A car insurance policy is a protection shield for your car against any damages caused by natural calamities such as floods, earthquakes, cyclones, accidents, and thefts. There are three types of car insurance policies:
1. Third-Party Car Insurance
Third-party car insurance provides coverage for third-party financial liabilities such as car damage, physical injury, death, disability as well as property damage. The coverage offered in case of death is unlimited, while for peroperty damage, the coverage is limited to upto Rs. 7.5 lakh.
2. Comprehensive Car Insurance
A comprehensive insurance policy provides coverage for third party liability as well as damages caused to your own car. In comparison with third party liability insurance, a comprehensive car insurance policy offers extensive coverage, more benefits & covers the damages caused to the insured car in case of an accident, collision, theft, etc.
3. Own Damage
Own damage policy provides coverage to the policyholder in case their car sustains any kind of damage. The third-party insurance does not cover your own damage so you have to purchase it separately.
How to Calculate Car Insurance Premium?
Car insurance price is decided based on several factors. It is also easy to find out the four wheeler insurance premium using an online car insurance calculator. However, the insurance provider takes into consideration the following parameters before fixing the car insurance price:
- IDV (Insured Declared Value) of the vehicle
- Age and Type of Car
- Engine’s Cubic Capacity
- Geographical zone
Car Calculation Formula:
IDV = Car’s Showroom price + Accessories cost – depreciation value
Thus, the formula to calculate OD premium amount is:
Own Damage premium calculation formula:
Insured Declared Value X [Car Premium as per the insurer)] + [ Optional Benefits] – [NCB/Discount etc.]
How To Compare Car Insurance Online?
Car insurance comparison is essential for choosing the best policy for your car. Compare car insurance online from top four-wheeler insurance companies before renewing. It takes a few minutes to buy or renew car insurance online. You have to enter the vehicle details, contact information, and insured details and choose the covers as per your need.
New Car Make, Model and Variant
This information is critical to calculating the base premium. A luxurious, powerful and expensive car will attract more premiums. For e.g., an SUV car will always have a higher premium than a family car.
Buying a car insurance policy is mandatory in India for all cars as per the Motor Vehicles Act, 1988. Car insurance companies compensate for the loss or damage caused to the insured car and a third party from the insured four-wheeler. It can help
Year of Manufacture
The manufacture year of your car lets the insurance company assess its Insured Declared Value (IDV) that facilitates the underwriter to decide the annual premium for your car.
CNG(Compressed Natural Gas) Fitted Car
Being more vulnerable to combustion, a CNG fitted car is usually insured at a slightly higher premium than a plain petrol/diesel car.
All Additional Covers
You need to mention whether you do or do not want to get a cover on electrical and non-electrical accessories fitted in your car. Most insurers provide a cover for your car accessories at an additional premium of 4% on its value.
Add-On Covers in Car Insurance Policy
The add-on covers need to be purchased on payment of an extra premium amount. Following are some of the add-on covers – No Claim Bonus Protection cover, Zero Depreciation cover, Engine Protection cover, Key protection cover, etc.
- No Claim Bonus Protection Cover
- For every claim-free year, the insured is rewarded with a discount on the renewal premium. This discount is called – No Claim Bonus (NCB). It is cumulative and increases every year. It usually ranges from 10% to 50% and can save a substantial amount of money on the premium payable for your auto insurance.
- Engine Protection Cover
- An engine is one of the most important parts of a car. And engine protection cover compensates the cost of fixing the indirect damages that are caused to the engine due to lubricating oil leakage and water ingression. It covers the Gear Box Parts, Engine Parts, and Differential Parts.
- Zero Depreciation Cover
- This additional feature offers compensation even for the depreciating value of your car. With this feature, you will not have to pay for the depreciation value of your vehicle’s parts. It is mostly valid on private cars and is subjected to a specific number of claims during the policy period. Compulsory and voluntary deductibles (as per the case) will be applicable despite zero depreciation cover. You can check with the insurance company for any terms and conditions before making the purchase.
- Consumables Cover
- Sometimes, a bunch of unforeseen expenses can drain all your savings. Consumables Cover. Includes all the expenses incurred on consumable items for any perils that are covered under the policy. Consumable items include screws, nuts and bolts, washers, AC gas, grease, lubricants, bearings, clips, engine oil, distilled water, oil filter, brake oil, and fuel filter are mostly covered.
- New Key Protection Cover
- Once in a lifetime everyone would have lost or misplaced their car keys. In such cases, the insurer can offer help by covering the costs incurred on the replacement and repair of your car keys.
More Benefits of Buying Car Insurance Online
Buying car insurance online is a common practice today. With the buying of 4-wheeler insurance policy online, you can insure your car against any damage due to an accident, theft, fire etc within 2 minutes. If you are wondering why most people prefer to buy four wheeler insurance online, check out its benefits below:
No Needs More Agents
Offline purchase of insurance policies involve agents who try to sell their own product rather than suggesting you a better policy from another insurance provider. Purchase of new car insurance policy online will eliminate such agents and you can buy the best policy after comparing various plans offered by different insurance companies.
Zero Needs More Paperwork
Another benefit of buying four wheeler insurance policy online is zero paperwork. Contrary to the offline mode which requires you to fill multiple forms, the online mode allows you to fill up all the forms online. You can also upload the required documents online making the application process digital and free of any paperwork.
