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Motor Insurance

What Is Motor Insurance?

Motor insurance for cars, two-wheelers, trucks, and other vehicles. The main purpose is to provide financial protection from injuries due to road accidents and to provide for legal expenses incurred in such cases. As per the Motor Vehicles Act, 1988, all vehicles on Indian roads must be insured. Based on the end-use, Motor Insurance can be of the following types:

 

Types of Motor Insurance

Based on the type of coverage provided in the policy, Motor Insurance can be of the following types:

  1. Nil Depreciation Cover: A vehicle's value depreciates as it ages. Thus, when a policyholder files a claim, it is processed after subtracting the applicable depreciation, and if the policyholder opts for the nil depreciation cover, it leaves out the depreciation factor from the coverage. You will then get complete coverage.
  2. Engine Protection Cover: When the engine is damaged, its repair/replacement expenses will be borne by the insurance provider.
  3. Return to Invoice Cover: If total damage occurs, the cover qualifies the policyholder to obtain the original on-road cost of the insured car.
  4. NCB Protect Cover: In a policy year, if the policyholder files a claim, he/she isn’t entitled to get. Thus, opting for this cover enables the policyholder to be eligible for No Claim Bonus even if they have filed a claim.
  5. Consumables Cover: A few components/consumable parts/substances like nuts, bolts, ball-bearings, engine oil, AC gas, coolant, and grease are not covered under the car insurance. Hence, with this add-on, the insurance coverage is extended to such consumables.

 

Inclusions of Comprehensive Car Insurance 

Comprehensive car insurance offers the following coverage:

 

Exclusions of Comprehensive Car Insurance Coverage

Comprehensive motor vehicle insurance excludes the following coverage:

 

Factors that Affect Motor Insurance Policy Premium

Various factors affect the motor insurance policy premium. Here are some of them:

 

How to Reduce Premium for Motor Insurance Policy?

Various insurance buyers/ renewers will definitely wish to know how to reduce the premium for their motor insurance.

Well here is the catch- If you opt for less insurance premium, you'll get less insurance coverage. The insurance experts advise not to compromise on the coverage because if you do so, although you'll save some pennies on the insurance premium, but when you do a claim, you may end up spending more from your own pockets. This will nullify the whole essence of having motor insurance.

Fintra suggests a few ways to reduce the premiums for motor insurance without having to compromise on the insurance coverage:

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