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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

Thanks a lot for all the valuable inputs you have been providing me.
I have been glued to all your comments and titibits since the last couple of months when i decided to go in for a new car. :thumbs up and you have been instrumental in me looking for an insurance provider other than icici or reliance too.lol:
Thanks a ton and keep up the spirits

Excellent and Valuable information in one page.I infact compiled and kept information scattered on a diffrent thread by Rupesh as a guide before going for the next renewal

Thanks Guys.

Very comprehensive and well compiled,

Spike

P.S. Does FIR mean "Final Investigation Report" as mentioned by you or First Information Report?stupid:

Excellent! Its like reading the terms and conditions of your insurance policy in simple understandable language.

Thank you every one for your kind comments.

@alstonvaz - That's the perpose. "To makes things simple for them who can not understand the complicated"

@SPIKE ARRESTOR - FIR means both "First Investigation Report" as well as "Final Investigation Report". It is important where you are using this term?, how you are using this term?

Rupesh: First, very comprehensive article. Many thanks. I would like to add one point here. If i understood it correctly, you mentioned in Q16 answer that currently there are no companies offering coverage for medical bills during accident.

Bharti AXA General Insurance has recently introduced the same. As a additional product where it covers;

1. Hospital Cash Cover - Rs.1000 for 30 days
2. Ambulance Charges cover - Rs.5000
3. Medical Expenses reimbursement cover - Rs.10,000/ person

I can share more details, as i work for the company. I can mail brochure if required.

Mods: I work in corporate marketing team of Bharti AXA General Insurance. I have no direct benefit in this. I am just sharing information.

Very much handy, I was looking for the NCB % year wise Thanks Rupesh

@Rupesh,

Thanks a lot for the info mate. It was indeed useful. I have few queries in mind if anybody can clarify please:

1 If my car is down or met an accident outside city & i have to tow it back to garage, will i get towing charges also from Insurance company?
2 Will i get back 100 % for my glass parts (front or rear glass, windows, indicators, front lamps etc) and rubber parts ?
3 How many days it should ideally take once you submit bills to the insurance company? for Cashless, what i have to do?
4 How much money i will get back in case of denting & painting work? 100% ?
5 Last but not least, which is the best Insurance company with less hassles & pain? I have to renew my insurance for my Dezire very soon. How can i negotiate with them for best deal?

Hello Rupesh and Imran,

Is this a new development?
I remember we got our 8 year NCB transferred to the new NHC we bought in 2006. We had to get some sort of affidavit from the insurer that NCB was discontinued on the old car, and was transferred to new car. We kept the old car and got it insured without any NCB that year. And the new car got 50% NCB.

This is an excellent one-stop resource for all insurance-related queries. Thanks a lot to everyone who's put in their efforts to create (and maintain) this!

I have one question on the quoted (below) point -

Across all of my identity cards my name is listed in full as <Firstname> <Lastname>. However for some reason the RTO has recorded my name on the vehicle's RC as <Firstinitial> <Lastname>.

Is this OK for insurance claim purposes? Will they disallow any claims saying that the name (on the insurance certificate/RC) doesn't match with, say, the name on the DL? Should I proactively approach RTO to reissue the RC with the properly expanded name?

Thanks a lot in advance!

Regards,
spadix

Hi Rupeesh,

I have my insurance for renewal for this feb end. I did claim any insurance in the first year. How do i claim NCB and how much i can claim NCB. I have insured with kotak. Do you suggest me to change to any other insurer. Please advice.

Thanks in advance.

Hi,
I have an old Alto with 45% NCB where I pay a paltry 2xxx for comprehensive insurance. I am planning to buy a new Safari now but want to retain the Alto for few more months?

Is it possible to use the NCB for the New vehicle and get substantial savings on the insurance? I know its technically not possible. But, I am ready to buy a new insurance for the Old Alto. It might cost around 4k for a new insurance on Alto. But transfering NCB to Safari would save atleast Rs. 10000 every year.

Thanks,
JP

Did the same thing our old M800 was insured with new india assurance and the new NHC was insured with Bajaj Allianz. The Bajaj allianz person from honda dealership suggested the idea and got the formalities done. Ask the Insurance guy at your TATA dealership.

My car met with an accident. Bus braked hard, WagonR behind it did the same, my car hit the WagonR from behind. Car has been given for repairs under insurance. Person driving WagonR says he does not want to disturb his NCB and wants us to compensate him. FIR was not filed. This happened 5 days back.

My questiona:

1. Can FIR be filed now?
2. Lets assume for a moment that he finally claims from his own insurance. The balance amount that his insurance does not pay him can be recovered from my insurance through third party claim. What is my involvement in this process?

Any help will be highly appreciated.
Thanks