What should a customer do to keep his/ her premium low?

First is to drive carefully. The customer can also choose a car with a lower premium. Some car models and colours have a low insurance premium. The benefit of ‘no claim bonus’ given on the basis of number of accident-free years is quite high and goes up to 50 per cent.

What are the things to keep in mind while buying a motor insurance policy?

Mohit Bhatia

You get a discount on the car premium by getting an anti-theft device fixed in your car. One should also take into account the quality of after-sales services of the company such as having a 24-hour call centre, agent and price. To be able to get the company to react on time, find out about the number of cashless tie-ups a company has with the garages and the number of 24-hour call centres for registering claims. Also find out whether the process of paying claims is quality certified or not. Besides considering the price factor, remember that a company with higher paying ability has I AAA rating. I suggest that you not only take the price into account but also the facilities provided by the company. You can’t negotiate on the premium as the company has a fixed price for a car model depending on the location and the manufacturing year.

I want to buy a second hand car. Is the insurance premium different for an old car?

Manij Singh, Chandigarh

The same formula is applied for a second-hand car as is for a new car. However, if you are buying it first-hand, you get the ‘no claim bonus’ as there is a ‘no claim record’ and you start from zero. Apart from this, all the factors remain the same. For the old car, we charge depreciation value on the insurance cover of the old car. Depreciation value is fixed and is described in the tariff rates for the next five years. If the car is more than five years old, the company and the customer together decide its depreciation value.

When you take a comprehensive cover for a new car, all parts assembled at the factory are covered in it. But if you have added anything later such as a car stereo etc, you should declare it at the time of taking the policy and get these insured as well.

What will be the impact of model and location on the car premium?

Jagdish Kumar, Surat

 The cost of repair and spare parts are the main factors that decide the insurance premium of a model and it may vary in different locations. Service and cost of spare parts is generally higher for big cars and therefore their premiums are a little high.

Which one is better – cashless or reimbursement claim?

There are two ways to get motor insurance claim – cashless or reimbursement. A company may have a few garages to repair the cars insured by it. Companies and garages settle the bills amongst themselves, and the customer pays only for the spare parts which have not been insured.

In case of a cashless claim, the entire onus of repair is on the company. The surveyor takes the car, gets it repaired and returns it to the customer. While the company garage is more reliable than a normal garage, the paperwork here may delay repair. Surveyors also take time to inspect the car. Sometimes, company garages are expensive and burn a hole in your pocket if you were to make a payment.

In case of a reimbursement claim, the repair charges are reimbursed by the company. You can also get your car repaired immediately at a garage of your choice after taking stock of the damage. You can also get checked other parts which may not be affected during the accident. However, if the repair is not to your satisfaction, the onus is on you.

Once the repair is done, send the bills to the insurance company to claim them. Give original bills and payment receipts at the time of making a claim. There is a chance that a third party agent would make a huge bill of repair and pocket the rest after paying you your dues. So know all the aspects of your policy before taking the cover.