Understanding important features of your Car Insurance can facilitate its effective utilisation. Be Informed!

Date : 20/08/2023
Read: 3 mins

This monsoon, let us understand the key aspects of the Car Insurance Policy. Opting for appropriate coverage protects the vehicle and its policy owner adequately.

Important aspects of car insurance during monsoons

A car parked in the basement gets drowned in rainwater! If the car owner approaches the insurance company and the vehicle is towed to the service center, the owner stands to claim damages. However, if he tries to start the car first, and if the car gets locked, the insurance company won't reimburse for engine damages as there was some intentional action before filing a claim.

Understanding key aspects of car insurance like Insurance Declared Value (IDV), Zero Depreciation, Third Party Cover, Personal Accident Cover, Deductibles, and Engine Protect can come in handy when purchasing/renewing the insurance and filing any claim.

Highlights:

During monsoon, Indian roads are prone to distress like cracks, potholes, and depressions, resulting in a higher number of road accidents
Car insurance provides financial protection in the event of an accident, covering vehicle damages and the costs of medical treatment
It is important to understand aspects like insured declared value, deductibles, zero depreciation, third-party cover for effective utilisation of the insurance cover
Having valid car insurance is a legal requirement in most countries, including India

Key features of car insurance

Insured Declared Value - The maximum amount that an insurance company agrees to pay in the event of a total loss or theft of a vehicle covered under a car insurance policy. It represents the current market value of the vehicle after factoring in depreciation.

Deductibles - The deductible is the amount the insurance policy owner must pay out of his pocket before the insurance coverage kicks in. For example, if the insurance claim is Rs 1Lakh, and the deductible is Rs 10000, the policy owner pays the deductible, and the insuring company pays the balance of Rs 90000.

Third-Party Insurance Cover – If the first party (insurance policy holder) is at fault in an accident, third-party cover pays for the damages or injuries caused to the other party. It does not provide any protection for damages to the policyholder's vehicle or himself.

Zero Depreciation - With zero depreciation coverage, the insurer waives off the depreciation factor and receives the total claim amount for repairing and replacing damaged car parts.
Personal accident covers for owner – Car owners must have a personal accident cover of Rs 15 lakh and a fixed premium this at the cover at Rs 750 if they buy this as part of their car insurance policy. Larger cover can be availed by paying an additional premium.
Engine Protect - Engine protection covers the cost of replacing or repairing the car engine. This covers damage due to reasons other than accident-related damage.

Also Read: Buying Motor Insurance Policy? Do not miss these riders