Motor Insurance

Motor Vehicle insurance is the most important document for all vehicle owners/drivers. Its main objective is to give complete protection against physical damage or loss sustained by the insured vehicle from natural and man-made calamities. Apart from the own-damage cover, the auto insurance policy also provides coverage for third-party liabilities, arising out of any accidental damage, injury, or death of a third party.

What is Motor Insurance

Motor insurance is an insurance policy for four-wheelers, commercial trucks, two-wheelers, and other road vehicles. Motor insurance online provides financial protection against physical damage or cover for natural calamities and any loss or damages sustained by the policyholder in an unforeseen accident.

Motor insurance is mandatory for all two-wheeler and four-wheeler vehicles such as cars, bikes, scooters, and trucks that are plying on the roads in India. Vehicle owners can avail motor insurance even for commercial vehicles as well.

Types of Vehicles Covered Under Motor Insurance

Motor Insurance

Car Insurance

Car Insurance gives coverage against accidental loss or damages to owning a car or a third party. When choosing a car insurance policy, a person should always compare the premium offered by various insurers to ensure that he got the best deal. The amount of premium would depend on the make & value of the car, the state from which it is registered, and the manufacturing year.

Two Wheeler Insurance

Two Wheeler Insurance or bike insurance protects bikes and scooters. It covers two-wheeler vehicles against any own damages as well as any accidental loss caused to third-party property or persons. Similar to car insurance, the premium of a two-wheeler policy depends on the age of the bike, its make & model, registration year, etc.

Commercial Vehicle Insurance

Commercial vehicle insurance helps all commercial vehicle drivers to reduce losses they might incur due to damage to their vehicle. Here commercial vehicles include those that are not used for personal purposes, like goods carrying vehicles, trucks, etc.

Features of Motor Insurance

A vehicle insurance policy comes with several features that can be very beneficial for the policyholder. Here are some of those features that you should know about:

 

  • You can purchase motor insurance online in a hassle-free manner.
  • You can renew the insurance plan online in the comfort of your place.
  • You can add or remove any particular add-on as your requirement. You can do it while purchasing or renewing the insurance plan.
  • Motor insurance not only provides cover for the damages caused by an accident but also covers you from theft, natural calamity, fire damage, vandalism, manmade disasters, etc.
  • You can get the benefits of a cashless claim by providing enough evidence in case of accidents and theft.
  • Motor insurance also provides a No Claim Bonus feature. Under this feature, if you do not raise a claim during the policy tenure then the insurer will provide you with a specified discount either on the premium or on purchasing any other add-on. It varies from insurer to insurer.
  • Insurance companies keep on coming with different plans and add-ons to provide you better coverage as well as provide assistance in case you get stuck during the claiming process.

Kinds of Motor Insurance Coverage in India

Third-Party Insurance Cover

It covers a third person who has been injured in an accident involving you and your vehicle, including car, scooters, bikes, trucks, etc. The policy doesn’t provide any direct benefit to the insured. As per the Insurance Regulatory and Development of India (IRDA), no insurer can decline to underwrite third party insurance.

Comprehensive Insurance Cover

This cover is an add-on to the third-party insurance plan and protects the owner of cars, bikes, scooters, and trucks from financial losses caused by damage or theft of the insured vehicle. Besides insuring vehicles, it also provides third-party coverage.

Pay as You Drive Insurance

Pay As You Drive policy is a newly introduced car insurance product as per the recent guidelines of IRDA under the Sandbox project. This car insurance policy allows the policyholder to pay the insurance premiums as per the kilometers driven. The policy premiums are to be decided at the time of buying the policy depending on the declared distance by the insurance seeker that he/she expects to drive in a policy tenure. Pay As You Drive policy offers both comprehensive and third-party liability coverage on a pilot basis for a year. Currently, insurers like Bharti AXA, Acko General, and ICICI Lombard are providing this policy through their online portals, agents, aggregator websites, or other distribution channels.

What is Covered in Motor Insurance?

The damages to the vehicle due to below perils are covered in motor insurance-

  • Riot & strike
  • Fire & burglary
  • Terrorism act
  • Earthquake
  • Landslide
  • Flood, storm, cyclone

What is Not Covered in Motor Insurance?

Always remember your vehicle insurance will not provide coverage in the below situations-

  • If the driver is under the influence of drugs or abuse
  • The car/ two-wheeler/ commercial vehicle is used for illegal activities or a purpose otherwise stated in the policy
  • Not having a valid driving license
  • Any loss or damage to the insured vehicle if it happens outside India

Why You Should Buy Vehicle Insurance?

Do you know, around 4 lakh people meet with road accidents every month? A survey was conducted by the World Health Organization Report, which stated that in 2012, India had recorded the highest number of road deaths in the world.

Considering the high number and poor conditions of the road, motor insurance has become a necessity to drive on the Indian roads. Motor insurance gives financial protection not only to you but it also covers third party damages. A few private insurers offer a large number of other utilities to the policyholders, like:

  • Direct settlement or cashless claims at network garages
  • Depreciation Cover
  • Engine Protection Cover
  • 24X7 Road Side assistance
  • Towing Facility

Things to Consider While Buying Motor Insurance Online

It is mandatory to get insured with a third-party insurance plan in India. As the name suggests, a third-party plan provides cover for the third-party liability and comes with a specified set of coverage. But when you decide to purchase a comprehensive insurance plan then it is suggested to consider several things to make the most out of that insurance plan. So here are the things that you need to consider while purchasing a motor insurance plan.

  • Coverage: While purchasing motor insurance, check if that particular insurance plan is providing you with the coverage you require.
  • Add-on: If you are not satisfied with the kind of coverage your desired comprehensive insurance plan is providing then you can always consider purchasing an add-on as provided by your insurer.
  • Personal Accident Cover: Make sure that the motor insurance you are planning to purchase comes with the personal accident cover or not.
  • Claim Settlement Ratio: Before purchasing a motor insurance plan, check the claim settlement ratio of your desired insurance provider.
  • Network Garages: Check if your desired insurance provider has a good network when it comes to garages. 
  • No Claim Bonus: Check if the insurance company provides a good no claim bonus or not.
  • Read Terms & Conditions Properly: Make sure that you read the terms and conditions properly before signing any documents.
  • Zero Depreciation: As soon as the car comes out of the showroom, its price drops down to almost half the amount you have bought it for. In order to maintain the monetary value of your vehicle, you are suggested to opt for the zero depreciation add-on to get the best coverage amount after the depreciation.

Parameters Affecting Vehicle Insurance Premium

Here are the parameters that can affect the vehicle insurance premium.

  • Make & Model: The premium amount of your insurance plan depends upon your car’s make and model, meaning its cubic capacity, model as well as its variant. 
  • Age: The depreciation value, as well as the insured declared value, depends upon the age of your car.
  • Engine: Th engine type whether it is a petrol engine or a diesel engine will affect the IDV that might increase the premium amount.
  • Location: The premium amount of your vehicle depends upon the location of the car. For instance, if you live in a metro city then the premium amount of the motor insurance would be higher due to the high risk of an accident.
  • Add-on: the insurance plan comes with a particular set of coverage but the insurance companies also provide add-ons so that you can enhance the coverage in case you are not satisfied with the existing coverage.
  • No Claim Bonus: The insurance companies provide a discount on the successive year for not raising a claim during the previous policy tenure.
  • Online Purchase: For a hassle-free experience and lower premium rates, it is suggested to purchase the policy online as you can compare different plans and purchase the one that suits your requirement as well as your budget.