Usually the first motor insurance policy comes from the car dealer, which is bought in a hurry. However, during the first renewal, most policyholders choose the right policy based on their needs.
Car Insurance Renewal: There are many factors that affect the premium of a car insurance policy, but only the premium should not be taken into account while choosing or renewing the policy.
As per the Motor Insurance Act, it is necessary to have third-party motor insurance cover in India. However, this is not the only cover that you should have for your car.
Usually the first motor insurance policy comes from the car dealer, which is bought in a hurry. However, during the first renewal, most policyholders understand their needs and choose the right policy on this basis.
While choosing or renewing a car insurance policy, it is important to keep some things in mind, about which we have told you here.
No Claim Bonus (NCB)
NCB is a discount which generally ranges from 20 to 50 percent on the premium payable. It cannot be claimed at the time of purchasing the policy, but can be claimed by maintaining a claim-free record.
It is a discount given by the insurer to the policyholder, which is available only on renewal of the policy. If you have not made any claim under the policy in the previous year, then you are eligible for No Claim Bonus.
When a new Comprehensive Motor Insurance policy is purchased by the policyholder, he/she is generally not eligible for any NCB discount on the premiums paid. A policyholder is generally entitled to a No Claim Bonus of 20 per cent on the first renewal of the policy,
subject to the condition that no claims have been made during the previous year. With each claim-free year, this discount continuously increases to a maximum of 50% at the end of 5 claim-free years.
Note that, NCB pertains to the policyholder and not the car. So, if you switch to another insurer at the time of renewal of the policy or if you buy a new car by replacing your existing car, you can retain your NCB.
Own Damage Premium (OD)
While buying car insurance, policyholders have to choose between 2 options. There are two options – a limited cover plan or a comprehensive car insurance coverage. Limited cover plan is a liability-only plan or third-party liability insurance.
Its disadvantage is that it only covers the third party liability and protects the car owner from legal liability arising out of the accident, while it does not provide damage protection to the insured vehicle.
Own damage cover in car insurance covers damages to the insured vehicle unlike third party insurance. The policy which is bought only to compensate for the damage caused to the vehicle is called Own Damage Policy.
In this, the insurance company gives compensation to compensate for the damage caused to the car. Some companies also call it self-damage insurance. This cover specifically includes two coverages, damage to the insured vehicle in accident or theft and total loss of the vehicle.
Although third-party liability insurance is mandatory in India, own damage cover has not been made mandatory. However, it is a very useful cover plan. Own Damage Cover provides coverage for Accidental Damage, Rail, Road,
Theft and Demolition, Natural Calamities like Storm, Landslide, Flood, Man-made Calamities like Riots, Strike, Personal Accident cover to the owner or driver.
Personal accident insurance
Personal accident insurance comes in handy for bodily damage caused to the driver in a car accident. In this, other than the driver and the other person sitting in the front seat, other passengers can also be included. If the car owner dies in an accident or in the event of permanent disability, he / family members get compensation.
In India, it is mandatory for the vehicle owner/driver and the person sitting with motor insurance to take a personal accident insurance of minimum 15 lakhs. IRDAI has separated personal accident cover from motor insurance policy with effect from January 1, 2019. That is,
the owner of the vehicle can take both the motor insurance policy + personal accident cover while buying the car. Or one can take personal accident cover separately from any other insurer as a general personal accident product. .
In such a situation, if someone has already taken personal accident cover of 15 lakhs or more, then there is no need to take compulsory personal cover under motor insurance.
premium
The amount of insurance premium paid by the policyholder to the company depends on several factors, such as the type of policy, tenure, sum assured, type of coverage, type of car, the area where the policyholder resides, etc.
The higher the risk associated with an event or claim, the more expensive the insurance premium becomes. Anti-theft devices and other safety features like air bags or entry braking system enhance the safety of the passenger and the car.
Hence, their presence in the car can reduce your annual premium. Along with this, these features reduce the chances of your car being stolen and also reduce the risk associated with the accident to a substantial level.
Customers taking car insurance do not take the benefit of NCB from their insurer. At times you may even decide to change your insurer while renewing the insurance.
In such cases the new insurer does not tell you that you can get NCB even if your car is not insured by them. Keep in mind that if you have not made an insurance claim in the previous year, then you are eligible to take NCB.
Parking is a big concern for car owners. Decreasing space and increasing number of vehicles have added to this difficulty. Cars are being parked on the road, increasing the risk of damage. In such a situation, if you have a garage, you can negotiate with the insurance company for a discount.
