Car insurance technically provides protection against the losses incurred as a result of unavoidable instances. It helps cover against theft, financial loss caused by accidents and any subsequent liabilities. The cover level of Car insurance can be the insured party, the insured vehicle, third parties (car and people). The premium of the insurance is dependent on certain parameters like gender, age, vehicle classification, etc. Car insurance gives confidence to drive fearlessly but at the same time should follow the traffic rules. In emergencies it acts like a boon to the insurer.
A comprehensive insurance policy includes:
- Third party cover.
- Loss / Damage to vehicle as a result of an accident, fire or theft.
- Risks against floods, earthquake, riots and strikes.
- Accessories like music system, air-conditioner, etc. can also be covered by paying additional premium.
- Risk of loss/damage while in transit by road, rail, watercraft, air, elevator, etc.
The insurance policy is valid for one year. It becomes effective from the moment the payment of premium is received by the insurance company, and ends at midnight, exactly a year later.
The insurance policy can be obtained through an insurance agent or a development officer of the insurance company. Usually, the new car dealer is also an insurance agent. The insurance premium depends on the car's value, the engine power, its seating capacity, and the value of other accessories like the air-conditioner.
Renewal of Insurance Policy
The insurance policy has to be renewed within the period of validity. Any delay in the renewal of the policy renders the policy invalid and you will not be able to avail any benefit of the policy. Also, driving without a valid insurance policy is a legal offence.
No Claim Bonus
You are eligible for a discount in the premium of a comprehensive insurance policy at the following rate:
- 20% for the 1st year.
- 35% for the 2nd year.
- 50% for the 3rd year.
- 65% for the 4th year and afterwards
The value of the discount depends upon the insurance claims you have made in that particular year.
This discount is adjusted against renewal premium. You can avail the no claim bonus when you renew your policy. In case your policy expires, you can still avail the no claim bonus if you renew the policy within 90 days of its expiry.
Incase you are buying a new car you can transfer the no claim bonus from the policy of your old car to the new one.
You need to intimate the insurance company in case you sell your car and you are eligible for the no claim bonus. The no claim bonus is adjusted against the premium of a new car, if the purchase is made within a period of three years.
