questions on motor insurance? This article knows exactly what you are looking for and address some of these questions.

What type of insurance cover should I purchase?

There are two types of insurance plans that you can buy, third-party and comprehensive plans. A third-party insurance policy is the one that provides coverage against third-party liabilities. On the other hand, a comprehensive policy extends its coverage to include third-party liabilities along with a coverage for damage to your vehicle. This damage can either be due to natural or man-made factors. Based on your requirement, you can purchase either of the two types, but a third-party cover is the bare minimum what you need to have. Since the digital age is catching up fast, you can now buy motor insurance policy online too.

How are insurance premiums determined?

The premium amount is not based on one single factor, but a combination of multiple factors. The manufacturer, model and make, the registration year, cubic capacity of the vehicle are some factors that determine the premium based on your vehicle. Further, the deductible amount, the IDV set, the add-on coverage opted, past claim history are some other factors of your insurance policy that impact the premium. When buying either bike or car insurance online, you must compare with other insurers to get an affordable alternative. Further, the premiums of a third-party cover are determined and published by the regulator, the Insurance Regulatory and Development Authority of India (IRDAI) whereas own-damage cover is determined by the individual insurance companies.

Can I avail any concession on the premium?

Yes, you can avail concession on motor insurance premiums. This concession can be in the form of no-claim bonus (NCB) which is a benefit for making no claim during the policy tenure. It starts at 20% of the own-damage premium and progressively increases all the way up to 50%. However, if you make any claim, no benefit is available at renewal date. In addition to NCB, the premiums are subsidised for having memberships to automotive associations like Automobile Association of India, Vintage and Classic Car Club of India. Further, any safety devices installed on the vehicle can help you avail the benefits of lower premiums.

Can I make changes in my policy?

Yes, whether you have private or commercial vehicle insurance, it can be done using the endorsement facility. All you need to do is provide an application to the insurer mentioning the changes required along with its reason. While some changes that impact the scope of policy may require payment of additional premiums, others do not require an additional charge for the endorsement facility.

Will I be able to transfer my no-claim bonus if I change my insurance company?

A simple answer is yes. The NCB benefits are linked to you, the policyholder, and not the vehicle so can be transferred. Moreover, if you wish to change your insurance company, you need to avail the proof of NCB earned with your current insurer in the form of NCB certificate which must be submitted to the new insurance company.

These FAQs will help you make a smart decision in buying a motor insurance for your vehicle. Make sure to read the terms of the policy and compare the premiums across different insurers and then finalise the purchase.

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