Motor Insurance In India - Heaven On Four Wheels
Why Take A Car Insurance Policy? You must know that the Motor Vehicle Act 1988 states that automobile insurance is compulsory in India. A copy of this insurance needs to be maintained with you at all points of time in your car .Car dealerships maintain relationships with insurance companies giving you the necessary insurance quotes in order to avoid unnecessary hassles. What Is Third Party Liability? Let us consider that you are driving your car and it meets with an accident. You would have to pay claims and damages to the opposite party involved in the accident. These claims are settled by the insurance company on payment of the necessary premium. You would be able to pay for the claimant’s car repair charges, medical costs of the occupants of the car damaged and this would definitely help you to prevent financial loss. This premium does not cover damages suffered to your own car and hence the premiums are cheaper than a comprehensive insurance policy. What Is A Comprehensive Insurance Policy? You are covered under this policy for third party liability as well as own damage liability. Comprehensive insurance policy covers damages incurred by your car and injury suffered by the occupants in your car along with the damages and injury suffered by people in the other car. This policy also covers you against theft
and burglary of your car and on payment of an additional premium you can cover your music, stereo systems, air conditioners and so on. What Is Meant By Insured Declared Value You may be wondering what Is Insured Declared Value (IDV). This basically measures the sum reclaimed by you if your car should meet with an accident. If your newly bought car were to meet with an accident then the IDV value would be higher than an older car used for 3 years as the depreciation of the car is also taken into account. The IDV gives the current market value of the car and serves as a measure when claims are made on the value of the car. The registration cost and the insurance costs are excluded from the IDV value and only the accessories which are factory fitted are included and for coverage of new accessories add on premiums need to be paid. National Company in the used car market. The current ex showroom price of this car is INR 22 Lakhs. You have purchased a 2008 manufactured car which is more than 5 year old and has already run 50000 Kms. The car was purchased for INR 12 Lakhs. The accessories of the car include alloy wheels, power windows, and music system. This car had a comprehensive insurance policy which was transferred to you and lifetime tax has been paid for this car. What value Do You Think The Car Is Insured For? The Insured Declared Value is calculated based on the depreciation of 50% for 5 years and the value translates to INR 11 Lakhs which is half the price of the car .This means that the current market price of the car is 11 Lakhs. The motor insurance premium would be around INR 43000 inclusive of tax. [Source: http://indianmoney.com/blogs/car-insurance-in-india---heaven-on-fourwheels]