Motor Insurance covers medical and repair expenses for any third party affected in an accident, including your vehicle. Find out the companies offering motor insurance policy & its types at Moneycontrol.
Do you own a vehicle? It could be a two-wheeler or a four-wheeler. When you play your vehicle on the road, you run a risk of getting into an accident, irrespective of how well you drive or ride. An accident can be caused by pot-holes or collisions between vehicles. At the same time, your vehicle is also susceptible to theft or burglary. You can end up losing funds for repairs or even end up paying treatment.
It is therefore important that you are prepared for such an eventuality. Insuring your vehicle will provide you the safety net that you are looking for. Motor insurance is available for two-wheelers, four-wheelers and commercial vehicles.
There two types of motor policies that you can opt for—third-party insurance and comprehensive insurance. The third-party insurance only covers the expenses of damages caused o any third party during an accident. According to the Motor Vehicles Act, it is mandatory for all vehicles to have a third-party insurance.
Insurance agencies also offer comprehensive policies that cover a host of other things apart from third party liability. This includes damages to you vehicle and medical expenses of the person/ persons involved in the accident. Basically, in a comprehensive policy you get add-ons to the third-party policy where you can also protect your vehicle against theft and robbery.
To purchase an insurance, you have to pay a premium to the insurance agency annually till the term of the insurance. If you do not make any claims during the insurance term, the premiums that you pay will lapse. Motor insurance works on the policy of ‘use it or lose it’. This premium depends on the age of the vehicle, make and model and tenure of the policy.
You can opt for a cashless insurance policy where you need not pay a single penny for repairs of car or treatment of third-party or yourself. The insurance agency will settle dues directly with the garage or hospital. Otherwise, you can pay for all expenses and claim the same from the insurance agency.
If you do not make a single claim during the tenure of the insurance, you stand to get a No-claim bonus at the time of renewal of policy. This means, you will get discount on the premium during renewal.
Types of Motor Insurance
Motor insurances protect vehicles against damages and also protect persons against injuries sustained during an accident. Primarily motor insurances are of three categories:
This insurance is offered to all four-wheeler owners. The insurance protects the four-wheeler against damages suffered in an accident. It also protects injuries or damages to a third party in the accident. Personal accident cover for the driver is also covered. It pays for repairs of the car, medical expenses of the driver or any third party. It also protects your car against any natural disasters such as floods, earthquake and burglary.
As the name suggests, these are insurance policies for two-wheeler vehicles. It is available for both geared and non-geared vehicles. It protects the two-wheeler against expenses in case of an accident. Apart from paying for repairs of the two-wheeler, the policy may also cover medical expenses of the driver or any third party injured in the accident. If you choose a comprehensive plan you can protect your bike against any natural disasters such as floods, earthquake and burglary.
Commercial vehicle Insurance
All commercial vehicles such as autorickshaws, tempos, buses, trucks minivans or minibuses can also be insured under the motor insurance policies. Similar to the above policies, this insurance will protect your commercial vehicle against expenses in case of an accident including repairs and medical expenses for treatment of injured parties.
What is covered under Motor Insurance?
The motor insurance covers a host of things depending on the kind of policy you have opted for and the add-ons you have chosen. A motor insurance primarily covers medical and repair expenses for any third party affected in an accident involving your vehicle. This is mandatory as per law.
Now most insurance agencies offer a host of add-ons to this basic insurance and cover many other aspects. For example, you can claim damages to your vehicle in the accident. The insurance agency will pay for all the repairs. With yet another add-on you can protect your vehicle against theft and burglary. You can also add a personal accident cover to your policy where the agency will pay for any medical expenses for treating injuries suffered in the accident.
With a motor insurance in place, your vehicle will also be protected against damages sustained due to riots or strike, earthquakes, floods, storms, cyclones and landslide.
While it is important to know what is covered under your policy, it is also important to note things that are not covered by insurance policies. The insurer will not provide coverage to vehicle or third party if the accident occurred due to the driver’s negligence. This means if the accident occurs when the driver is under the influence of alcohol or drugs, the insurance agency will not pay for the damages.
At the same time, if the accident occurs when the driver is driving without a valid driving licence, the insurance agency will not provide protection. If your vehicle suffers damages outside the borders of India, the vehicle is no longer protected by the insurance agency.
Why should you buy a Motor Insurance?
You may argue that you are an excellent and careful driver and you don’t need to spend too much on premiums. You must, however, remember that accidents may occur despite taking all precautions. An accident can occur if your vehicle falls into a pothole. You may be affected when two other vehicle collide. You must take into account that as long as you are driving a vehicle on the road, you are under a risk of an accident.
It is, therefore, important that you gear up for any unfortunate situation. Being in an accident could mean huge expenses for damage repairs, medical expenses etc. If you have an insurance, you can avoid such expenses.
Moreover, if the safety and security of your vehicle was not reason enough, the Motor Vehicles Act makes it compulsory for all vehicles plying on roads to have a third party insurance. This insurance takes care of any expenses for treatment of any third party who suffered financially or medically from the accident.
There are many other benefits of motor insurance. You can ask for a towing facility to move your vehicle from the accident spot to a garage. You can also opt for cashless settlement in which the insurance agency settles bills directly with the garage and you need not pay anything. If you opt for depreciation cover, you will be able to get your vehicle covered without factoring in the depreciation. This means in case of an accident, the insurance agency will pay the entire cost.
How to buy Motor Insurance in India?
Like any other insurance, you must compare the insurance policies available in the market before you make the final purchase. Most insurance companies offer premium calculators on their website. Many aggregator websites also have premium calculators online. You can go to any of these websites and calculate the estimated premium.
The premium will depend on the make and model of your vehicle, the age of the vehicle and city in which it is registered, among other things. Before you begin, you must know exactly what you want from your insurance. You can pick and choose add-ons based on your requirement. The more the number of add-ons the higher the income.
Once you have decided on what you want, you can compare the premium of some of the best insurance policies. You can then make a decision based on your needs and your budget for premium.
You can purchase insurance online. This is the easiest and the quickest way to purchase an insurance. You can visit the website of the insurance agency and apply for a new motor insurance. You can fill in your details, attach documents such as registration certificate, driving licence, PAN Card etc. You can make the payment of your premium online using debit/ credit cards, netbanking or any other wallets. An acknowledgement will sent to your email ID.
Alternatively, you can walk into the office of an insurance agency or get in touch with an insurance agent to ask about the available insurance policies. You can also write to or call an insurance agency and enquire about a policy. An agent will get in touch with you soon.
Motor Insurance Companies
According to IRDAI, there are 34 insurance agencies that offer non-life insurance policies. These insurance agencies offer general insurance policies which include motor insurance.Here is a list of some of the top insurance agencies offering motor insurance:
- Acko General Insurance
- Bajaj Allianz General Insurance
- Bharti AXA General Insurance
- Edelweiss General Insurance
- Future Generali General Insurance
- HDFC Ergo General Insurance
- ICICI Lombard General Insurance
- Iffco Tokio General Insurance
- Kotak Mahindra General Insurance
- Reliance General Insurance
- Royal Sundaram General Insurance
- SBI General Insurance
- TATA AIG General Insurance
- Universal Sompo General Insurance
- National Insurance
- New India Assurance
- Oriental Insurance
- United India Insurance
- Aditya Birla Health Insurance
- Apollo Munich Health Insurance
- Max Bupa Health Insurance
- Religare Health Insurance
What is the tenure of a motor insurance policy?
A motor insurance policy is generally valid for one year. The policy is renewed on the due date at the end of the year. Premium has to be paid regularly to ensure the policy doesn’t lapse.
What is No Claim Bonus?
By the end of the tenure of the insurance, if the policyholder does not make any claims, the insurance agency gives them a benefit. This is called No claim Bonus. The No Claim Bonus is accrued over the years. According to IRDAI rules, the No Claim Bonus ranges from 20 per cent on the Own Damage premium (and not on Liability premium) and progressively increases to a maximum of 50 per cent. In case you decide to change your insurance policy from one company to another, the accrued bonus gets transferred to the new policy.However, a claim is made, the No Claim Bonus is lost in the subsequent policy period. The bonus is meant for the insured person and not the vehicle.
If I am selling my vehicle, can I transfer my insurance to the buyer?
Yes. The insurance policy can be transferred to the buyer of the vehicle. You will have to first inform the insurance agency of this purchase of the vehicle. You have give it in writing that you are selling your vehicle to the person concerned. The buyer can fill in a fresh proposal form. The insurance agency may charge a fee for transferring insurance along with pro-rata recovery of NCB from the date of transfer till policy expiry.
How does the insurance agency decide the premium?
There are several factors that determine the premium you will have to pay. To get a better picture, you must compare the premiums charged by different insurance agencies.Usually, the make and model of your vehicle, age of your vehicle, city I which the vehicle is registered and claims history of the applicant determine the premium. It is advisable to compare deductibles, coverage and Insured Declared Value (IDV) of the vehicle. The premium will also increase if you opt for more number of add-ons. Choose the add-ons based on your need and not on what you like.