Understanding Motor Insurance

Motor insurance offers financial protection for vehicle owners against damages from accidents, theft, or natural disasters. It includes liability coverage for injuries or property damage to others. Policies vary by type—such as third-party, comprehensive, or collision—and factors like vehicle type, driver history, and location influence premiums.

Types

Third Party Liability

In India, third-party liability insurance is legally required for all vehicle owners. This coverage protects the policyholder from financial liability for damages caused to other people or property. Third-party insurance helps reduce the policyholder's risk and liability in various situations. It is particularly advisable for older or less expensive vehicles, which are more economical to repair.

Comprehensive Insurance

A comprehensive vehicle insurance plan covers both third-party liability and expenses related to theft or accidents involving the policyholder’s vehicle. It also includes personal accident cover, which provides compensation for death or injury resulting from an accident. The advantage of a comprehensive policy is that it consolidates various protections into one plan, including optional add-ons or riders, offering extensive security and coverage for a wide range of scenarios without the need for multiple policies.

Own Damage Insurance

Own Damage car insurance is a coverage type that safeguards the insured vehicle against damage from natural disasters like floods, earthquakes, and storms. It also provides protection for losses resulting from man-made events such as theft, riots, and accidents involving uninsured drivers.

Categorization

PRIVATE CAR VEHICLE

Private car insurance provides coverage for damages to your vehicle from accidents, theft, or natural disasters. It typically includes third-party liability protection and optional add-ons like roadside assistance and personal accident cover. This insurance ensures financial protection and peace of mind for vehicle owners.

TWO-WHEELER INSURANCE

It covers damages to your motorcycle or scooter from accidents, theft, or natural disasters. It includes third-party liability protection and may offer optional add-ons like roadside assistance and personal accident cover. This insurance ensures financial protection and peace of mind for two-wheeler owners.

COMMERCIAL VEHICLE INSURANCE

Commercial vehicle insurance covers damage to vehicles used for business purposes, such as trucks and vans, from accidents, theft, or natural disasters. It includes third-party liability protection and may offer additional coverage for goods in transit and roadside assistance. This insurance ensures financial protection and operational continuity for businesses.

MISCELLANEOUS VEHICLE INSURANCE

Miscellaneous vehicle insurance covers non-standard vehicles like RVs, boats, and trailers. It provides protection against damage from accidents, theft, and natural disasters, and may include liability coverage and optional add-ons like roadside assistance. This insurance ensures financial security and peace of mind for owners of unconventional vehicles.

No Claim Bonus

In simple terms, a No Claim Bonus (NCB) is a discount on your insurance premium given as a reward for not making any claims during the policy period. This discount can lead to substantial savings on your car insurance. However, if you make a claim during the policy year, the NCB may be reduced or reset to zero. As a result, you might have to pay the full premium amount when renewing your policy.

BENEFITS

Affordable Premiums

The No Claim Bonus (NCB) makes your insurance policies more affordable. If you have a zero-claim record, you can save 20-50% on your car insurance premiums when renewing your policy.

Earn Rewards for Maintaining Your Car Properly

Insurers offer a No Claim Bonus (NCB) as a reward to policyholders for safe driving and proper vehicle maintenance. This reward reflects that you have not made any claims on your car insurance policy, acknowledging your good driving record and responsible vehicle upkeep.

• Granted Directly to Policyholders

The No Claim Bonus (NCB) is granted to the policyholder rather than the vehicle itself. Therefore, if you sell your car, your NCB will remain unaffected. However, you cannot transfer the NCB to the new owner of the vehicle.

Transferable to Another Insurer or Car

If you purchase a new car, you can transfer your No Claim Bonus (NCB) to the new policy. Additionally, if you choose to switch to a different insurer, you can still carry over your NCB to your new policy.

Insured Declared Value

STANDARD CAR DEPRECIATIONRATE FOR IDV

AGE OF CAR	DEPRECIATION RATE
6 MONTHS TO 1 YEAR	5%
1 YEAR TO 2 YEAR	20%
2-3 YEAR	30%
3-4 YEAR	40%
4-5 YEAR	50%
5+ YEARS	TO BE NEGOTIATED

Add- on covers

DEPRECIATION REIMBURSEMENT

It refers to compensation for the reduction in the vehicle's value over time, especially in cases where the vehicle is used for business purposes. This concept is often relevant in the context of employee benefits or corporate policies.

DEPRECIATION REIMBURSEMENT

It refers to compensation for the reduction in the vehicle's value over time, especially in cases where the vehicle is used for business purposes. This concept is often relevant in the context of employee benefits or corporate policies.

DAILY ALLOWANCES

This is typically intended to cover expenses related to operating the vehicle. These allowances can vary depending on company policies, but they generally aim to reimburse employees for costs incurred while using their personal vehicles for work-related activities.

RETURN TO INVOICE

It is a type of vehicle insurance coverage that is particularly useful for individuals who have purchased a private vehicle. It is designed to protect the vehicle owner in the event of a total loss or theft.

NO CLAIM BONUS

It ensures your NCB discount remains intact even if you make a claim. It allows for a specified number of claims per policy year without affecting your premium discount, providing financial protection and continued savings. Available as an add-on, it comes with an additional premium.

REPAIR OF GLASS, FIBRE, PLASTIC & RUBBER PARTS

Repairing vehicle glass typically involves resin injections for minor chips or full replacement for significant cracks. Fiber parts, like fiberglass, are repaired with resin or epoxy, while extensive damage may require replacement. Plastic repairs include welding or adhesive applications for cracks, with replacements for severe damage. Rubber parts are generally replaced if damaged, though minor splits can be fixed with rubber adhesives.

LOSS OF PERSONAL BELONGINGS

It is typically not covered by standard auto insurance policies. Specialized coverage, such as personal property insurance or home insurance, may be needed to protect items left in the vehicle from theft or damage. Always check policy specifics and consider additional coverage if needed.

EMERGENCY TRANSPORT AND HOTEL EXPENSES

They are often covered by optional add-ons or travel insurance, not standard auto policies. These coverages help with costs for alternative transport or lodging if your vehicle is immobilized due to a breakdown or accident. Check your insurance policy for details and consider adding such coverage if needed.

KEY REPLACEMENTS

Specialized coverage or roadside assistance plans may offer key replacement services, including lost or damaged keys. Review your insurance policy or roadside assistance plan to determine if key replacement is included or if additional coverage is needed.

COURTESY/ HIRE CAR

The coverage provides a replacement vehicle if yours is in the shop due to an accident or repair. This benefit is usually available through optional add-ons or specific insurance plans. Check your policy details to see if it includes a courtesy car and the conditions for its provision.

ENGINE SECURE

It protects against the cost of repairs or replacement for engine damage due to mechanical failure or other issues not covered by standard insurance. This optional add-on can be essential for highvalue or high-performance vehicles.

TYRE SECURE

It provides protection against the cost of repairing or replacing damaged Tyres due to punctures, cuts, or other incidents. This optional add-on ensures that you’re covered for unexpected Tyre issues, which standard insurance typically doesn’t include. Verify with your insurer to see if this coverage is available.

CONSUMABLE EXPENSES

The coverage pays for items like engine oil, coolant, or other fluids that may need replacement following a claim, such as an accident or mechanical failure. This coverage is usually an optional add-on to standard insurance policies. Check your policy details to confirm if consumable expenses are included.

ROADSIDE ASSISTENCE

It provides emergency support for issues like breakdowns, flat Tyres, or fuel shortages while driving. This coverage, often available as an add-on to auto insurance or through standalone plans, offers services like towing, jump-starts, and lockout assistance. Check your policy for included services and coverage details.