17 Features of Car Insurance

In this article I will talk about the 17 key features of car insurance. In an earlier post I had given a brief introduction to Car Insurance in India.

What is Car Insurance?

Car insurance provides protection and helps in coping with financial loss caused by theft, accidents or damage to a car. Car insurance helps to cover the cost of potential injuries or damages of your vehicle caused by theft, accident, fire, explosion, self ignition, lightning, riots, strikes or act of terrorism, natural calamities.

Car Insurance is mandatory in India as per law for anyone owning a car. Car Insurance has to be one of the first things you buy after your car. This protects one against third party liability. Car insurance is also known as motor insurance.Car Insurance in India is governed by the India Motor Tariff. Because of this the coverage for your vehicle is the same for any car insurance company. Car Insurance is mandatory and needs to be renewed every year.

Disclaimer: I am NOT affiliated to any Financial Services or Insurance company and I am not trying to sell any car insurance policy. I am providing this information on features of car insurance policies in India for educational purpose only – it will be learning for both me as well as readers. If you have any comments or observations please let me know. I am always eager to learn from my readers.

17 Typical Features of Car Insurance

  1. Most of the main companies have a convenient and user-friendly website for online buying/ renewal of car insurance, and generally they have quick and easy online purchase process.
  2. You can purchase online by using Internet Banking or your Credit Card.
  3. A copy of the policy is issued online immediately.
  4. You can easily customize your car insurance as per your needs. Most of the companies provide customized recommendations for motor add-ons depending on your vehicle age, make and model among several factors.
  5. Multiple payment options are available on car insurance policies.
  6. Almost all companies offer 24×7 service and claim support, even on holidays. I have heard (not verified) that some companies like Bajaj Allianz manage complaints through social media also.
  7. Companies have facility of providing SMS updates on your motor claim status.
  8. One can get additional road side cover, and get round the clock assistance in India.
  9. One can get towing assistance/facility if his vehicle breaks down or in case of an unfortunate accident. Facilities typically include:
    • on road repair relating to minor breakdowns
    • towing car to the nearest garage
    • changing of a flat tyre
    • replacing lost keys
    • arranging for emergency fuel
  10. Some car insurance companies offer discount based on age and profession.
    • A fully qualified and practicing Chartered Accountant
    • Serving in defense and paramilitary services
    • Qualified medical doctors who are registered with any Government recognized Medical Council
    • Employees of Central / State Government departments
  11. Some motor insurance companies offer Garage Cash cover where one gets a daily allowance when his car is in the garage
  12. Cashless servicing facility at network garages is offered by most vehicle insurers.
  13. Car insurance companies offer accidental cover facility for co-passengers
  14. Additional Discounts
    • Automobile Associations members can avail discounts.
    • You may get discounts if you have installed an anti-theft device in your car.
    • If you have covered the vehicle for specific location usage, you may avail additional discounts on your motor insurance.
    • If one has opted for Voluntary Deductible while buying a policy, he will be able to avail additional discounts on his policy.
  15. Hydro-static Lock Cover/ Engine Protector is specially beneficial in ares where it rains heavily and where flooding occurs as it covers damage to the engine on account of water entering it. Typically this covers expenses incurred while fixing indirect damage done by water ingression or leakage of lubricating oil leading to loss or damage to :
    • Engine Parts
    • Differential Parts
    • Gear Box Parts
  16. No Claim Bonus (NCB) is offered for every claim free year and this NCB slab increases for every claim free year. In some cases this bonus can be transferred over to your new car.
  17. Some companies provide additional personal accident covers with coverage for death, permanent total disablement , loss or physical separation of two limbs and loss of sight for both eyes or loss of one limb and sight of one eye and loss or physical separation of one limb or loss of sight of one eye.

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Conclusion

As per the Motor Vehicle Act, every motor vehicle plying on the road has to be insured, with a Liability Only policy at the very least. Private Car Insurance is the fastest growing sector in India as it is mandated by law for all the new cars. Car Insurance provides financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. In this post I have covered some of the typical features of car insurance in India like instant policy, helpline, accident help, add-ons, roadside assistance and many others.

References

I hope you found this article useful. I have provided this introductory article on car insurance for educational purpose only.

If you have any comments on features of car insurance, please feel free to contact me. Before making any investment decision, please contact your financial adviser.

Subhodeep Mukhopadhyay

I am a Management Consultant in the Education Sector. In my previous corporate career, I have worked in Banking, Private Equity and Software industry. I am an MBA in Finance/ Computer Engineer and enjoy doing equity research and financial analysis in my free time.

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