How does a car insurance policy work?

On her way to work, Sharanya met with an accident. Her car insurance policy covered only third-party liability. This meant she had to now bear all her expenses, bills and repairs on her own. So many damages, just because she wanted to save a little on the premium and went for a limited coverage policy. This isn't an isolated incident; a total of 4,64,910 road accidents have been reported in India in the calendar year 2017, claiming 1,47,913 lives and causing injuries to 4,70,975 persons.

The Motor Vehicles Act, 1988 makes it mandatory for all vehicle owners to insure their vehicle if they want to drive legally on Indian roads. Of course, it is not just the mandate: car insurance is a precautionary financial measure undertaken to curtail losses that would otherwise, be incurred in the event of an accident. The numbers in terms of road accidents in India are alarming, so much so that even the most skilled driver is not immune to road catastrophes.

Vehicles are indeed a serious monetary investment for anyone and that makes them protection through car insurance policies even more crucial. Acting as a mutual agreement wherein the insured pays the insurance company a fixed annual premium and the insurer in return agrees to give a financial cover to the insured in case he/she suffers a financial loss due to an accident, theft or natural calamity, car insurance protects the insured against any financial contingency arising due to such unforeseen circumstances. Motor insurance accounted for 38.2 per cent of non-life insurance premiums earned in India in Apr-Dec 2018.

The nitty-gritty: Which policy to opt for?

Despite its importance, people rarely have complete information about what they are signing up for. Here’s all you need to know: Not every car insurance policy offers the same coverage. What does that mean? There are two main kinds of car insurance policies in India:

Third-party Car Insurance

A Third-party Policy is the most basic type encompassing the injuries caused to another person and his/her damaged property. This kind of insurance policy has the lowest car insurance premium. Buying a third-party car insurance policy is mandatory by law.

Comprehensive Car Insurance

As the name suggests, this policy covers all kinds of damages — to your car, another person’s property, and the insured car’s owner-driver. Cause of damages can include Collision, Theft, Fire, Sabotage, Natural occurrences or Man-made calamities. Since Comprehensive Car Insurance offers greater coverage than a Third-party Insurance, it costs more but is also preferable.

There are additions you can make to your insurance coverage at an additional cost.

Zero Depreciation or Bumper to Bumper Add-on, for instance, will mean that your insurer will not take depreciation (the decrease in the value of the car due to normal wear and tear) into account at the time of a claim. Unlimited claims are allowed under the Benefit Zero Depreciation. It has the highest premium of all policies, understandably.

Checklist before you apply for a car insurance policy:

• Keep your vehicle details ready (Year of purchase, RC document)
• Previous insurance policy details
• Decide on what type of motor insurance you would like to buy
• Add-on benefits to

Things you should know

At all times, the following documents need to be kept in the car:

• Certificate of Insurance
• A photocopy of registration certificate
• Pollution under control certificate
• Copy of Driving License of the person who drives the vehicle

Remember, you only need to carry the certificate of insurance in the car, the policy should be preserved separately at home/office.

A motor policy is usually valid for a period of one year and has to be renewed before the due date. Make sure you pay the premium on time because there is no grace period!

How to file a claim?

Collect relevant information to determine the nature of your claim. This would include the number plate, driver’s information and the extent of damage to both cars in case of an accident. And finding out whether it will be a third-party claim or own claim under the comprehensive coverage.

Notify your insurer about the accident or calamity so that they can act within their stipulated time window to get it processed. This is much easier if the policy is purchased online at Finserv Markets that provides 24 x 7 assistance. Anytime an accident happens, you can get immediate claims assistance.

Depending upon your situation, gather documents: duly filled claim form, registration copy of the vehicle, the original estimate of the loss, repair invoice (and payment receipt in case of a cash payment), Non-traceable certificate, and an FIR.

Conclusion: With the facilities of cashless settlements across a network of 4000+ garages, absence of commission, roadside assistance provision, and online renewal facility, buying a Bajaj Allianz Car Insurance policy online at Finserv Markets is the most productive way to go about buying car insurance online.