1. Third-Party Liability Cover
As the policyholder, you are the first party. The insurer, who will settle the claim, is the second party. The third party is an individual who might be involved in an accident, and as a result suffers from accidental injuries or damages to his/her property or assets. Thus, motor insurance policy providers offer third-party liability-only covers, which provide coverage against legal liabilities of the third-party’s hospitalisation expenses and property damage. As a vehicle owner, it is necessary for you to purchase, at the very least, a third-party liability-only policy for your car, as per the Motor Vehicles Act, 1988.
2. Comprehensive Insurance Cover
Unlike third-party liability insurance which only offers a cover against legal liability to a third-party, a comprehensive insurance policy, like the name suggests, offers a higher degree of protection to the policyholder. Most comprehensive insurance plans provide coverage against third-party liability, personal accidents, vehicular damage due to natural or man-made calamities (own-damage), and theft or loss of the vehicle. While comprehensive insurance plans are more expensive than third-party liability insurance policies, the enhanced coverage make them a worthy investment.
3. Insured Declared Value
The Insured Declared Value or IDV is the maximum amount of money that you will be eligible to receive from the insurer in case of total loss of the vehicle. Thus, IDV will be calculated based on the current market value of the vehicle, and thus depreciation is taken into account. If the IDV of your vehicle is less, you will have to pay a lower premium, and vice versa. However, the lesser the IDV, the lesser you will receive as payout in the event of a claim. Thus, when you are purchasing a car insurance policy, make sure you pay keen attention to what IDV is fixed by the insurer for your car.
4. No Claim Bonus: The no claim bonus is a discount or bonus that you receive from the insurer for not making any claims during the policy year. Thus, the no claim bonus is how insurance providers reward you for your safe driving. This bonus that you receive can be applied to your own damage premium and can help reduce your premium payable. Most insurers also allow you to accumulate your no-claim bonus up to 50%, thus giving you a significant discount on your premium payable.
5. Deductibles: A deductible is that portion of the claim amount that will have to borne by the policyholder. Deductibles can be of two types – voluntary or compulsory. In the case of compulsory deductibles, the deductible percentage will be fixed by the insurer, and the policyholder will have to mandatorily pay that percentage of the claim. In the case of voluntary deductibles, the policy buyer will have to choose the deductible percentage. Opting for a deductible can reduce your payable premium. However, you should only opt for it if you have the capacity to pay the resulting claim amount.
6. Cashless Garages: Like how you can avail cashless treatments at network hospitals when you have a health insurance policy, you can also get your vehicle serviced or repaired at a cashless garage when you purchase a motor insurance policy. However, you can’t avail this benefit at all garages. Only garages that have a tie-up with your insurance provider will provide you this option. Thus, make sure to carefully consider how many garages fall within your insurer’s network before purchasing a car insurance plan.
7. Endorsements: Post purchasing your policy, if you need to make any changes to the policy document, this can be done by way of an endorsement. Thus, in case you already have purchased an insurance policy and then happen to make certain modifications to your car or there happens to be a change in the ownership, you will have to inform the insurer about this. The insurer will then create an endorsement and attach it your existing policy document.
8. Add-Ons: Add-ons can be compared to riders that are offered by health insurance or life insurance policy providers. Motor insurers offer a number of add-ons that you can purchase for an additional premium and link to your base policy. By way of the add-on, you will be eligible to avail a more enhanced coverage and receive more benefits in case of an untimely accident/theft/loss. Some of the popular add-ons that are offered by insurers include the Zero Depreciation Cover, Return to Invoice Cover, Personal Accident Cover for Co-Passengers, 24x7 Road Assistance Cover, Key Replacement Cover, etc. Make sure to consider your needs and opt for an add-on wisely to make the best use of your plan.
9. Personal Accident Cover: If you happen to purchase a comprehensive two-wheeler insurance or car insurance plan, you, the owner/driver of the vehicle, will be provided a personal accident cover. Thus, in case you happen to meet with an accident and incur hospitalisation expenses because of it, your insurance policy will provide a cover against these expenses, up to a certain amount that will be specified to you at the time of purchasing your insurance plan. Thus, the personal accident cover can supplement the coverage provided by your Mediclaim or health insurance plan.
As the policyholder, you are the first party. The insurer, who will settle the claim, is the second party. The third party is an individual who might be involved in an accident, and as a result suffers from accidental injuries or damages to his/her property or assets. Thus, motor insurance policy providers offer third-party liability-only covers, which provide coverage against legal liabilities of the third-party’s hospitalisation expenses and property damage. As a vehicle owner, it is necessary for you to purchase, at the very least, a third-party liability-only policy for your car, as per the Motor Vehicles Act, 1988.
2. Comprehensive Insurance Cover
Unlike third-party liability insurance which only offers a cover against legal liability to a third-party, a comprehensive insurance policy, like the name suggests, offers a higher degree of protection to the policyholder. Most comprehensive insurance plans provide coverage against third-party liability, personal accidents, vehicular damage due to natural or man-made calamities (own-damage), and theft or loss of the vehicle. While comprehensive insurance plans are more expensive than third-party liability insurance policies, the enhanced coverage make them a worthy investment.
3. Insured Declared Value
The Insured Declared Value or IDV is the maximum amount of money that you will be eligible to receive from the insurer in case of total loss of the vehicle. Thus, IDV will be calculated based on the current market value of the vehicle, and thus depreciation is taken into account. If the IDV of your vehicle is less, you will have to pay a lower premium, and vice versa. However, the lesser the IDV, the lesser you will receive as payout in the event of a claim. Thus, when you are purchasing a car insurance policy, make sure you pay keen attention to what IDV is fixed by the insurer for your car.
4. No Claim Bonus: The no claim bonus is a discount or bonus that you receive from the insurer for not making any claims during the policy year. Thus, the no claim bonus is how insurance providers reward you for your safe driving. This bonus that you receive can be applied to your own damage premium and can help reduce your premium payable. Most insurers also allow you to accumulate your no-claim bonus up to 50%, thus giving you a significant discount on your premium payable.
5. Deductibles: A deductible is that portion of the claim amount that will have to borne by the policyholder. Deductibles can be of two types – voluntary or compulsory. In the case of compulsory deductibles, the deductible percentage will be fixed by the insurer, and the policyholder will have to mandatorily pay that percentage of the claim. In the case of voluntary deductibles, the policy buyer will have to choose the deductible percentage. Opting for a deductible can reduce your payable premium. However, you should only opt for it if you have the capacity to pay the resulting claim amount.
6. Cashless Garages: Like how you can avail cashless treatments at network hospitals when you have a health insurance policy, you can also get your vehicle serviced or repaired at a cashless garage when you purchase a motor insurance policy. However, you can’t avail this benefit at all garages. Only garages that have a tie-up with your insurance provider will provide you this option. Thus, make sure to carefully consider how many garages fall within your insurer’s network before purchasing a car insurance plan.
7. Endorsements: Post purchasing your policy, if you need to make any changes to the policy document, this can be done by way of an endorsement. Thus, in case you already have purchased an insurance policy and then happen to make certain modifications to your car or there happens to be a change in the ownership, you will have to inform the insurer about this. The insurer will then create an endorsement and attach it your existing policy document.
8. Add-Ons: Add-ons can be compared to riders that are offered by health insurance or life insurance policy providers. Motor insurers offer a number of add-ons that you can purchase for an additional premium and link to your base policy. By way of the add-on, you will be eligible to avail a more enhanced coverage and receive more benefits in case of an untimely accident/theft/loss. Some of the popular add-ons that are offered by insurers include the Zero Depreciation Cover, Return to Invoice Cover, Personal Accident Cover for Co-Passengers, 24x7 Road Assistance Cover, Key Replacement Cover, etc. Make sure to consider your needs and opt for an add-on wisely to make the best use of your plan.
9. Personal Accident Cover: If you happen to purchase a comprehensive two-wheeler insurance or car insurance plan, you, the owner/driver of the vehicle, will be provided a personal accident cover. Thus, in case you happen to meet with an accident and incur hospitalisation expenses because of it, your insurance policy will provide a cover against these expenses, up to a certain amount that will be specified to you at the time of purchasing your insurance plan. Thus, the personal accident cover can supplement the coverage provided by your Mediclaim or health insurance plan.
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