Buying a car or a bike is the beginning of a new journey. However, before you bring your dream vehicle home, you must be prepared for fulfilling certain responsibilities that come along with it. You have to take care of various ongoing costs like fuel and maintenance of your vehicle. Amidst all these responsibilities, you must not forget to insure your vehicle. As per the mandate under the New Motor Vehicle Act of 2019, every motor vehicle in India (including a private car) should have an insurance policy to cover any damage caused to the life/property of others.
Third Party Liability vs. Comprehensive Cover
On the basis of purview of insurance policies, there are broadly two types of policies in the vehicle insurance space. You can opt for either a third party cover or a comprehensive insurance plan. In the former, you are protected from the costs arising out of any injury to the third party (person or property) due to an accident occurring because of your vehicle, whether driven by you or someone else. Of course, there are certain conditions to that. On the other hand, a comprehensive cover protects not only the third party but also you and your property when faced with any untoward incident.
Factors that affect motor insurance premium:
- Insured Declared Value (IDV): is the current market value of the vehicle.
- Age: the age of your vehicle determines the premium amount you have to pay. An older car will have more premium as compared to a new car.
- Claim History: Making too many claims can result in increase in premium amount whereas a discount is offered in case no claim has been made in a particular policy year. The same can be availed in the subsequent year
Whether you have a third party cover or a comprehensive motor insurance plan, it is important to understand the terms and conditions of your policy. In a comprehensive insurance plan, both you and your vehicle are covered against damage as a result of a collision. Also, if you are involved in an accident with another person, and they get injured, your comprehensive car insurance plan covers any damage that may have been caused to them or their property.
There are inbuilt advantages when you opt for and pay diligently the premia for a car insurance policy. One of the recurrent benefits of procuring a policy and keeping it functional is that, if there are no claims made in a policy year, then, you can get some brownie points in the form of ‘no claim bonus’ that you can avail in the subsequent year.
In view of all of the above points, it is evident that not only is it a good practice to insure your car but also to keep the policy functional as well as claim free for as long as possible. So, get yourself a good car insurance policy if you haven’t already!
“Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!”