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How to choose correct insurance for your vehicle

Snapshot: Insurance can be a tricky subject and we bring to you some tips towards insuring your prized possession.

Insurance can be a tricky subject, and most people are not aware about its dos and don’ts. In our constant endeavor to bring you comprehensive data about automobiles, we bring to you some tips and pointers towards insuring your prized possession. Here's our guide to help you choose the best insurance for your vehicle.

First and foremost, let us discuss the types of insurance cover one can get in India - 

Comprehensive 

As the name implies, this policy covers everything, but is subject to depreciation of parts of glass and rubber, and factors in the age of the vehicle. While calculating the premium, the age of the car and its market value is taken into account

Third Party

Having a valid insurance is required by law for any motorized vehicle. Third-party insurance ensures covers the other person affected in an accident where your vehicle is involved. This is the minimum requirement. However, you can add components to a Third Party policy like theft, fire etc.

Zero Depreciation 

A comparatively new trend, Zero-Dep takes comprehensive insurance a step further. Here you just have to pay a fixed amount for the 'Administration Charges' – rest everything is taken care of by the insurance company. Naturally, premiums are higher and so the Zero-Dep was favoured by luxury car companies only. But now, it is spreading to smaller segments as well. Zero-Dep, however, is not available on cars older than 3 years.

Here are some tips to insure your car in a better manner -

  • Insure your vehicle at a price slightly higher than the second hand market price. Never insure your vehicle at the current new vehicle price, as the insurance company will not settle your claim at a price higher than the prevalent second hand market price.
  • Renew your insurance in time: If you don't, besides all the risk of being without insurance you will lose the "No-Claim Discount" after 90 days of expiry of the policy.
  • Never drive in an intoxicated condition: Your Insurance Policy is not valid if at the time of the accident the driver was under the influence of liquor or drugs. However, for occupants other than the intoxicated driver, claims are payable.
  • Do not carry people in excess of the approved seating capacity.
  • Do not drive without a valid license: It is essential that the driver holds a valid and effective driving license. Otherwise, you are not only exposed to a stiff fine by the police, but also in case you meet with an accident, the Insurance contract is void as you have not complied with the provision of "persons entitled to drive". No compensation would be payable either for damages to your car or for injuries to a third person.
  • If you have been disqualified by the Regional Transport Authorities from driving your vehicle, or from holding a license for a certain period, you are not entitled to drive your vehicle. In case of an accident under these circumstances, no claim is payable.
  • If you hold a Learner's License only: Insurance companies are liable to pay claims under the policy, only if at the time of the accident you were accompanied by a duly licensed driver sitting in a position from where he could control your vehicle and your vehicle displayed the 'L' painted sign prominently both in the front and the rear.
  • Do not make a claim in case of minor accidents: Claims for smaller amounts often become uneconomical for you in terms of the bonus lost in the premium charged at the time of the next renewal. Also, small claims will take disproportionate documentation effort.
  • Do not participate in rallies without paying extra premium: The motor vehicle policy excludes participation in Rallies and Reliability Trials. But the policy can be extended to cover use during such trials provided it is organized by any recognized Motoring organization on payment of additional premium.

MUST READ: Beware of these 3 Car Insurance Pitfalls!

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