MOTOR INSURANCE

Car Insurance is a type of Motor Insurance Policy which reimburses the Insured Owner of the Vehicle in case of Damage caused to the Vehicle.

The Insurance Policy also provides Indemnity against the Legal Liability due to Damage caused by the Insured Owner’s Vehicle resulting in Third Party Property Damage or Third Party Bodily Injury.

There are Two Types of Car Insurance Coverages in India:

1. Own Damage Cover
2. Third Party Liability Cover

Own Damage in Car Insurance specifically covers for the Damage caused to the Vehicle. The Damage may be on account of Accidents with Other Vehicles, Fire, Explosion, Earthquake, Storm, Floods, Thefts etc.

The Own Damage Cover compensates the Insured Owner to replace or repair the Damaged Car Parts.

Own Damage in Car Insurance specifically covers for the Damage caused to the Vehicle. The Damage may be on account of Accidents with Other Vehicles, Fire, Explosion, Earthquake, Storm, Floods, Thefts etc.

The Own Damage Cover compensates the Insured Owner to replace or repair the Damaged Car Parts.

Third Party Liability Cover in Motor Insurance compensates the Insured Person against Legal Liability that the Insured is liable to pay on account of Third Party Bodily Injury or Damage to Third Party Property.

Third Party Liability Coverage is mandated by Law in India, that is, every Vehicle Owner in India needs to have Third Party Liability Coverage.

The various Add-On Covers in a Car Insurance Policy are as follows:

1. Zero Depreciation Cover
2. Engine Protect Cover
3. Return to Invoice Cover
4. Road Side Assistance Cover
5. NCB Protect Cover
6. Key Replacement Cover
7. Consumables Cover
8. Tyre Protect Cover

Zero Depreciation Add-On Cover reimburses the Insured Vehicle Owner, the amount of Depreciation which has been deducted on the value of parts which have been replaced as part of an Own Damage Claim.

So, in case of a Claim under a Car Insurance Policy, a Standard Policy reimburses the Depreciated Value of the Car Parts that are Repaired or Replaced. This amount can be considerably less than what it costs to replace the Damaged Car Part with a New Car Part.

If the Insured opts for a Zero Depreciation Cover as an Add-On Cover to a Standard Motor Insurance Policy, the Policy would reimburse the amount it costs to replace the Damaged Part with a New Part. Hence, it always makes sense to have a Zero Depreciation Cover for the Vehicle.

You can opt for a Higher Zero Depreciation of 7 years by Insuring your Vehicle with Qian.

Engine Protect Add-On Cover reimburses the Insured Vehicle Owner if the Engine or it's parts get damaged on account of Water Ingression or Leakage of Oil.

A Comprehensive Car Insurance Policy does not cover Damage to the Engine or Engine Parts like Pistons, Cylinder, Gearbox on account of Water Ingression or Leakage of Lubricating Oil.

This Add-On Cover is very important as a lot of Engines get damaged during heavy rain due to Water Ingression. Most Engine Damage cases require around Rs50,000 to Rs1 lakh to repair. This Expense is not reimbursed by a Standard Car Insurance Policy.

If you opt for an Engine Protect Add-On Cover for your Motor Insurance Policy, the cost to repair the Engine would be reimbursed by the Policy, thus saving substantial money on repairs.

Return to Invoice Add-On Cover covers the difference between the Insured Declared Value (IDV) of the Vehicle and the Invoice Value of the Car.

Over the years, the Vehicle depreciates in value and is worth lesser than what you bought it for.

For Eg: If you purchased a vehicle for Rs10 lakhs, it might be worth Rs6 lakhs at the end of 4 years. Now, if your vehicle is stolen at the end of 4 years, a Normal Car Insurance Policy will reimburse you only the Depreciated Value of the Car, that is, Rs6 lakhs.

If you opt for a Return to Invoice Add-On Cover, the Insurance Policy will reimburse the Full Invoice Value of the Vehicle, that is, Rs10 lakhs in such a case.

As a result, this Add-On Cover enables the Insured Owner to purchase the same vehicle in case of a Total Loss.

Imagine that you have gone for a long drive in your car and your vehicle suddenly breaks down in a deserted part of the road. There are no mechanics available nearby. Such a situation would be scary and unsafe for most.

Car Insurance Policies offer Emergency Road Side Assistance as an Add-On Cover where the Insurance Companies provide assistance in case the car breaks down due to any reason.

Road Side Assistance provides cover for Breakdown of a Vehicle due to reasons such as Battery Breakdown, Tyre Puncture or if the vehicle runs out of fuel midway in the journey.

One thing that needs to be kept in mind is that the Insurance Company facilitates the assistance, however, the Expenses for Replacing the Battery or Refueling the Vehicle needs to be borne by the Car Owner himself.

Road Side Assistance in Motor Insurance is an excellent option to secure yourself if your vehicle gets stranded midway in the journey.

Insurance Companies provide No Claim Bonus (NCB) Discounts on the Own Damage Premium for every year in which you do not make a Claim under the Insurance Policy. These Discounts start at 15% for the first year and go upto 50% for 5 Consecutive Claim-Free years. These NCB Discounts result in substantial saving of Premium.

Now, if you opt for a NCB Protect Add-On Cover in your Car Insurance Policy and you make a Claim under the Policy, the NCB Protect Cover will still protect your NCB Discount even though you make a Claim.

In earlier times, losing your Car Keys was not a big deal as you could get a duplicate one made from a Local Locksmith for a small amount.

However, today the Car Keys are encrypted and you cannot get one made from a Local Locksmith. So if you want to get Duplicate Keys made for your Vehicle, you need to approach the Company. This is an expensive affair. Getting a duplicate pair of Car Keys made can cost in excess of Rs10,000. Also, a Standard Car Insurance Policy does not reimburse the cost of lost Car Keys.

If you opt for a Key Replacement Add-On Cover in your Car Insurance Policy, the cost of lost Car Keys would be reimbursed by the Insurance Company. Additionally, the Key Replacement Cover will also reimburse the cost of changing the lock if needed.

Consumables in a Vehicle comprise of small items like Nuts, Bolts, Engine Oil, Fuel etc.

These items cannot be reused when your vehicle has gone for repairs. A Normal Motor Insurance Policy will not compensate for such Consumables. As a result, you have to bear such expenses out of your own pocket.

However, if you opt for Consumables Cover, this Cover will reimburse you for the Cost of Consumables that were replaced in your vehicle. You can opt for this Add-On Cover by paying a nominal additional premium.

These days, Car Tyres are really expensive and may put a dent in your pocket in case you need to replace them. A Tyre Protect Add-On Cover provides reimbursement in case you need to replace your Damaged Car Tyres with New Tyres. It also covers Labour Charges which are incurred in Replacing and Refitting the Tyres.

Exclusions under Tyre Protect Cover:

• Tyre Protect Cover in Car Insurance will not cover the cost of Tyre Puncture and Tyre Repair.
• Damage caused to the Tyres on account of participating in Races or Rallies.
• Damaged caused to Tyres in case of Service by Unauthorised Service Centres.