If you are reading this, you probably are looking forward to a quick and easy guide to understanding motor insurance. So, here it is!
Need for Motor Insurance
Apart from being mandatory under the Motor Vehicle Act (1988), a motor insurance policy is essential to ensure peace of mind and financial security. Listed below are a few benefits of getting your car insured:
• Who needs motor insurance?
Any individual who owns a motor vehicle.
• How do I get insured? I am purchasing a car.
Your car dealer would offer a comprehensive insurance plan. To know what you are buying, stay with us as we demystify car insurance.
• Where can I renew my car insurance policy?
You can renew it anywhere you want. All you need to do is log online and fill up the online renewal form.
• Financial assistance in case of damage or theft
• Monetary compensation to a third party who has been inconvenienced due to your vehicle
• Coverage of accidental medical expenses
• Compensation to nominee on succumbing to a fatal mishap
• Compensation to unnamed passengers on meeting with an accident
• Compensation on permanent total disability due to accident
• Cashless servicing of your car at select garages
• Minimal out-of-pocket expenses for maintenance of car
• Towing assistance and other emergency services on car breakdown
ABC of Motor Insurance
A motor insurance policy comprises of three components. You can opt for a limited cover or a comprehensive one depending on your requirement.
A - Third Party Liability (TPL) Cover
• Why Opt For It: Third Party Liability Insurance is compulsory under law.
• What Does it Cover: It safeguards you from legal liability and protects a third person against losses due to permanent injury/ death and damage to property.
• Extent of Cover: Rs. 7.5 lakhs is the maximum sum insured for damage to property. In case of death or injury to a third person, an unlimited amount of liability is covered under this policy.
• Good to Remember: The plan does NOT reimburse expenses borne by you towards repair or maintenance of your car.
B - Own Damage (OD) Insurance
• Why Opt For It: To avoid monetary losses in case your car or its accessories are damaged/ stolen.
• What Does it Cover: This policy covers loss or damage to your car due to various natural (fire, cyclone, earthquake, rockslide, etc.) and man-made calamities (burglary, theft, acts of terrorism, riots, etc.)
• Extent of Cover: The extent of cover you are eligible for depends on your car's IDV (Insured Declared Value). This is best defined as:
Ex-showroom Price of Your Car + Cost of accessories-Depreciation (as per a pre-determined depreciation rate table provided by the IRDA)
• Good to Remember: Though not compulsory under the law, Own Damage Insurance is strongly recommended for all car enthusiasts.
C - Personal Accident (PA) Cover
• Why Opt For It: The cover is compulsory for the owner-driver of a vehicle. It offers financial security to you and your family in the unfortunate event of meeting with an accident.
• What Does it Cover: It provides compensation on death or permanent total disability. Hospitalization expenses due to accidents are also covered.
• Extent of Cover: While it is mandatory for the owner driver to opt for a PA cover, it is optional to choose one for unnamed passengers. (PA Range: Rs. 10,000 to Rs, 2,00,000)
• Good to Remember: This must-have policy secures your family's future in your absence or in the unfortunate event of your disablement.
|Personal Accident Cover
||Scale Of Compensation
|Loss of two limbs or sight of both eyes or one limb and sight of one eye
|Loss of one limb or sight of one eye
|Permanent total disablement from injuries other than named above
What is not covered under Motor Insurance Policy?
• Mechanical breakdown
• Consequential loss
•Wear and Tear
•Any contractual liability
• Intoxicated driving
• Deliberate accidental loss
• Damages due to nuclear weapons material or war
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