If you own a car in India, you would be aware that you are mandated to have a car insurance policy on your car, of course if you want to drive it legally on Indian roads.
This mandate comes from the Motor Vehicles Act, 1988 which dictates the road transport rules in India. Given this rule, a car insurance policy becomes mandatory and is offered by general insurance companies.
Let me help you understand what a car insurance policy is and the different aspects of the cover.
Why do I need Car Insurance?
A car insurance policy is mandatory under the rules of the Motor Vehicles Act, 1988 as a part of motor insurance. Thus, in order to legally drive your car in India, a car insurance policy is a prequisite.
Actually, policy grants financial assistance in case of third party liabilities and is highly beneficial.
In case, an individual suffers an injury or dies in a car accident, you can claim a considerable financial liability for the loss incurred. The policy covers this liability and gives you financial relief.
Moreover, there are policies which even cover the damages suffered by the car or due to theft of the car which also results in a considerable financial loss. Such policies indemnify for the repair of the car thereby preventing any financial strain that you are likely face.
What are the various long term policies available for car insurance online?
There are several long-term car insurance coverage options that you can buy.
You can purchase a three year long term comprehensive policy covering third party liabilities and damages suffered by the car for three consecutive years.
In addition to this, there is a bundled car insurance plan which offers for one’s own damage cover for one year whereas the third party coverage is subject to three continuous years.
You may also buy a third party liability cover for three consecutive years by virtue of payment of the premium upfront. These long-term car insurance plans are being offered for new cars bought on or after 1st September 2018.
For cars which launched before this period, one year comprehensive and third party liability policies are available . You can search for the long term policies offered by leading insurance companies at Policystar. Policystar helps you provide relevant info so that you to invest in the best car insurance policy suitable as per your requirement after comparing the various available plans.
What are the benefits of buying Car Insurance online?
While buying a car insurance policy online, you can compare the available options and then zero in on the best plan.
There is a plethora of car insurance policies and thus the need for comparison arises.
Find the policy which offers the best coverage benefits for you at the lowest premium rates. The online medium allows you the facility to compare and buy car insurance plans. You can find the best premium rates through the online platforms.
Moreover, the buying process is hassle-free and allows you to buy the best plans within a few finger taps. Policystar is an emerging online platform which allows you to research and find the best car insurance policies prevailing in the market.
What Motor Insurance cover should I buy?
As far as rules are concerned, only third party liability cover is compulsory for your car as per the rules of the Motor Vehicles Act, 1988.
However, the policy only covers your third party liabilities. If your car suffers any kind of damage, which is common, coverage is not allowed under third party plans.
Considering this restricted scope of coverage, a comprehensive car insurance policy seems more favourable.
Should I buy Comprehensive Insurance or Liability Policy only?
This depends upon your requirement. The Comprehensive policy covers third party liabilities as well as car damages.
Adding to it, the comprehensive plans have optional add-ons which enable in widening the scope of coverage, allowing you financial assistance in any type of car-related contingency that you are likely to incur.
Hence, a comprehensive policy is recommended for an all-round protection. Buying car insurance online is very easy these days, you can simply visit website of any insurance company and buy your car insurance policy.
Are there discounts that will lower my premium?
Yes, there is a plethora of discounts under car insurance plans which allow you to lower your overall premium rates.
These discounts are allowed under comprehensive and third party both type of car insurance plans. You can avail a discount if you opt for a long-term cover and pay premiums in lumpsum.
There is also no claim bonus, rather a discount wherein your premium reduces by 10% to 50% in case you do not avail any claims in your on going policy.
With the advancement in technology these days, there is a certain discount for installing safety devices inside the car or for seeking membership of a reputed automobile association.
Also, If the car is put to modification for use by a disabled, then this attracts a premium discount as well. Multiple insurance companies also offer discounts if the policy is purchased online or if you have an existing insurance policy with the same company.
Also, you may claim a premium discount if you opt for a voluntary deductible and choose to pay premiums yourself.
Is Service Tax applicable and how much is it?
No, post the GST regime, the concept of service tax in no longer valid. In modern times, GST is applicable on car insurance premiums and this GST is calculated @18% on the premium of the policy.
If I fit CNG or LPG kit in my vehicle, is it necessary to inform the Insurance Company?
Yes, if you are planning or have fitted a CNG or a LPG kit in your car, it is necessary to intimate the insurance company about it.
This is because these extra changes are required to be recorded in the policy. Moreover, such changes also affect the value of the car. On being informed, the car insurance company can make the necessary changes in the policy and charge the modified premium rate. The policy would then also cover the kits installed.
But in case the company is not informed about the kit, any claims arising because of the installed kit and the resultant damage shall not be covered under the car insurance policy.
Hence you should always inform the insurance company of such major changes in your car. Simplest way is to initiate with sending and email to insurance company for your car insurance online.
What are the documents to be kept in the vehicle while plying in public places?
This is a very general and a common question to almost all of us.
When ever you are driving your vehicle we recommend you to always keep a copy of your motor insurance policy, driving license and PUC certificate.
Also, the registration document of the vehicle, RC book, should also be kept in the vehicle at all times.
This would help you when you are caught by traffic police and have to submit proof of registration, insurance and PUC.
Can I continue the insurance in the name of the previous owner even after the vehicle is transferred in RTO records in my name?
No, you this is not allowed legally.
In case you are planning to or have already purchased a second hand vehicle and the registration certificate has been transferred to your name as the vehicle owner, you need to obtain a new car insurance policy on the vehicle or request the insurance company to make changes in the existing policy (basically update your name on it).
When the vehicle is sold and the registration certificate is transferred from the seller to the buyer, the seller’s insurance policy automatically becomes ineffective.
To continue insurance coverage you would have to apply for a fresh policy on the vehicle that you have bought. That is why you can submit a fresh proposal to the seller’s insurance company to transfer the insurance policy to your name. This is termed as endorsement (meaning making change in the existing policy).
You can simply fill the details and submit the required documents of transfer of ownership of the vehicle, updated RC book and a transfer fee to get the policy transferred to your name. Simplest method can be mailing to the insurance company with these details for your car insurance online.
I have lost the insurance policy. Can I get a duplicate one?
Yes, why not!
You can obtain a duplicate insurance policy.
To secure a duplicate policy, you can request the broker or the Insurance Company. They shall assist individuals with any policy-related services that they may require. Simply place a request with your insurance company for issuance of a duplicate copy of your policy.
The request must be recorded in writing to the insurance company for a duplicate policy. Some companies also allow you to request for a duplicate policy for your car insurance online or through their customer care executives.
You have to fill a form and submit it along with a prescribed fee to issue a duplicate policy document and the insurance company would do the necessary.
How is the value of the vehicle (IDV – Insured Declared Value) determined?
The value of the Insured Declared Value (IDV) is computed after deduction of the car’s market value with depreciation considering the age of the car.
The market value includes the cost of accessories fitted in the car but excludes the registration cost and insurance expenses. The depreciation rate is fixed by IRDA and depends on the car’s age.
While buying car insurance online, you can try changing the IDV and witness the changes in premiums. It is 5% if the car is aged up to 6 month, 15% if the age is more than 6 months but below a year. If the car’s age is more than a year but less than 2 years, the depreciation is 20% and for more than two years but up to three , the rate is 30%. For cars aged more than 3 years but below 4 years, the depreciation is charged at 40% and for cars aged more than 4 years but less than 5 years, the rate of depreciation is 50%.
For cars beyond 5 years old, the IDV is fixed in mutual agreement between the insurance company and the policyholder. After deducting the applicable rate of depreciation from the market value on the basis of the age of the car, the IDV is determined.
What will happen when you sell your car?
The original owner of the car is required to carry out two things on the event of sale of his car. Firstly, you would have to transfer the ownership of the car in the name of the buyer legally.
This change in ownership is done by transferring the RC book from your name to the name of the buyer. This is further implemented by filling and submitting relevant Forms i.e. Form 28, 29 and 30 to the RTO for notifying the RTO of the change in ownership.
Other documents like a clearance certificate, buyer’s identity proof, sale agreement, etc. should be submitted to the RTO. Based on the documents submitted, the RTO would transfer the ownership and issue a new RC book containing the buyer’s name as the owner of the car.
Thereafter, the insurance policy also needs to be transferred. To do so, the current policy document, sale-related documents, updated RC book, buyer’s identity proof and a proposal would be filed to the insurance company for ownership transfer of the insurance policy.
Furthermore, the insurance policy would be transferred to the buyer’s name and the process would be duly completed in all aspects.
Can someone else drive my car if I have insurance?
Driving is not dependent upon the details mentioned in the policy document.
Yes, anyone can drive your car as long as there is an insurance cover on the car. However, the one of the top condition is that individual driving the car should have a valid driving license.
In case of a claim if you face any expenses arising due to car it will be covered even if someone else was driving the car along with these, there are other rules which you can see on Indian Government Motor Driving License website.
We recommend reading your policy wording which you receive while buying car insurance online thoroughly.
What happens if I lie about my driving history?
You should never lie about your driving history.
If you lie about your driving history and the insurance company finds out about the same, the policy can be cancelled if there is a claim due to a bad driving history.
So, its always better to disclose all information to the insurance company at the time of buying the policy so that there is no issue in case you file a claim.
Will my red car make my insurance bills more expensive?
No, the colour of your car does not affect the premiums of your car insurance policies.
The insurance company or the broker will not ask the colour of your car to determine the premium at the time of granting you coverage.
Can you be main driver on 2 cars?
Yes, if you have two or even more than two cars on your name, you can be the main driver on all the cars.
Its just that the car insurance policy would be issued on your name for all the cars and you would be the policyholder for both the cars if you are their legal owner.