Be a smart vehicle owner after reading this quick guide on motor insurance
A lot of time is often spent researching the latest model of a vehicle, the different colour variants, technology add-ons and other specifications! However, not many know too much about motor insurance and how important it is to spend some time on the same.
Here’s a quick, comprehensive guide to vehicle insurance for beginners.
What is motor insurance?
Motor insurance is also commonly referred to as auto-insurance or car insurance or auto insurance. It is an insurance policy which protects vehicles like personal bikes, cars, and commercial vehicles. Usually, auto insurance policies compensate the owner against the financial loss arising out of theft or damage to their motor-vehicle. Motor insurance also protects you from damage caused to a third-party individual, vehicle or property.
What are the types of auto insurance?
There are three types of motor insurance:
§ Private car insurance policy - It covers privately owned cars
§ Two-wheeler insurance policy – It covers two-wheelers which are privately owned and used
§ Commercial vehicle insurance policy - It covers vehicles meant for commercial use. This type of policy can be further subdivided into the following two types –
Passenger-carrying vehicles insurance: it covers passenger-carrying vehicles like bikes, taxis, and buses
Goods-carrying vehicles insurance: it covers vehicles which are used for the transportation of goods, like trailers, lorry, and trucks
Private car insurance policy, two-wheeler insurance policy, and commercial vehicle insurance policy can all be purchased online.
What should you consider while buying insurance?
There are many factors which can affect the price of an auto insurance policy-
Insured Declared Value/Market Value: The Insured Declared Value, also known as IDV is the current market value of your vehicle.
Claim History of Owner: The premium is impacted by the number of claims one makes in a year. When you don’t make a claim in a year, at the time of your policy renewal, you will be given a ‘No Claim Bonus. As the years pile on – your NCB will increase, and your premium will decrease.
Age of The Vehicle: This is an important factor in determining the cost of the auto insurance policy. The newer the vehicle, the higher the IDV and the premium.
Add-On Features: Most insurance companies offer special add on features to a auto insurance policy. For this added protection, you have to pay extra.
Owner’s Age: It is considered that as a person matures, their driving is less rash. Therefore, some companies may offer a discount on their auto insurance policy as the owner grows older.
Type of Motor Insurance Policy: The type of motor insurance policy also affects the premium.
A motor insurance policy is vital if you want to drive your vehicle on Indian roads in a worry-free manner. Therefore, understand the different types of motor insurance plans available in the market and choose the policy which provides the most suitable and inclusive coverage for your vehicle. Get any financial loss suffered duly compensated by the vehicle insurance policy and be a truly proud owner of your vehicle.