Car Insurance – Insurance is an arrangement organised by a company to provide a guarantee of compensation. This covers specified loss, damage, illness or death in return for payment for a specified premium. The premium is an amount paid periodically to the insurer by the insured for covering his risk. Hence, an insurance facilitates financial protection. This is done by reimbursing losses during the crisis.
Motor insurance includes 3 main schemes
- Car insurance
- 2 wheeler insurance
- Commercial vehicle insurance
Car insurance in detail
It is mandatory by motor vehicles act 1988 to take a car insurance policy. This act extends to the whole of India. This insurance policy must be renewed every year otherwise it is a punishable offense. The penalties may include having driver’s license suspended, having vehicle’s registration suspended and legal fine. SR-22 is a document that proves that you can meet your state’s minimum insurance requirement.
There are many car insurance providers. To name a few, Bajaj Alliance, ICICI Lombard, Royal Sundaram. A specific amount as the premium is paid to anyone of the car insurance service sector. This premium amount is decided by insured declared value of the vehicle(IDV). The key factors which a car owner will look into while opting for an insurance will be
1. Roadside assistance and towing assistance
This is required especially when people go on long drives. They may get stuck due to operational failure and/ or collision.
2. Cashless servicing
This facilitates the car being serviced at the garage after an accident. Or repair without paying any money.
3. Personal accident cover
The insurance will cover the personal medical expenses met by the insurer in case of an accident.
4. 24*7 spot assistance
This is a highly valuable service because the place and time of the accident are unpredictable.
5. Consumable expenses
6. Lock and key replacement cover
This covers the loss of the car key which may occur due to negligence or theft.
7. Personal baggage cover
This covers for the baggage which was present in the bag at the time of accident or theft.
8. 3rd party liability and Comprehension coverage
When the insurer causes damage to somebody else’s vehicle, like colliding, this insurance will cover the damage caused to the 3rd person vehicle.
9. Zero depreciation cover and Damage/Collision coverage
Zero depreciation car insurance is also known as bumper insurance. This provides the insurer the entire cost which arises due to a collision. Or damage to the vehicle ignoring its depreciation value. This covers hundred percent of the costs involved at the time of repair after an accident.
10. Policy renewal reminder
Since this policy is taken once in a year. One is more likely to forget the exact date of renewal. Some companies volunteer to send reminders a little before the due date.
11. Discounts provided
There are plenty of insurance companies in the market with lots of competition. Hence, the companies come out with varied packages and discounts. This, therefore, becomes one of the major factors to be considered while seeking insurance.