10 Things You Didn’t know About Car Insurance

Car insurance is mandatory in India and that’s why most of the people don’t pay much attention towards the details of their car insurance. They keep themselves away from going through the policy documents and just renew the policy as per the due date. Such inactiveness toward the insurance policy keeps you away from availing the benefits and leaves many things uncovered.

A car insurance policy comes with numerous benefit and flexibility which can do wonders to your car insurance policy. But to take advantage of such benefits of your car insurance, you must be fully aware about them, otherwise you will be left with a plan which will prove to be useless when you will require it the most.

So in this article, we have outlined 10 things people didn’t know about their car insurance

1. Transfer of No Claim Bonus(NCB)

Most of the people are not aware about the transfer of NCB while changing the insurer. If you have any accumulated NCB with your current insurer, then while changing to a new insurer, you can transfer that accumulated NCB to the new insurer. The same thing can be done while changing the car also. Your accumulated NCB of your old car can easily be transferred to your new car.

2. Renewal of Expired Policy

You don’t need to worry if you miss to renew your policy on time as you get a window of 90 days from the date of expiry of your policy. In these 90 days, you can easily renew your expired car insurance policy without losing any benefit. Your accumulated NCB can also be carried forward after renewal.

3. Cover for Towing Charge

Driving on highways and remote areas involves the hassle of not being able to find a garage or mechanic in case of any mishap. And even if you find one, the mechanic charge high amount for towing your vehicle if you couldn’t drive it to the garage. Such charges can burn a deep hole in your pocket. But thanks to the car insurance policy which covers towing charges up to a limit. So understand the terms and condition of cover for towing charges in your policy and get benefited from it.

4. Multiple Drivers Affect Your Premium

Car insurance companies decide the premium amount according to the risk and multiple drivers for a single car increases the risk of accident and claim. That’s why car insurance companies charge high premium if multiple drivers are driving a single a car. So it is better to allow only one person to drive the car.

5. Cover for the Accessories Fitted in Car

Basic car insurance covers the damage for your car only, not for the accessories fitted in the car. But you get the option to cover your accessories fitted in the car by opting for a separate add on which is specially designed for accessories. Such additions to your policy increases the premium price, but it is still more cost effective than installing a new accessory after damage.

6. Zero Depreciation Cover

The sum assured received upon claim in car insurance is always deducted by the depreciation rate of the car. This depreciation rate is calculated by subtracting the rate at which the value of your car parts decreases (with the advancement in your car’s age) with the market cost of the new part. But you can avoid such deduction from your claim amount by opting for a zero depreciation cover which allows the policyholder to get the actual sum assured without any deduction due to depreciation.

7. Cover for the Engine

You can opt for an add on cover for your engine under your car insurance policy which takes care of the engine related repairs which are not caused due to accident. It keeps you away from expending a huge amount of money on engine repair. This cover is very much useful in case of damage to the engine due to flooding which can burn a deep hole in your pocket.

8. Cover for Personal usage and Business usage is Different

The cover for your car insurance depends upon the use of the car. If you are using your car for commercial purpose, then it is advisable to go for commercial vehicle insurance otherwise go for a comprehensive car insurance policy if you are using your car for personal purpose.

9. Comprehensive Car Insurance Policy doesn’t Cover Everything

Buying a comprehensive car insurance policy widens your area of coverage but it doesn’t mean that it covers everything. There are some exclusions and limitation of the comprehensive car insurance policy also which are clearly mentioned in the policy details. So it is very much necessary to go through the policy details before buying.

10. Key Replacement

If you have lost your ignition key, then you don’t need to worry as most of the car insurance companies reimburse the cost of a new key.

So go through the policy details of your car insurance policy so that you can avail maximum benefit from it. A car insurance policy has a lot to offer, it all depends on you, whether you want to access them by understanding your policy or miss them due to unawareness.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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