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Understanding Auto Insurance

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Understanding Auto Insurance
4.7 (94.78%) 23 votes

For a first-time vehicle owner, it can be difficult to choose what to buy from among all the different types of Motor/Auto insurance available in the market. Not only are there various options such as light motor/auto vehicles, heavy vehicle or two wheeler insurance, there is basic coverage, comprehensive plans and various riders to opt for; from various insurance service providers as well.

 

Private or commercial vehicle insurance

The type of insurance you buy also depends upon your purpose of vehicle use. People who own a vehicle for their own personal use would need personal vehicle insurance. However, truck operators, taxi-owners, auto rickshaw owners would need commercial vehicle insurance. Business owners or those who use a company car would also have to choose the appropriate type of insurance. There are specific types of insurance policies for goods carrying vehicles, passenger carrier vehicles and miscellaneous other types of commercial vehicles as well.

 

Car and two-wheeler insurance

It has become very easy to buy car and bike insurance online now. A few factors could impact the insurance renewal: the year of manufacture, model and variant of that particular model are all important. The place of registration and the vehicle’s insurance declared value is also important here. In addition, the cubic capacity of a two-wheeler is also relevant for calculating insurance premium payable.

 

Third party and comprehensive vehicle insurance

Indian laws require every vehicle owner to buy third party insurance, which protects third parties (other than the insurance provider and the policyholder) in case of an accident or claim. This is mandatory; however, vehicle owners can opt for comprehensive insurance packages or optional riders for greater protection and peace of mind. Comprehensive car or two-wheeler insurance policy will include third party cover as well as cover for theft and damage to the vehicle.

 

Different types of auto insurance riders

Vehicle owners can opt for various add-on features or riders as required: personal accident-cover for the owner or driver and/or for named / unnamed passengers employed driver. A policyholder can also opt for disability insurance as an addendum to a basic or comprehensive policy. Insurance providers also offer optional riders for accessories and vehicle parts such as lamps, tires, lamps, mud guards, bumpers, paintwork etc. which may not be covered by a basic policy. A policyholder can also opt for key replacement riders (reimbursement in case of loss of ignition key). Ordinarily, electrical or mechanical breakdown of a vehicle and the daily wear and tear are not covered under vehicle/auto insurance.

 

Different features of a vehicle insurance policy

It is understood that buying insurance online is quick and convenient; offering policyholders the widest range of options. It makes more sense to buy car or bike insurance online since processes are streamlined and buyers deal directly with the insurance company. Ideally, a policy should provide for round the clock claims assistance since accidents can happen at any time of the day or night. Cashless claim is another feature to look out for in a vehicle/auto insurance policy. This means that a policyholder can get service of his claim at any of the company network of garages or workshops all over India without having to make an upfront payment. A good no-claims bonus/incentive is another feature to look out for. If the policyholder made no claim under a policy during the previous year, the insurance company may offer discounts on the renewal premiums of offer additional features along with the renewed policy.

From the foregoing it is obvious that not only are there different types of auto insurance and insurance providers, it is also possible to create a vehicle/auto insurance policy to suit your requirements by customizing it and adding riders that suit your particular requirements.

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