Car insurance is an insurance policy that protects the car owner from financial losses arising out of unfortunate events such as accident, theft or damage of the car. It is mandatory by law in India, and serves as a financial security for the owner and the vehicle.
According to the Motor Vehicle Act, 1988 it is compulsory that every vehicle being driven on the road should be insured with a liability only cover. This will ensure that any damage done by your vehicle to a third party will be covered in a claim.
Broadly there are two types of insurances policies that offer Car Insurance cover:
If you take a Liability Only Policy, then damage to your vehicle will not be covered. Hence, it is advisable to take a comprehensive Policy which would give a wider cover, including cover for your vehicle. It includes various add on covers, on payment of a minimal extra amount of premium.
The damages to your vehicle due to the following perils are usually covered under Own Damage section of the Car Insurance policy:
The following contingencies are usually excluded under the Car Insurance Policy:
The following factors help determine the premium:
The premium may be lesser of one insurer but may have higher deductibles, lower coverage and lower IDV, which will adversely impact the insured in the event of claim settlement.
It is the maximum amount to be paid by an insurer at the time of claim settlement. It is the sum insured and is fixed at the commencement of each policy period
This offers complete coverage of the vehicle without factoring in depreciation. It means, if your car gets damaged following a collision, you will receive the entire cost from the insurer without deduction of depreciation. It covers all fibre, metal and plastic parts. There are other add on covers which can be clubbed together like engine cover, tyre cover, return to invoice, RSA, personal belongings etc
It is a discount available in the renewal premium offered by insurance companies if a vehicle owner has not made a claim during the last term of the car insurance policy.
Covers the owner of vehicle against any legal liability arising out of any property damage or bodily injury to third parties. The limit for third party property damage cover is restricted up to maximum Rs.7.5 lakh, whereas there is no limit restriction on third party bodily injuries.
It is the first amount to borne by the insured for each and every claim reported.the insurance company has decided that you will pay at the time of a claim settlement. For sub 1500 cc vehicles it is Rs 1500 and for vehicles above 1500CC it is Rs. 2000.
It covers engine damage due to water ingression or oil leakage.
No.
Total loss means accidental damage of the vehicle where the insurance company’s share is more than 75% of the IDV.
While generally it is three times, it could vary from company to company.
This covers the cost of replacement when a key is lost or stolen.
The car owner is paid fixed daily allowance for certain number of days if the car has been taken to workshop.
Insurance companies offer a discount on the premium for installing anti-theft devices approved by Automobile Research Institute of India (ARAI). These devices enhance security and reduce the chances of making a claim, hence adding the benefit of discount.
Yes, but inspection of the vehicle is required.However, No Claim Bonus (NCB) can be protected till the expiry of 90 days from the date of expiry.
Legally anyone driving a car, must hold a valid driving license. In this scenario, it is the owner's responsibility to ensure that his vehicle is being driven by someone with a valid driving license and that the driver is not under the influence of alcohol or drugs.
According to the Supreme Court order, IRDA has mandated all general insurance companies to offer multi-year third party insurance to all motor vehicles sold after 1st September, 2018. Therefore, instead of single third party liability plans, insurance companies will offer 3 year third party liability plans to carcars and 5 year third party liability plans to two wheelers.
You will have to inform the insurer about this, as the cost of premium will differ based on the fuel type of your carcar.
This insurance policy provides cover against damages that may occur to a two-wheeler and/or its riders due to an unforeseen event like an accident, theft or natural disaster. It protects the vehicle owner against:
Third Party Insurance is a statutory requirement under the Motor Vehicles Act, 1988.
Broadly there are two types of insurances policies that offer Two-Wheeler Insurance cover:
The following contingencies are usually excluded under the Two-Wheeler Insurance Policy:
IDV or Insured Declared Value is the market value of the two-wheeler at the time of purchase of the policy, based on which the sum insured is decided against theft or accidental damages. With increasing age of the two-wheeler, IDV decreases due to depreciation, and the resultant premium paid also decreases.
It is a discount available in the renewal premium offered by insurance companies if the two-wheeler owner has not made a claim during the last term of the insurance policy.
If you are selling off or giving away your bike, it makes sense to transfer the ownership of your Two-Wheeler Insurance policy as well. You simply need to hand over all the related documents to the new owner and inform the Insurance company and RTO about the same. Please note that the NCB accumulated by you during your ownership period will not be transferred to the new owner.
If your Two-Wheeler Insurance policy expires, it has the following effects:
Yes, it can be replaced. Get in touch with the insurance company to make the effective changes.
According to the Supreme Court order, IRDA has mandated all general insurance companies to offer multi-year third party insurance to all motor vehicles sold after 1st September, 2018. Therefore, instead of single third party liability plans, insurance companies will offer 3 year third party liability plans to carcars and 5 year third party liability plans to two wheelers.
Yes, one can still get NCB on the expired insurance policy if it is renewed within 90 days of the policy expiration.
There are two types of commercial vehicle insurance policies:
Third-Party Liability such as bodily injury, death or damage to property of a third party by the insured vehicle.
Damage or loss to the insured vehicle
In India, commercial vehicles are used for all kinds of businesses. So whether a company owns a single van or an array of commercial vehicles, a commercial vehicle insurance is a must to secure themselves against unwanted risks and losses.
If the vehicle is being used for commercial purposes, then if the insured is even a sole proprietor he will need a commercial auto insurance policy.
This add-on cover secures the windshield glass in case of accidental breakage, or when need to be repaired/ replaced without affecting the NCB of the insured.
It is a discount available in the renewal premium offered by insurance companies if the policyholder has not made a claim during the last term of the minsurance policy.
IDV or Insured Declared Value is the market value of the commercial wheeler at the time of purchase of the policy, based on which the sum insured is decided against theft or accidental damages. With increasing age of the commercial-wheeler, IDV decreases due to depreciation, and the resultant premium paid also decreases.
This offers complete coverage of the vehicle without factoring in depreciation. It means, if the vehicle gets damaged following a collision, the insured will receive the entire cost from the insurer without deduction of depreciation. It covers all fibre, metal and plastic parts.
There are other add on covers which can be clubbed together like engine cover, tyre cover, return to invoice, RSA, personal belongings etc
Health Insurance is a kind of insurance that covers your medical expenses such as medical bills, hospitalization expenses etc resulting out of any illness/injury. A Health Insurance policy is a contract between an insurer and an individual /group wherein the insurer agrees to provide specified Health Insurance cover at a given "premium". It also provides tax benefits under section 80D of Income Tax Act, 1961.
There are two types of health insurance policies:
Family Floater is one single policy that takes care of the hospitalization expenses of your entire family. The policy has one single sum insured, which can be utilised by any/all insured persons in any proportion or amount subject to maximum of overall limit of the policy sum insured. Quite often Family floater plans are better than buying separate individual policies. Family Floater plans takes care of all the medical expenses during sudden illness, surgeries and accidents.Dependents are normally covered only upto a particular age limit or when unmarried.
Riders are additional covers that can be added to your health insurance policy. Some of the common riders are as follows:
This is the sum insured of the policy you take which should be calculated keeping your existing lifestyle, medical history, income, city of residence and age in mind.
It is a medical condition/disease that existed before obtaining the Health Insurance policy. Insurance companies usually do not cover such pre-existing conditions, till the first 4 years of continuous insurance cover.
1, 2 or 3 years.Opting for two years or more makes you eligible for discounts.
Certain Health Insurance policies pay for specified expenses towards general health check up once in a few years. In most cases this is available once in four years.
It is a Card that comes along with the health insurance policy which allows you to avail cashless hospitalisation normally issued by your Third Party Administrator.
Third Party Administrators (TPAs) are IRDA licensed entities who serve as intermediaries between the insurer and the insured to ensure smooth settlement of claims. Find the list of TPAs here.
Insurance companies through their TPA’s or inhouse arrangements have tie-up with several hospitals all over the country as part of their network. A cashless facility, allows a policyholder to take treatment in any of the network hospitals without having to pay the hospital bills as the payment is made to the hospital directly by the Insurer/TPA, on behalf of the insurance company. However, expenses beyond the limits or sub-limits allowed by the insurance policy or expenses not covered under the policy have to be settled by you directly with the hospital. Cashless facility, however, is not available if you take treatment in a hospital that is not in the network.
Yes, you can within the free look period, which is generally 15 days after buying a policy. You will get a refund after deducting the pre-acceptance medical screening and underwriting expenses.
Any number of claims is allowed during the policy period unless there is a specific cap prescribed in any policy. However, the sum insured is the maximum limit under the policy.
Yes. When you get a new policy, generally, there will be a 30 days waiting period starting from the policy inception date, during which period any hospitalization charges will not be payable by the insurance companies. However, this is not applicable to any emergency hospitalization occurring due to an accident. This waiting period will not be applicable for subsequent policies under renewal in continuation.
The following documents are generally required for purchasing a health insurance policy:
Health Insurance comes with attractive tax benefits as an added incentive. Section 80D of the Income Tax Act provides tax benefits for Health Insurance. Currently, any person who has purchased Health Insurance policy by any payment mode other than cash can avail of an annual deduction of Rs. 25000 from their taxable income for payment of Health Insurance premium for self, spouse and dependent children.
If an Individual purchases Health Insurance for parents, then he can avail annual deduction of Rs. 25000/- from his/her taxable income. Further additional annual deduction of Rs. 5000/- can be availed if the pParents are sSenior cCitizen i.e. Age of Parents is above the age of 60 years at the time of policy the purchase. This is in addition to the exemption toward expenses incurred on preventive health check up.
A Critical Illness Insurance Policy is a health insurance plan that pays the sum insured as lump sum on first diagnosis of any serious ailment listed as a Critical Illness in the policy terms. It is generally required that the policyholder survives a period of 30 days from the date of the first diagnosis.However, there are a few insurance companies which pays the lumpsum compensation even at the time of diagnose of critical illness and no survival period is required.
The following are normally covered Critical Illnesses with various Insurance Companies.
However same varies from insurer to insurer and more and more insurers are covering more and more illness:
SInce the coverage could differ from policy to policy and hence it is crucial to compare the illnesses covered before buying the policy.
Any ailment, injury or related condition(s) for which the insured person had signs or symptoms and/or was diagnosed and/or received medical advice/treatment within 48 months prior to the first policy with the Insurance Company.
Under a benefit policy, the policyholder is paid a lump sum amount if the insured event takes place.
Yes, the policyholder can avail upto Rs.15,000 as tax benefit under ‘Section 80D’. In case of senior citizens, you can avail upto Rs.20,000 as tax benefit under 'Section 80D'.
The Insured shall submit the following documents to process claims within 45 days from the date of intimation:.
Personal Accident Insurance policy provides complete financial protection to the policyholder against uncertainties resulting from any accident. The coverage includes:
An accident can happen anytime to anyone resulting in injury, partial/permanent disability or even death. While this insurance product is suggested for anyone who travels a lot for life support or financial support, it is no less valuable for homemakers. This policy comes in handy to meet expenses in the case of unpredictable accidental crisis
A personal accident insurance policy does not provide coverage for the following:
Personal Accident policies offer worldwide coverage. Your claim will be paid even if you meet with an accident overseas.
A Life insurance offers death benefit to your nominee in case you pass away. Health insurance provides a compensation towards your hospitalization and other medical expenses. But a Personal Accident Insurance policy, insures you against the financial risk that could arise due to accidental permanent total disability or accidental death of an earning family member. In short, the policy is essential as it strengthens your financial portfolio and secures the future of dependent family members against unforeseen events.
Yes, it does cover accidental death, in which case the sum insured will be paid to the nominee as mentioned in the policy document.
Yes, an additional cover of accidental hospitalisation will reimburse your hospitalisation and medical expenses resulting out of an accident. A Daily Cash Cover provides a cash allowance for each day of hospitalisation.
The following documents are required in the claim process depending on the severity of the accidental impact:
A pure protection life cover, term plans are highly cost effective and simple forms of life insurance. In case of demise of the policyholder, the sum assured is paid to the nominee. However, no benefit is payable in case the insured survives the complete policy term.
Terms plans are an indispensable cover for the earning member of the family, to safeguard the dependents against his/her unforeseen death. It serves as financial backup to sustain the family’s lifestyle and to meet any liabilities. It is cost effective and also has tax benefits under Section 80C and 10(10D) of the Income Tax Act, 1956.
The good estimate of calculating the insurance amount is 10 to 15 times of one’s annual income. However your advisor may help you in ascertaining it more accurately using a Human Life Value Calculator for insurance purpose. It takes into account your assets, liabilities and income /expenses in absence of insured. An important factor to consider is the age of the insured and the age of respective dependents. If one has smaller children, then the cover would need to be higher to match their needs till they can become independent.
It should ideally be the number of years your family will be dependent on you financially.
Once the policy is issued, the premium remains the same throughout the policy tenure. This is subject to service tax regulations as declared by the Government of India.
Once the policy has been taken, you cannot modify the sum assured. However, there are certain plans that have a feature of increased income facility, offering the benefit of increased monthly income every. Year.
The insured’s health condition is directly proportional to the premium paid. Since the chances of a healthy person being hospitalized or falling sick is much lesser, the premiums are automatically lower. Similarly, a younger person is likely to have lesser pre-existing diseases resulting in lower premium rates.
As per the existing rules and regulations, insurance companies charge higher premiums from smokers and tobacco users as they are more prone to diseases, lung and heart disorders etc. Hence to combat this high risk, insurers charge a comparatively higher premium rate from smokers.
While, term insurance portability is not yet available, one can choose to take an added policy or surrender the old policy and take the new one. However, it is not advisable to surrender a policy because the cost of it is very high considering the premiums you have paid over the years without having availed any benefits. Furthermore, the premium of the new policy will also be high due to your increased age. Therefore, it is better to take an additional policy after declaring your current insurance plans.
Yes, the frequency of payments can be altered in the case of policy renewals.
Most insurance companies provide a grace period of 30 days to pay the premium and stop the policy from getting lapsed. The grace period is 15 days in the case of monthly instalment mode. If not paid within the grace period, the policy is considered lapsed.
Some of the ways to revive a lapsed policy are as follows:
The company checks the sum insured, the circumstances within which the claim is being filed and the duration of the policy, after which it asks the claimant to submit documents. For example, it asks for medical records in the case of illness, or in the case of an accidental death it asks for police report, post mortem port etc.
It generally takes 2-3 weeks after all the documents, necessary records, forms have been submitted. In case further verification is needed, the company accordingly informs the claimant.
The nominee as last recorded in the policy is entitled to receive the claim benefits, in case of demise of the policy holder.
Some of the main reasons wherein a claim may be rejected is as follows:
One can do so by either filling an online/ offline request with the insurance company or by simply discontinuing their renewal payments.
A child plan is an insurance cum investment policy that serves the dual purpose of securing the child’s future while also providing the means to finance crucial life stages like higher education, marriage etc
These following factors are crucial in deciding which policy and what coverage amount to be taken for their child:
Some of the important features of a child plan are as follows:
The person or entity entitled to receive the claim amount upon the death of the policyholder. Ensure hassle free and fast claim settlements for your loved ones by filing proper nomination.
A beneficiary is someone who gets all the benefits of a policy such as bonus, death benefits etc. irrespective of the policyholder being alive or dead. Whereas a nominee will only get death benefits. Hence the child in a child plan is a beneficiary and not a nominee.
The premium paid in a child plan can be deducted from taxable income under section 80C of the Income Tax Act. The lump sum amount one receives as survival benefit at maturity period of the policy is tax free as per section 10(10D).
Only parents (legal guardians) and grandparent can buy a child plan on behalf of the given child.
Insurance is a contract, represented by a policy, which financially protects an individual or entity by reimbursing against losses. The reimbursement is done by insurance companies (insurers) that pool clients' risks to make payments more affordable for the insured.
Risk is the uncertainty of an outcome. Higher the chances of an outcome being different from expectations, higher the risk.
An event or incident that may cause a loss. For eg. earthquake, fire, accident, theft etc.
The maximum compensation that will be paid by the insurance company in the event of a claim is known as sum insured.
Insurance Regulatory Development Authority is an autonomous statutory body that regulates and promotes that insurance and reinsurance sector in India.
There are two types of insurance:
An independent entity that carries out claim surveys and estimates the quantum of loss.
An independent entity that carries out claim surveys and estimates the quantum of loss.
A broker is an IRDA regulated entity that provides expert advice on the insurance policies suitable to the buyer and is paid a brokerage by the company whose policy the buyer finally choose.
A quick and hassle-free way of financially securing yourself and your loved ones against risks.
The following covers are generally provided under Travel Insurance:
The Sum Insured offered may vary and so would the premium rates, depending upon the country in question, apart from other factors such as Age, Period of Travel etc.
A travel insurance policy does not provide coverage for the following:
The duration of your cover depends on whether you have taken a single trip insurance or a multi trip insurance.
It is strongly recommended that you carry your travel insurance policy during your trip. However, if you have forgotten it, then you should have important details of your policy such as policy number, customer ID etc to avail its benefits.
Yes, you can cancel your policy in such a situation. You may have to submit a copy of your passport as proof that the journey was not undertaken. The premium is generally refunded after making certain deductions such as administrative costs.
This a crucial aspect to know beforehand. Most insurers provide hotline numbers where intimation of claim/s should be given. You must also notify the concerned authorities involved such as local police, embassy, transportation company etc, as applicable. The insurer must also be notified. Normally, every Travel Insurance policy docket will also contain a claim form as you will be away in a distant place and where you cannot obtain a claim form immediately.
Travel insurance doesn’t cover loss of debit/credit card, cash, cheques and bank notes
On buying a policy, you get an E card by the Insurance Company. One should register themselves on the number mentioned on the E Card to avail cashless facility benefits for treatment. Every insurance company has an authorized agency working abroad that settles all overseas claims. Usually, cashless benefits are available only for in-patient treatment and not for outpatient treatment.
Please read the policy terms thoroughly and understand whether there are such requirements. Prior approval would be required in most cases though there could be exceptions depending on the emergency involved. You should get this aspect clarified at the time of purchasing the policy.
Except in the case of hospitalisations, all claims will be settled post the insured’s return to India.
In most cases, your visa status or copy of passport and travel tickets would be sufficient to get overseas travel insurance.