As the monsoon season is coming, rather than doing your own prediction on whether or not the IMD will get its prediction right on rains across the country, invest in motor insurance and secure your vehicle.
As the monsoon season is coming, rather than doing your own prediction on whether or not the IMD will get its prediction right on rains across the country, invest in motor insurance and secure your vehicle. Natural disasters, especially cyclone storms and flash floods, are quite common in India and the damages caused by them to life and property run into several thousand crores. The most recent example being the Cyclone Fani which reported a tentative loss of Rs 12,000 crore to the property and approximately 64 people were killed. While those who have insured their vehicles were saved, others faced irreparable loss.
A motor insurance policy has two basic components, namely – Own Damage (OD) cover and Third-party Liability (TP) cover. While the TP cover is compulsory under the Motor Vehicles Act, 1988, OD cover remains optional. As per the insurer terms and conditions, damages caused due to a natural catastrophe, such as a cyclone and floods, fall under the OD cover.
Since September 1, 2018, IRDAI made it mandatory for all new vehicles to have a long-term third-party cover for three years at one go. However, the own damage cover can be renewed every year. During the monsoon season, various car insurers reject claims related to repair or replacement of the engine as in most of the cases, it is a ‘consequential loss’, meaning the vehicle owner tried to move the vehicle through a water-logged area. As per the policy wordings, most of the consequential losses are not covered under the regular motor insurance policies. All such incidents are a result of a certain action of the policyholder and not an outcome of a catastrophic event. Though the case is entirely different in case of cyclones, wherein there is no such distinction.
For instance, say in case your car is damaged because of a tree collapsing on it due to high winds, the damage will be covered under your motor insurance policy. However, damages caused to accessories such as the music player, parking camera and the sun-roof are not covered under the motor insurance policy — though you may choose to cover the accessories as well under your insurance cover by paying an additional premium.
To avoid any disappointment while making a claim, you can invest in add-on covers along with your regular policy to make it more comprehensive and ensure that your vehicle is adequately covered. You can also consider taking a ‘zero depreciation’ cover which provides bumper to bumper protection to your vehicle. Another important add-on worth considering this monsoon season is ‘return to invoice’ cover. Under this feature, in case the vehicle is completely damaged or is damaged beyond repair, the policyholder is paid the actual cost of buying a new car of a similar make and model. Though the premium is slightly high for both these add-ons, i.e. approximately 10-20 per cent, you will be paid full price for the claims.
Here are a few tips that can help you sail smoothly through the monsoon season:
Insure Your Vehicle
As it is mandatory to insure your vehicle, make sure your paper work is in the right place. Update your insurance policy and make sure the policy is broad enough to cover any damages that you may incur due to the monsoon season.
Before you set out for the monsoon, it is best to get your car thoroughly checked up. Get professionals to check your battery, brake pads, air filters and remove carbon from the spark plugs. It is also important to check for fuses, lights or wires, and make sure there are no loose connection to the headlights or wipers.
Ensure Monsoon Car Accessories
Mud Flaps and Rubber Mats are a must as you don’t want to be driving behind a car that is lashing out mud at you. It is always good to have your mud flaps for all four tires in place for the convenience of others. Also, make sure you have checked for the rubber mats, else the water getting onto your car carpet will leave it smelling damp.
(By Tarun Mathur, Chief Business Officer-General Insurance, Policybazaar.com)