Automobile

10 things you didnt know about car insurance policy

10 unique car insurance facts to make the most of it

When you buy a car, you research about latest models, mileage, colours and numerous other features. But when it comes to the decision of buying the  car insurance policy, it is often just a hasty decision. More often than not, purchasing car insurance is a mere formality and vehicle owners often pick insurance either that is affordable or the one recommended by their car dealers without getting into much detail. 

This attitude of buying a car insurance policy without giving much thought, often lands you with insufficient coverage and you end up paying out of your pocket at the time of an incident. To make a wiser decision and get the most out of your car insurance, here are 10 facts that you may not know, but should!

 1. Towing fee is real:

If your car breaks down and you need it to be towed to take to the garage, your towing charges will be covered by the insurance company. The towing fee is eligible for reimbursement but there is often a capping on the amount. 

2. No claim bonus can be restored within three months only:

It is a well-known fact that no claim bonus can be transferred and utilised for new car insurance online or offline. But you may not know that it can be done only within 90 days of the date of the car insurance policy expiry. Most insurance providers have the option of renewing car insurance online. So, with an easy process, there is no reason to miss out on the discount of no claim bonus. 

3. Installation of added security features:

With rising cases of car theft in India, getting security features installed is a necessity. Purchasing a car with added security aids or investing in some will allow for a reduction in premium. Since the chances of car theft are reduced with these devices, insurance companies offer a discount on your car insurance online. 

4. Make and model of the car matter:

When determining the cost of your car insurance policy, the model and brand matter a lot in determining the premium amount. Since the repair of a high-end car is more expensive than a regular one, the insurance premium tends to go higher. Similarly, the year of manufacture also matters as it is the basic factor to determine the insured declared value of your car and the depreciation incurred over the years. 

5. Paying for minor claims helps:

While a car insurance policy is meant to cover damages made to your car, it leads to losing no claim bonus discount. So, in case of minor damages, it is better to pay out of your pocket instead of filing a claim and losing the discount at the time of renewal of car insurance online. 

6. Insurance premiums are impacted by your claim history too:

Filing for a lot of claims not only makes you lose no claim bonus discount but also deems you an unsafe driver. This may increase the premium amount of your car insurance policy as the company may consider you as a policyholder with high risk. 

Similarly, if you drive safely and do not raise any claims, your action is rewarded with a no-claim bonus. This discount increases with every year you do not file a claim, with the maximum amount as 50% of your premium. But remember, to avail of the discount, get your policy renewed on time. 

 7. A careless driving can lead to claim rejection:

  1. Your insurance provider expects you to take good care of your car and helps you bear the financial expense in case of damage. But, if the damage was caused due to your careless act in handling the car, you may not be able to get a claim. 

8. A modified car will attract higher insurance premium:

Getting your car modified does add more to the technological aspect or increase its aesthetic value, but what many people do not know is that it can also increase the premium amount of your car insurance policy.  Comprehensive car insurance only covers the accessories that are originally provided by the car manufacturer and not the ones you externally purchase. So, if you add a touchscreen infotainment added then it will not be covered under your policy unless you pay extra for that. 

9. Car insurance claims are not 100% cashless:

While a cashless claim is promised when you purchase car insurance online, it only means that you do not have to pay the whole amount of repairs in case of damages. But the cost of deductibles has to be paid out of your pocket. Deductibles are of two types – voluntary deductibles and compulsory deductibles. A small amount that you pay to get the car repaired is called a compulsory deductible. This is ideally charged to discourage people from filing for minor claims and encourage more safe driving practices. So, contrary to what many may believe, a cashless claim is not completely cashless. 

10.Your claim can be rejected if you get your car repaired before informing the insurance company:

When you purchase car insurance online, you are relieved that you will be financially covered in case your car is damaged. But to get your claim approved, you need to be transparent and honest with your insurance provider. Failing to inform the insurance provider on time can lead to a claim rejection. Hence, do not get the car repaired before informing the insurance company if you are planning to file for a reimbursement

A car insurance policy offers financial coverage and a sense of security in case of an unfortunate event. Whether it is covering for your damages or a third party, it is important that you know how insurance works and make the most of your car insurance policy. 

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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