Car Insurance: A Detailed Guide

By Author: Neha Sharma
Total Articles: 170
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A car insurance is a contract that protects the customer from losses incurred during mishaps, in exchange for a premium paid to the insurance company. Such policies cover liabilities of not only the insured car and its owner but any third party that may be involved.

Third-Party Liability Insurance, which has been made mandatory for all vehicles, protects against injury to a third party or any damage to his property with some policies having built-in coverage that includes treatment costs, lost wages compensation, rehabilitations and even funerals.

However, as this policy does not protect the insured car or its owner, a more favoured option is a Comprehensive online Car Insurance, despite premiums being higher. A comprehensive policy not only provides personal accident cover, but also include co-passengers cover too (offered by some insurers), besides the insured car being protected against losses due to both, natural and man-made factors, or while in any type of transit.

At the time of buying a vehicle insurance, it is important to provide all relevant information to the insurer for the insured to be able ...
... to obtain a hassle-free settlement in the event of a claim. For a cashless claim, the insured must connect with an authorised garage for necessary repairs, but in the case of a reimbursement clause, the car must be fixed first by the insured and the payment receipts submitted with the insurer. For a proper settlement process, it is advisable to file a FIR and simultaneously informing the insurance company so an accurate evaluation of damage can be undertaken by a company representative.

Claims may get rejected due to several reasons. Inaccurate information provided to the insurer or not informing the insurer within a specified timeline are some common reasons. So are driving without licence or driving under the influence of alcohol and drugs. Making repairs without informing the insurer can also lead to rejection. Quite importantly, claims need to be considered wisely as a claim-free year entitles the insured to rebates on premium paid.

Depreciation is a deciding factor with regards to claims. IDV (Insured Declared Value) of a car is its present market value, taking depreciation into account, on the basis of which the premium amount is calculated. So, for luxury cars with high replacement and repair costs, it is a necessity to opt for a Zero Depreciation Cover, also known as Bumper to Bumper Cover.

Lastly, buying a car insurance should be preceded by a satisfactory comparison between various policies on offer which are provided on many website platforms, saving on extensive searches on the internet, and saving costs at the time of purchase too.

Author bio:
Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about car insurance. Through her work, she gives us a detailed guide about the same.