Motor cover: Don't be penny wise, pound foolish

Motor insurance is essential for a vehicle to be on road. And it needs to renewed every year. While renewing the insurance cover, consider if you need any top-up. A large number of people leave it to their agent to renew the insurance of their vehicle. When it comes to filing for claim, they realise later that they have made an error.

Auto insurance is also covered annually like other general insurance policies. It has to be renewed after a stipulated period. If you are renewing your motor insurance, then definitely consider some basic things so that you can take it easy!

Understand IDV

If you are renewing a motor insurance policy, first of all, understand the concept of insured declared value or (IDV). This is the maximum value to be received in the event of theft or damage of the vehicle. So, IDV has an important contribution towards payment of claims. The premium amount of insurance is decided on the basis of IDV. That is why it is Important to understand IDV.

So, you should keep enough IDV in your insurance policy. In its absence, you may have to incur losses in the future.

No-Claim Bonus

In motor insurance policy, if we do not make any claim in the first year, then, the insurer gives a discount on the premium on  next year’s policy. In  insurance parlance, it is called No Claim Bonus (NCB). All general insurance companies offer up to 50 per cent discount in the form of NCB if no claim filed  for five consecutive years . The benefit of no claim bonus is available only on  premium of own damage policy. This discount is not available on third party premium.

Read Terms & Conditions

Before buying any insurance policy, understand the terms and conditions. Your  agent will give full information about the terms and conditions. If your existing policy does not meet your needs, then you can renew the policy by increasing the coverage. If the current company’s policy is not enough, then, you can port the policy to another company for better coverage, add-ons and service. Don’t worry you will not lose the NCB benefit.

Select Add-on
Just like health insurance, add-ons are also available on motor insurance policies. Risks that are not covered under general insurance policy can be covered through add-ons. But not all add-ons are useful. Motor insurance includes add-ons such as depreciation reimbursement, basic roadside assistance, engine guard, consumables cover, emergency medical expenses, enhanced personal accident cover, etc. You can choose add-ons according to your needs. These add-ons prove to be very useful.

List of network garages
All motor insurance companies have tie-ups with select garages located across the country. These garages are known as insurance company network garages. To simplify the claim settlement process, motor insurance companies provide cashless car insurance policies for repair works in these network garages.  The bill is settled in a cashless manner directly with the insurance company. When renewing insurance, choose a company whose network has more workshops in your city.

Insurance expert Vikas Singhal says that for motor insurance, it is necessary to get adequate on-damage cover along with third party Insurance. It is more important to renew this insurance every year before the scheduled time. If you do not renew it on time, then you will have to spend more money later. Otherwise, if you meet with an accident, then you will have to bear the compensation for this loss from your own pocket.