Benefits of a Car Insurance Policy

As per the Motor Vehicles Act, 1988, car insurance is mandatory in India and it is illegal to drive an automobile that is not insured. Even if you are a careful driver, an accident might still occur due to someone else’s negligence or through acts of God. Hence, having an insurance policy is the best way to protect oneself from any such untoward incidents.

To begin with, car insurance protects automobiles from damages caused by natural or man-made calamities. Natural calamities include flooding, earthquakes, landslides, lightning, heavy storms, etc., while incidents that occur due to human ignorance, negligence, and/ or deliberate malicious acts are man-made calamities. These broadly include accidents, vandalism, theft, acts of terror, etc.

Nonetheless, a comprehensive motor insurance policy hedges you from both natural as well as man-made calamities. It also ensures protection from any legal liability arising out of damages or injuries caused to a third-party.

Let’s look into some of the benefits of having a car insurance policy:

  1. Cashless network garages

Car insurance providers have their own network of garages to assess the damage and repair an insured car and the provider then directly handles the expenses incurred. This allows the owner to be free of any hassles that might arise regarding the settlement of expenses. However, you’re required to pay the difference amount, if any, as advised by the claims manager to the garage.

However, the depreciation amount, according to the rate prescribed under the Indian Motor Tariff and Compulsory Deductions under the policy, needs to be borne by the insured.

The major benefit of having a Cashless Motor Insurance would be that it reduces your stress as well as the many formalities that claim processes involve.

  1. No Claim Bonus

No Claim Bonus (NCB) is a concession is given by the insurer to the policyholder for making no claims in a given year. To elaborate, if you haven’t claimed insurance during the preceding year of cover, NCB would be available for you. For starters, it progressively reduces your insurance premium. NCB is also transferable to a new vehicle if you decide to change your vehicle at any given time in the future. Additionally, this also reduces the car insurance renewal premium depending upon the number of claim-free years.

  1. Zero Depreciation

Zero depreciation is an add-on car insurance cover that offers full settlement without any write-off for depreciation as opposed to regular car insurance. However, this coverage charges a premium amount as compared to a regular car insurance policy. Usually, mid- and top-tier expensive and luxury car-owners opt for this coverage as they prefer to avail optimum benefits.

  1. Personal accident cover

Personal accident insurance covers death or disability caused due to an accident. In case utilization of this cover is required, the final compensation amount depends on the extent of cover opted for.

  1. Voluntary deductible

The amount you opt to pay over and above the compulsive deductible in the event of filing a claim is known as Voluntary Deductible. As per Indian Motor Tariff, the final claim amount is calculated after the deduction of depreciation on parts, VD, and compulsory deductible. Opting to pay a voluntary deductible results in a significant deduction on the premium amount.

It is advised that you go through the policy wordings of general insurance plans before you proceed to buy them. This proves to be helpful when you need to claim your policy as you would be aware of the inclusion and claim procedure.