Vehicle insurance is a word that we all have heard, but do we really understand it? Whether you are a new driver or experienced, it is important to know why insurance is important to keep your car or bike safe. Let us understand every aspect of vehicle insurance in this article – cover repair costs, medical bills, or legal fees
What is vehicle insurance?
Vehicle Insurance is a legal agreement in which you pay premium to an insurance company, and in turn the company provides economic security in case of accident, theft, or damage. This covers not only your car, but also the responsibility of third party.
Why is insurance mandatory?
Under the Motor Vehicle Act, 1988 in India, it is mandatory for every vehicle owner to take third-party insurance. Its purpose is to ensure compensation to the people injured in the accident. A fine or vehicle can be seized for driving without insurance.
Type of vehicle insurance
Various types of vehicle insurance provide protection according to your needs:
1. Third-party insurance
This is the most basic insurance which is legally mandatory. It only covers the property or health damage of the third party (which was damaged by your mistake).
2. Comprehensive Insurance
This policy protects your vehicle from all risks, including theft, natural disaster, fire, or accident. Also, it also provides third-party coverage.
3. Standalone on Damage (OD) Insurance
If you only want insurance for your vehicle damage, take an OD policy. It bears the cost of repairing your car in theft or accident.
How is the premium fixed?
Vehicle insurance premium depends on many factors:
Vehicle type and value
Luxury cars have a high premium, as their repair is expensive.
Driver’s age and experience
Drivers under 25 years of age often have to pay high premiums, as they are considered risky.
Place
The metros have higher the rate of theft and accidents, so the premium is also high.
No-Claim Bonus (NCB)
If you have not made a claim last year, you get a discount on the premium in the form of NCB.
How to choose the right insurance policy?
1. Assess the needs
If your car is old, third-party insurance may be sufficient. Comprehensive policy is better for the new car.
2. Compare companies
Do not only see the premium – check the claim settlement ratio, customer service, and coverage details.
3. Add-on cover
Ad-hones such as engine protection, road side assistant, or medical cover can increase your safety.
Claim Process: Step by Step
1. Accident notice
Call the insurance company immediately and register an FIR.
2. Collect documents
Get the accident photos, police reports, and repair estimates.
3. Survey and approval
The insurance surveyor will check the damage. After that repair can be started.
4. Payment
The company can pay directly to the garage or will return you the amount.
Mistakes that should be avoided
1. Not reading policy details:
Many people sign without reading. Understand exclusions and conditions.
2. Reducing coverage to save premium
Claim can later cause problems if you take cheap policy.
3.Ignoring NCB
No-calm bonus can reduce your premium by 20-50%.
4.Future of vehicle insurance
Telematics Insurance: The premium will be fixed by analyzing the driving pattern through sensors and GPS.
5. Special policy for electric vehicles
Battery and charging infrastructure covering insurance products are coming.
6. AI and Automation
Artificial intelligence is making the claim process fast and transparent.
