Time to renew your motor insurance policy? Here’s what you need to doDecember 21, 2020
The coverage of a motor insurance plan depends on the type of policy one selects. Experts say proper research should be done before buying a vehicle insurance policy. For instance, the inclusion of depreciation reimbursement, engine protection, and roadside assistance are some of the add-ons one needs to opt for to have proper coverage. In a motor insurance policy, third party (TP) insurance is mandatory, with the premium being fixed by the regulator on an annual basis. Insurers, on the other hand, fix their own rates for OD and personal accident cover.
Experts say motor insurance policyholders need to check that their insurance has been duly renewed or not. Adarsh Agarwal, Appointed Actuary at Digit Insurance says, “During the lockdown, many individuals forgot to renew their motor policy. Even if the vehicle is at home, insurance is important since it protects against theft/fire and other risks. Check for appropriate add-on covers like depreciation shield/engine protector/consumables and others are if not taken already.” Note that, if there is break-in insurance, the insurance company will do pre-inspection before renewing the policy.
In motor insurance, a third party (TP) cover is mandatory for vehicles plying on roads. This protects the owner of the vehicle from any legal liability that could arise due to an accident—be it injury or death of the third party or third-party property damage. Moreover, individuals have to buy a mandatorily cover which pays Rs 15 lakhs if the owner of the car dies in an accident. On the other hand, having a comprehensive motor cover helps protect vehicles during calamities. Neeraj Prakash, MD, Shriram General Insurance, says “Vehicle IDV is pre-defined by the regulator on a yearly depreciation basis. However, policyholders can increase it up to 20 per cent and decrease by 10 per cent, depending upon the vehicle’s current ex-showroom price. Mind that increasing IDV can raise the premium as well.”
Experts say, while comparing the available options, a motor insurance premium calculator is a handy tool that can aid the comparison while keeping your premiums in check. Make sure to note the inclusions and exclusions when selecting a suitable policy for your vehicle insurance. The list of exclusions is more or less similar across insurers and its various plans. Some common exclusion includes driving without a license, drunk driving, deliberate accidents, driving outside the geographical region, consequential losses, etc. A comprehensive insurance plan provides more wholesome coverage. They include the damages to your vehicle along with third-party liabilities.
Prakash, of Shriram General Insurance, says “To enjoy continued benefits, you need to ensure your motor insurance renewal is done well in advance. If you fail to renew your policy, you lose on accrued policy benefits as well as the loss of coverage.”
Why should you keep in mind while reviewing your Auto Insurance policy?
ACKO General Insurance, Animesh Das, Head of Product Strategy, says, “Reviewing your Auto insurance each year is important. Preferably, 2-3 months before they are due for renewal. If improving your finances is on your new-year resolution checklist, it is as good a time as any to review your insurance policies too.”
Experts say, if an individual has bought his/her first insurance from a car dealership, they must check out other options from a coverage and cost perspective. If you are a new car owner, you should confirm that you have at least a comprehensive cover, along with Zero Depreciation add-on.
Das, of ACKO General Insurance, says, “One thing that often gets missed is that legally you only need one Personal Accident (PA) cover while driving in India. If you have multiple vehicles in the family (cars and two-wheelers included), you just need one PA cover to legally drive around. If you didn’t pay attention while buying auto insurance, you might be having multiple PA covers that came clubbed with the policies. Make sure to correct it at the time of renewals.” Experts say, while you only need one valid PA cover to drive legally, make sure that the PA cover gives apt coverage. Having Rs 15 lakh PA cover is recommended.