Vehicle Insurance is coverage for compensation in regards to damage caused to your vehicle or loss of the vehicle.It is important to secure your vehicle with Insurance. In case the damage is caused to the insured vehicle than the company will bear the expense.
WHAT ARE THE REASONS BECAUSE OF WHICH VEHICLE INSURANCE IS IMPORTANT?
- Damage caused due to natural calamity like earthquake, flood, lightening
- If Damage caused due to theft, fire, riots and terrorist activities
- Damage caused due to accident
- If Damage caused during transit through railways, roadways or waterways
WHAT ARE THE TYPES OF VEHICLE INSURANCE AVAILABLE?
There are different types of Vehicle insurance available in the market. Few of them being as follows:
- TWO-WHEELER INSURANCE
Getting one’s two-wheeler insured, Example: Scooter, Motor-cycle. In such a case, if the insured’s two-wheeler is met with an accident; then the Insurance Company will bear the loss as per their terms and condition.
- PRIVATE CAR INSURANCE
It means getting your four-wheeler which is registered for private use, insured from Insurance company example Car. In case the four-wheeler is met with an accident, then the company is liable to pay for the damage up to a certain extent.
- THIRD PARTY INSURANCE
It is an option given by the government to take only third party insurance. It means if someone else (third party) is met with an accident caused by the insured vehicle, then the compensation will be paid by the insurance company as per the court orders. Benefits and premium of third party Insurance are standard for all the companies. It is also mandatory to have your vehicle to have third party insurance as per company rules.
- COMMERCIAL VEHICLE INSURANCE
It means getting your four-wheeler which is registered for commercial use, insured from Insurance company. Example Car, Bus, tempo traveller etc. In case the four-wheeler is met with an accident, then the insurance company is liable to pay for the damage up to a certain extent.
WHAT ARE THE FACTORS THAT AFFECT VEHICLE INSURANCE PREMIUM?
- INSURED DECLARED VALUE (IDV)
Commonly known as IDV or the sum assured. It is the present value of Vehicle after depreciation which the Insurance Company have approved. In simpler terms, it means if any damage happens to the Insured vehicle; then the Insurance Company is liable for the loss up to that amount.
- THIRD PARTY RATE
It is the most common phrase one hears for Vehicle Insurance. What exactly it means? It means if someone else (third party) is met with an accident caused by the insured vehicle; then the compensation will be paid by the insurance company as per the court orders. Benefits and Premium of third party insurance are standard for all the companies. It is also mandatory to have your vehicle to have third party insurance as per company rules.
- NO CLAIM BONUS (NCB)
NCB is the benefit provided by the company for each claim free year. This benefit is given in percentage and is standard across the industry. The slab for NCB is as follows:
|YEAR OF INSURANCE||NCB IN PERCENTAGE|
|1stYear of Insurance||0|
|2ndYear of Insurance||20%|
|3rd Year of Insurance||25%|
|4th Year of Insurance||35%|
|5th Year of Insurance||45%|
|6th Year of Insurance||50%|
- ZERO DEPRECIATION
Zero depreciation is the benefit provided by the insurance companies during first 5 years of vehicle insurance (especially car). If somebody has not taken a “0 Depreciation cover” and the vehicle is met with an accident; then the Insurance Company will pay the compensation. Compensation amount is calculated after deducting depreciation charges for each damaged part 9as per their standards mentioned in insurance policy). But, if the person has taken “0 Depreciation” cover then the insurance company will pay for the damage without deduction depreciation cost. For “0 Depreciation” feature the person will have to pay extra cost to the company.
- ADDITIONAL FEATURES
Apart from normal benefits companies provide below mentioned benefits as additional Features. In most of the cases, Insurance company provides it free of cost along with “0 Depreciation Insurance”. If not given, the person can pay a nominal amount to get the same. These are:
- LOSS OF KEY
In case the key of insured vehicle is lost, then the company will bear the cost of the loss of the key. But, it is an additional feature. And, the person will have to check at the time of taking the insurance, that whether this befit is provided by Insurance company or not.
- LOSS OF PERSONAL BELONGINGS
If something (personal belongings) is stolen from insured’s vehicle then Insurance company pays for loss up to a certain amount.
- ROAD-SIDE ASSISTANCE (RSA)
If the vehicle gets stuck on a road anywhere in India, then the company will send the representative without any extra cost. Few examples of getting car stuck could be: Vehicle ran out of fuel, sudden breakdown etc.
In most of the cases even if the vehicle is covered for 0 Depreciation then also the person might have to pay for few things like nut bolts etc. Therefore, if the client does not want to pay even a penny if the insured vehicle is met with an accident then the client should take consumable cover as well. The cost for this cover is a little extra
- RETURN TO INVOICE COVER
In case of Total loss or theft of your four, insurance company gives you the whole purchase Invoice value of Car, not the depreciated value
- VEHICLE REGISTRATION LOCATION
The premium of the Vehicle insurance also depends on the location from where the vehicle is registered. The location is divided into two parts Delhi & NCR region.
- CUBIC CAPACITY (CC)
The Premium of the vehicle also depends on the cubic capacity of the engine because the third party rates are fixed across the industry.
- AGE OF VEHICLE
The premium of the vehicle also depends on how old the car is.
- COMMERCIAL / PRIVATE NUMBER
The premium of the Car depends on the also depends whether the car’s registration is done for commercial use or for private use. Commercial Vehicle Insurance premium is on the higher end as compared to Private Insurance Vehicle.