- What is insurance?
- Why do I need an insurance?
- Common types of insurance
- How can I buy insurance?
- What is No Claims Bonus?
- Who issues an insurance certificate?
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What is insurance?
Insurance as per the Motor Vehicles Act is mandatory for every vehicle on wheels.
An insurance covers you for any damage or loss of your car. Primarily it is a promise of reimbursement in the case of loss; paid to people or companies so concerned about hazards that they have made prepayments to an insurance company policy: written contract or certificate of insurance; A contract in which one party agrees to pay for another party's financial loss resulting from a specified event (for example, a collision, theft, or storm damage).
Why do I need an Insurance?
In simple terms, you are legally required to have insurance for your vehicle. There are various types of insurance, some cover only the third party and some cover you, your car, the third party and the third parties car.
You have to read the terms and conditions of an insurance very carefully, very important cover rules such as, does not cover riots, damage due to war, natural disaster etc.
Common types of Insurance?
The common types of Insurance are
Third Party or Motor Policy A (ACT)
Comprehensive or Motor Policy B
Third Party or Motor Policy A (ACT) covers:
Liability for Death/Injuries of third parties with the Insurer treated as the First Party, The Insurance Company the second party and the others( pedestrians, occupants of other vehicles) as third parties
Liability for employees driving the vehicle- that gives you insurance against death/injuries (caused by your vehicle) of the vehicle’s employees (drivers, cleaners etc)
Liability of Passengers travelling in the vehicle- which means that you(being[the owner of a taxi /bus /auto riksha)insured against the death/injury (caused by your vehicle)of the passengers
Comprehensive or Motor Policy B:
Compensation for the expenses incurred to the vehicle due to the collision.
Damage to vehicle by accidental external means, fire, lightning, explosion, self-ignition, burglary housebreaking.
Riot & strike, malicious acts and terrorist acts
Earthquake
Flood, inundation, cyclone etc.
Landslide/ rockslide while in transit by rail, road, air, inland waterways, lift or elevator
P.S. Comprehensive policy can be restricted to loss or damage due to fire or theft or both fire & theft in combination with policy a or without
In case of third party insurance + fire or theft, the premium is only 25% of own damage premium + act premium
In case of third party & theft, the premium is 40% of own damage premium + act premium
These extended covers can be obtained without inclusion of "act" risks, provided the vehicle is not put to use.
The geographical limits for use of the vehicle is India but the limits can be extended to Nepal & Bhutan without extra premium and to Bangladesh by charging an extra premium of Rs.50/- for comprehensive policy and Rs.10/- for act policies
The insurance is payable every year and is valid until the midnight of same day next year. Policies can be issued for periods less than one year. In such cases, short period scales are charged, which are higher than pro-rata rates. Long-term policies can be issued for "act" only risks.
How can I buy an insurance?
You can buy an apply for an Insurance online with us. We work with almost all major insurance providers and we can find the best insurance for you. Click here to apply online for insurance with no hassle.
What is No claim bonus?
No claim discount: for every claim free year, the insured is rewarded with discounts in premium up to an extent of 65% (policy b only). In case of adverse claims, premiums are loaded with malus. For example the percentage of discounts would be something like
20% for the 1st year.
35% for the 2nd year.
50% for the 3rd year.
65% for the 4th year and afterwards
Who issues an Insurance certificate?
Insurance companies registered in India as Insurance providers can issue an insurance certificate.
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