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Is your car insurance monsoon ready?

By Naval Goel
Last updated on: May 11, 2016 15:11 IST
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Keep these things in mind as you head out into the monsoon rains to enjoy your drive and remain tension free

As monsoons are just around the corner, it is advisable to get your car checked for any problems that may occur owing to conditions like flooding, etc. Water clogged streets and other related things can cause issues with the proper functioning of your car. On a serious note, water may also cause serious damage to your engine or other electrical parts that are open and vulnerable. To save you from these troubles, having an up to date and comprehensive car insurance policy is a must.

What to choose?

In India, basically we have two types of car insurance products on offer -- third party cover and a comprehensive insurance plan. Initially it may be confusing for you to choose the best car insurance plan, but if you know the features and benefits of theses plan then you can select the best policy judiciously.

Third party insurance is a type of insurance policy that provides coverage for the damages to third party caused by you. It means that in case of an accident, the third party insurance plan would cover all the damages caused to the third party including his/her car and its related accessories and contents. It also provides you coverage for injuries caused to the third party during the accident.

A comprehensive insurance plan would provide coverage for all the damages caused to your vehicle and the third party coverage is also included in it.

Insurance industry experts suggest buying a comprehensive insurance plan instead of third party liability coverage as it provides coverage for your vehicle and the third party as well. A comprehensive plan provides coverage for the insured vehicle, its related accessories and third party liability coverage as well protection against floods, thefts, fire, explosions, hailstorm, hurricane, typhoon, cyclone etc. It is good to have a comprehensive insurance plan as these days the rate of road accidents is much higher and a good plan will save you a lot of hassle.

In India, having vehicle insurance is mandated by the law; hence it is advisable to buy the desired car insurance plan for yourself at the time you purchase the vehicle. You can compare online from various plans and select the best one.

Why to renew on time?

As with any plan, car insurance should also be renewed every year. It is better to renew the car insurance policy within the validity period. If you missed or delayed the renewal process then you would not get the benefits which you would otherwise have got if you renewed it within the term period. In India, most people forget to renew the car insurance plan on time and later feel the guilt of not doing so. The average rate of renewing policy related to car insurance on time is around 65 per cent in India.

In many cases, the insured complains about the insurer for not providing the renewal information on time. This is mostly true when the insured do not provide accurate information in the proposal form at the time of availing the policy and hence companies find it difficult to communicate with the customers at the time of intimating them about renewal process.

No claim bonus

No claim bonus (NCB) is the additional benefit than an insured gets at the time of renewal of his car insurance policy. Simply put, it applies to the benefits that a policyholder would get when s/he didn’t ask for a claim during the policy tenure.

On an average the no claim bonus that an insured would get at the time of renewal is 20 per cent in the first year, which increases to around 35 per cent in the second year and almost around 50 per cent in the fourth year of the policy period.

Many car insurance providers advise that if you are purchasing a new car, then you should transfer the NCB from the old car insurance plan.

Common reasons for claim rejection

The common reasons of claim rejection in India are

Use of normal car for commercial use: It is a common occurrence in India that people buy the car for their personal use and later on use the same as a commercial vehicle. The insurer will right away reject the claim as it didn’t insure the car which is being used for commercial purposes. If you want to use your car as a commercial vehicle then tell your insurer at the time of buying the plan.

Partial damages: In this case you would not get the full claims. The insurer would provide you the claim amount after deducting the depreciation charges from the same.

Drunk driving:  You might hear the ‘don’t drink while driving’ slogan quite frequently. There is logic behind this notion and for your own good you should practice restraint as drunk driving can cause accidents and the insurance company would not cover the claim

Default in Premium: If you are a premium defaulter then you are not eligible for filing claims against the damages.

So keep these things in mind as you head out into the monsoon rains to enjoy the drive and remain tension free, knowing very well that your car insurance has your back covered just in case you meet an unexpected incident.

Photograph: SuperCar-RoadTrip.frk/Creative Commons

Naval Goel is CEO and Founder, PolicyX

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