Questions

• What is motor insurance?
• What are the benefits of motor insurance?
• Is it mandatory to have motor insurance in India?
• What are the types of motor insurance in india?
• What are the risks covered by the Third Party policy?
• What are the risks covered by the Comprehensive policy?
• How long should I cover my vehicle?
• Which is a better policy: Comprehensive or third party policy?
• Why do premiums vary between different insurance companies?
• What factors determine the premium amount?
• Can I take a policy for a vehicle belonging to someone else?
• Can I renew my motor policy online?
• What motor insurance doesn’t cover?
• Is travel insurance provided for domestic travel as well?

What is motor insurance?

Motor insurance is done to protect your vehicle from unforeseen risks. It basically provides protection against the losses incurred as a result of unavoidable instances. It helps cover against theft, financial loss caused by accidents and any subsequent liabilities. The cover level of Motor insurance can be the insured party, the insured vehicle and third parties (motor and people). The premium of the insurance is dependent on certain parameters like value of the motor, type of coverage, vehicle classification; voluntary excess etc.

What are the benefits of motor insurance?

All the states in India require a minimum amount of insurance. Motor insurance can help offset the loss of huge sum in the following manner:

• Provides benefits to survivors when an accident results in death
• It covers lawsuits, including legal fees brought against you as the result of an accident
• Covers the bills of vehicle repairs due to damage caused in an accident
• Covers damage caused by other than an accident for example, theft, fire, etc
• Additional discounts: Motor insurance policies allow premium discounts for theft or for owning more than one policy with the same insurer. It also provides added advantage to extend coverage to others driving your motor with your permission
• No Claim Bonus: If you do not make a claim during the policy period, a No Claim Bonus is offered on renewals provided you fulfill certain terms and conditions

Is it mandatory to have motor insurance in India?

Yes it is mandatory under the Motor Vehicles Act 1988 to get your motor insured as soon as you purchase it.

What are the types of motor insurance in india?

There are two types of motor insurance:

• Third Party Insurance
• Comprehensive Insurance

Comprehensive Insurance

The Third Party motor insurance policy covers a vehicle owner's legal liability for any compensation to be paid arising from any accident caused by the use of the vehicle. These include:

What are the risks covered by the Comprehensive policy?

In addition to the cover provided by the Third Party motor insurance plan, the Comprehensive insurance policy protects you against any loss or damage caused to the vehicle and its insured accessories due to natural and man-made calamities. These include:

Natural calamities, such as fire, explosion, self ignition or lightning, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide, and fire and shock damage due to earthquake

Man-made calamities, such as burglary, housebreaking or theft, riot or strike, accident by external means, malicious act, terrorist activity and damage during travel by road, rail, inland-waterway, air, or elevator

This policy also includes personal accident cover, which provides compulsory accident cover for the owner of the vehicle while driving. The owner can also avail personal accident cover for passengers in the vehicle.

How long should I cover my vehicle?

Your vehicle has to be insured at all times. This is required by law. All motor insurance plans are annual policies issued for a period of twelve months. Therefore, you need to know when your insurance renewal is coming up. However, an extension for less than 12 months or a policy for a short period can be provided with special approval from a competent authority in the motor insurance company.

Which is a better policy: Comprehensive or third party policy?

Comprehensive motor policy is better as it provides both third party coverage and damages/loss to one's own vehicle, co-passengers or self.

Why do premiums vary between different insurance companies?

Insurance companies work with different statistics and use different methods to calculate premiums. Some companies are specialized in certain areas or types and so are prepared to give discounts in those areas. This adds to the complexity as various companies yield varied prices.

What factors determine the premium amount?

1. Make and Model of the Vehicle
2. Year of Manufacture
3. Place of Registration
4. Current Showroom price of the vehicle
5. Whether Client is Individual or Corporate

Can I take a policy for a vehicle belonging to someone else?

Yes. The person buying a policy need not be the owner; anyone can purchase insurance on behalf of the insured.

Can I renew my motor policy online?

Yes, provided it is renewed between the period starting two months before expiry and six days after expiry of the previous policy.

What motor insurance doesn’t cover?

Motor Insurance doesn’t cover consequential loss, depreciation, wears and tears, mechanical and electrical breakdown, war perils, drunken driving or vehicle driven by some one else other than the driver stated

in driver's clause. The insurance also does not cover failure or breakage when the vehicle is used outside the geographical area.