AUTOMOBILE INSURANCE: FREQUENTLY ASKED QUESTIONS
Dear Team BHPians,
These are some of the FAQ which have been created by (me) Mr. Rupesh Vora - rjvora_2000 and Mr. Imran Jeddy - bblost.
Thank you for your support the entire T-Bhp Moderator team.
Q. What are the quick points that I need to check in my Vehicle Insurance Policy?
A. All the information must match with your details in RC book including CC, make model, sub type, fuel type, seating capacity (very important) etc.
Q. What are the points that I need to check in the renewal notice?
A. IDV is reduced by a minimum of 10% from last year,
Vehicle Registration No. is correct;
Premium is less than the last year (If you have not made any claim.)
NCB (If applicable) is more than last year’s NCB. (Maximum 50%)
Sometimes the Third Party insurance premium may get revised. This is very rare and it may cause the premium to go up.
Q: What are the factors that one should consider before selecting an insurance company?
A: Ideally the company that has a cashless tie-up with the widest network of service stations that you may visit in case of an accident. Secondly, the company which offers you the best rate without any excess on it. Above all, choose a company that has a good and fastest claim settling ratio and record.
Q. Why two insurance company’s premiums are not same?
A. All the companies offer 1. Different discounts, 2. Different P.A. cover and 3. Different IDV. It is the reason of difference in premium amounts for all the insurance companies.
1. Different discount: - This mainly depends upon the claims experience of a particular company. If claims experience is good then they will offer higher discount and if claims experience is bad then less discounts are offered.
2. PA (Personal Accident): - PA cover premium will not differ from company to company but it is an optional cover you need to choose the amount how much you want to cover. Eg. One company will offer Rs. 100 as a premium and other company will offer Rs. 250 as a premium.
3. IDV: - Major factor influencing will be IDV. But be very careful, many companies reduce IDV a lot, reduced IDV means your premium will be reduced. Most important point here is at the time of claim insurance company will also have to pay less for your vehicle. (It should be reduced every year by 10% minimum to 20% maximum.)
Always keep your IDV on higher side, it helps
1) During claims.
2) At the time of selling car.
Q. What is NCB and how is it calculated?
A: If you don’t make any insurance claim on your vehicle then you are eligible for a No Claim Bonus (NCB). This is a discount on your premium for the coming year and is calculates as under: -
1st year – 0% in Own Damage premium amount
2nd year – 20% in Own Damage premium amount
3rd year – 25% in Own Damage premium amount
4th year – 35% in Own Damage premium amount
5th year – 45% in Own Damage premium amount
6th year – 50% in Own Damage premium amount
Q. How is depreciation on the metal parts calculated?
A. Depreciation on metal parts is calculated as under: -
0 to 6th months – 0%
7th month to 1st year – 5%
1st year to 2nd year – 10%
2nd year to 3rd year – 15%
3rd year to 4th year – 25%
4th year to 5th year – 35%
5th year to 10th year – 40%
More than 10 year – 50%
Q. What is Excess? Is Excess good or bad?
A. Excess means the amount that will be deducted by the insurance company before making the payment to insured. There are two types of excesses. First one is compulsory which depends upon the C.C. (cubic capacity) of the vehicle and which cannot be removed from insurance policy. The second is a voluntary excess, which is given to you for reducing the premium in the policy. This is not a recommended option to avail, since it reduces the insurance claim payout if its needed. Never agree for higher excess.
Q. What is covered under own car damage?
A. Vehicle replacement cost or Vehicle repairing cost is paid if you have opted for this cover in your policy.
Q. When should a vehicle be scrapped (Under total loss)?
A. In case of an accident where the repair cost is more than 75% of car value (IDV), then insurance company will scrap the vehicle and pay the insurer the entire value of the vehicle.
Q. When do insurance companies not pay the full IDV?
A. If you have not reduced the car value every year minimum by 10% from last year’s IDV, then your insurance company will not pay the IDV. If you have increased the car value without any valid reason than also insurance company will not pay the entire IDV.
Q. What is covered under third party insurance?
A. In case of an accident, third party property damage and third party life damage is compensated.
Q. If third party vehicle is smashed beyond repair what is my liability?
A. Nothing. If you have valid insurance documents then entire loss is paid by insurance company and you don’t have to spend a single penny from your pocket.
Q. Is the dispute between the insurance company and others, Am I a party to the dispute?
A. No. once you handover the court case and papers to insurance company then they take over the case. You may however need to go once to court.
Q. If the fault is completely mine and I also agree to same, does my liability change?
A. No, not at all. The premium you pay covers for potential mistakes on your side.
Q. Is the dispute between the insurance company and others, Am I a party to the dispute?
A. No. once you handover the court case and papers to insurance company then they take over the case and you don’t have to visit court or to do anything.
Q. In case of physical injury or death of passengers in my vehicle, are the medical expenses covered? Is there a special type of insurance cover?
A. Under third party cover there is a clause called Unnamed Passenger PA (personal accident) cover. If you have opted for this cover (which is available on extra premium of maximum Rs. 100/- per person for a coverage of Rs. 2,00,000/-) then there is compensation payable to the family members in case of death. There is no cost of medical bills or any expenses payable to the injured passengers. Currently there are no options (products) for getting this covered through vehicle insurance.
Q. Are third party medical expenses covered? Is there a special type of insurance cover?
A. Yes. The entire expenses are paid under TP(Third Party) policy, if there is a police case, you don’t have to opt for any special policy. Unlimited medical expenses are paid under TP policy.
Q. In case of theft, how much will the insurance companies pay?
A. Entire IDV minus excess is paid.
Q. What is the reason for not paying the entire IDV under insurance policy, if vehicle is stolen?
A. If you have not reduced the car value every year minimum by 10% from last year’s IDV, then your insurance company will not pay the IDV. If you have increased the car value without any valid reason, then also insurance company will not pay the entire IDV.
Q. Do I lose my NCB in case of theft of my car?
A. Yes. If there is a theft and you make a claim, you lose the NCB.
Q. How much time does it take to settle my claim, under theft insurance?
A. There are lots of documents which have to be submitted in case of theft insurance. (Approximately number = 18). Post submission of all those documents, you will be required to submit a "Final Investigation Report (FIR)". This is usually issued by/from police station after approx 3 months of the theft. The claim is paid one month after the submission of the FIR.
Q. My Insurance has expired yesterday is there a grace period after last date for renewal without inspection/penalty
A. There is no grace period in comprehensive insurance. The NCB savings will elapse after 3 months.
Q. Can I renew my insurance without an inspection?
A. For third party it does not matter. But it’s mandatory for comprehensive insurance.
Q. Can NCB be transferred if I change my insurance company?
A. Yes. Your car carries the NCB; every company has to accept it.
Q. What is the procedure to transfer my existing NCB to new car insurance?
A. When you sell your car, you have to submit Form 29 & 30 to insurance company, which has information about buyer and seller including their signatures. This verifies that you have sold your car. Company then issues a No Claim Bonus Certificate which can be used on your new car.
Q. Can this be still done if I wish to retain my old car?
A. NO
Q. Is an FIR required when I make a claim for a repair? (Given there are not legal issue with the damage)
A. It depends on a case to case basis. If a tree fell on the car and destroyed it, you can get full IDV back without an FIR.
Please post your questions in https://www.team-bhp.com/forum/india...ce-ask-me.html
18th July 2008, 22:26
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