Getting a motor insurance? Here are riders you should know about

February 22, 2019 12:02 AM

Motor insurance policies can be distinguished on the idea of features such as liability coverage, collision coverage, medical payment coverage and personal injury coverage.

Opt for add-on covers in motor insurance (Illustration: Shyam Kumar Prasad)Opt for add-on covers in motor insurance (Illustration: Shyam Kumar Prasad)

By Mahesh Shetkar

Motor insurance policies are classified into two types: basic/ third-party car insurance policy and comprehensive policy. A third-party insurance policy solely covers damages to others in case the policy holder meets with a car accident. Comprehensive policies provide more protection to the policy holder as well as others involved in the accident.

Motor insurance policies can be distinguished on the idea of features such as liability coverage, collision coverage, medical payment coverage and personal injury coverage. Insured value, also known as insured declared value (IDV), is the total value insured which a customer can claim. An individual must select a car insurance policy that is appropriate as per one’s needs.

The insured value is the total sum that the insurer is liable to pay in case of eligible claims. For example, a car insurance policy may offer low premium but, at the same time, a low insured value. You should do a firm assessment of your automobile insurance. Look at various riders that are there in a motor insurance.

Add-on covers
Many insurance companies these days provide special facilities called add on covers. The most commonly recommended add-on is zero depreciation, which enables you to claim the full cost of replacing car parts damaged in accidents without having to pay from your pocket.

Next comes engine protect which is considered particularly relevant for owners of brand new high-end cars and is normally available for cars that are up to three years of age. Essentially, engine protect or machinery breakdown cover compensates for even those engine-related repairs that are not related to accidents.

It is useful and worth purchasing because the cost of repairs in case of damage to engine can be very high. Buying a return to invoice cover will ensure that in case of total loss or theft of your car, you will get the original invoice value, including registration charges and road tax paid, of the car and not just the insured declared value (IDV).

Deductible is the portion of damages payable by the car insurance policy holder. A higher deductible means the insurer will pay the remainder amount of damages in case of an accident. This also leads to a lower premium.

No claim bonus
No claim bonus (NCB) is the benefit that a car insurance policy holder gets, generally in the form of discount in the annual premium payable, for not filing any claims during a year. Before buying a automobile insurance policy, one must learn about the NCB in order to be able to make the best decision should the need for a claim arise in a year. For example, a damage that would cost less than the no claim bonus can be paid by the insurance policy holder out of his or her own pocket, therefore making most of this feature.

Many insurers provide car insurance policies through on-line as well as offline modes. Before buying or renewing an automobile insurance policy on-line, one must look at these aspects.

The writer is co-founder, DOERS

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