FAQ for CAR Insurance:
1. What is CAR Insurance:
It is an agreement between the car owner (insured) and the Insurance Company where in by paying the premium by the Insured the insurance company agrees to give financial coverage for the perils insured.
2. Is it compulsory to have the Motor Insurance:
Yes. As per the Motor Vehicle Act it is compulsory to have minimum Act Only policy (Third Party Liability Policy) for those vehicles plying on the public road which covers the damages done by the insured vehicle to any third party property damages or injuries to the third party
Why should I buy a comprehensive Insurance (Own Damage + Act only) when the as per the law I am required to have only Act only (Third Party) policy? :
Own damage section of the Insurance covers the man-made causalities or nature’s causalities and can claim from insurance Company for the damages sustained to your vehicle due to the accident hence by opting for comprehensive cover you can have peace of mind that if there is any accident then the Insurance company shall pay for the financial loss suffered by you due to an accident.
What is NCD – No claim discount:
when the Insured do not claim on the Insurance company during the last policy period, at the time of renewal the Insurance company offers NCD which is nothing but a reduction of the premium for the claim free year
What information I need to submit at the time of buying On Line Policy?:
No documents is required to be submitted but it is always advisable to have the details of the previous policy and Registration Book handy so that appropriate information could be submitted while submitting the data for on line policy.
Best Reasons To Buy Insurance Online:
Presented below are 5 express reasons to purchase your next insurance policy online or pay insurance premium online. As noted before, it is all about combining convenience with simplicity.
a) Lots of Options- Whilst the offline search for insurance policies may seem convincing enough, you aren’t actually seeing the whole picture. It’s not your fault- legwork can be daunting, and you cannot convincingly check out all the available options in a defined period of time. Thus, checking out all the available options (inclusive of the pros and cons, terms and conditions, qualification factors and peer reviews) online makes for a very sensible choice.
b) Avoid the Mind Games- When dealing with an insurance agent, you are forced to match with a fellow human being who isn’t an impartial authority with regards to what suits your condition the best. He is a salesman who is trying to sell you a product, and all the marketing tricks are in play. Thankfully, this isn’t a problem when buying insurance policy online. In light of all the information before you, an informed and accurate decision can be made instantly.
c) Buying Online is Cheaper- Insurance companies prefer it if you buy their insurance policies and/or pay your premiums online. This is because the said companies don’t have to pay the agents any hefty commissions and the commonly incurred costs pertaining to sales, documentation and other facets of the policy are saved. Thus, the costs are kept low and all the benefits reaped are passed onto the customer. It is a win-win situation for both the insurance company and the customer.
d) Discounts and Offers- To encourage people to purchase insurance policies online, insurers, in collaboration with partners, offer lucrative discounts and offers. For instance, some credit cards companies as the ones offered by Citibank and Standard Chartered Bank offer 5% cash-back to their cherished customers as and when they affect a credit card transaction. Why not use this facility to pay your insurance premium and avail a sizable profit?
e) Its Faster, Safer and Simpler- Obviously, running a rat race to find the best insurance plan versus checking out the ‘one’ online are poles apart in terms of the time, energy and patience involved. Plus, insurers ensure that when it comes to safety, financial transactions on their websites are akin to the online equivalent of Fort Knox. Plus, procedures are so simple, even a child could complete them all (not a recommended proposition though).
Hence, buying the insurance policy online is totally worth it when compared to buying from the traditional sources. In this modern age of internet, fast connectivity and banking’s enhanced presence online, choosing the slower option could be considered a costly mistake
What is normally excluded from the Policy coverage:
a. Loss or damage if policy is not in force
b. Accidental damages caused when the CAR was used for illegal activities
c. Gradual wear and tear of Vehicle and its parts and damages due to war and nuclear risks
d. Loss or damage to vehicle when driven by a person without a valid license
e. Loss or damage to vehicle as a result when driver was under the influence of intoxication due to drugs, alcohol etc.
f. Loss or damage to engine as a result of oil leakage and hydrostatic loss unless specifically covered
g. Loss or damage to vehicle as a result of abuse, misuse, and in contravention of manufacturers guidelines
What is normally covered under comprehensive policy:
h. Fire, explosion, self-ignition or lightning
i. Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone, Hailstorm
j. Burglary, housebreaking or theft –The Insurance company shall pay equal to IDV
k. Riot, strike and terrorism
l. Earthquake (fire and shock damage)
m. Accidental external means
n. Malicious Act
o. Terrorist Activity
p. Whilst in transit by road, rail, inland waterway, lift, elevator or air
q. Landslide, Rockslide
What is IDV – Insured Declared value:
IDV is maximum amount the Insurance Company pays to the Insured at the time of the claim if the vehicle is Total Loss or Stolen. It is the Sum Insured and the same is fixed at the commencement of the Policy.
How IDV is calculated? :
IDV is calculated on the basis of Manufacturers selling price of the brand and model which included local duties and taxes excluding Registration and Insurance. Different depreciation slabs are mentioned below to arrive at the IDV.
Age of the vehicle % of depreciation
If not more than 6 months 5%
More than 6 months but less than 1 year 10%
More than 1 year but less than 2 years 20%
More than 2 years but less than 3 years 30%
More than 3 years but less than 4 years 40%
More than 4 years but less than 5 years 50%
For more than 5 years – The rate of depreciation varies from one insurer to another insurer
What is compulsory excess or deductible? :
It is the minimum amount which the Insurance Company has mentioned in the policy that will be paid by you at the time of each and every claim. The amount varies from Cubic capacity. For less than 1500 cc the deductible is Rs 1000 per claim and for more than 1500 cc the deductible is Rs. 2000 per claim
Do I get the NCD even if I sell my vehicle? Or change the Insurance Company?:
Yes. Renewal Notice or confirmation from the expiring Insurance Company Policy is sufficient proof that you did not claim anything in the previous year which makes you entitles for NCD even if you buy a new vehicle or change the Insurance Company.
What are the discounts that can reduce my premium:
Following are the discounts: r. Automobile association Membership. s. Increase in compulsory deductible – Policy excess
Is GST applicable on Insurance policies:
Yes 18% GST is applicable on Insurance premium.
Is there reference to the premium in the city where the CAR is been used:
Yes. Broadly the cities are divided in to Zone A and Zone B. Zone A having cities like Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata. Mumbai, New Delhi and Pune. Zone B: Rest of India. Zone A attracts little higher premium.
If I fit LPG / CNG Kit in my vehicle is it necessary to intimate the Insurance Company?
Yes. It is compulsory. You need to intimate the value of the kit and additional premium need to be paid to have cover under own damage section. You also need to make the Registration Book change making an endorsement allowing to use CNG / PNG
17. Can I get my Insurance transferred in the name of the buyer when I sell my vehicle: YES. Necessary intimation of the sale be communicated to the insurance company and a new proposal form to be filled in the name of new buyer duly signed by the new buyer and the Insurance company charges some additional fees to transfer the insurance from the date of sale to the expiry of the existing Policy in the name of the new buyer. If the original owner was getting the NCD then the new Buyer shall have to pay on pro-rata basis the NCD as well. Please note that the original buyer needs to get the vehicle transfer within 14 days from the date of transfer of the vehicle
Can I cancel my Insurance Policy?
Yes if you can provide the evidence that the vehicle has been insured at other insurance company, or the vehicle has been sold or vehicle registration book has been cancelled by the RTO office then you can cancel the Insurance and get the pro-rata refund.
If I lose my Insurance Policy can I have the duplicate one?
Yes on submission of the request letter, the Insurance provider shall issue the duplicate policy on charging nominal fees.
What documents are required to be submitted at the time of claim?
a. The Duly Signed Claim Form
b. Estimate of repairs
c. The Original Copy of the FIR, if applicable
d. Copy of The Policy Documents
e. A Copy of The Driving License with original for its verification
f. The Original Keys of The Car in case of Total Loss or theft
g. In case of theft: Copy of the letter addressed to the RTO intimating theft
h. Copy of The Vehicle’s Registration Book
i. RTO Transfer Papers Duly Signed Along With the Necessary Forms (Form 28, 29, 30 And 35).
j. In case of theft or total loss:
Once the local police station submits the final no-trace which means the vehicle could not be found and the claim is approved, you must transfer the RC of the stolen car in favour of the insurance company, hand over all sets of keys and issue a letter of subrogation to the insurance company. Although filing a car insurance claim is fairly straight forward, it is important to do it properly or else the claim can become null and void.