Most of you know that a car insurance policy has been mandatory by the Motor Vehicles Act, 1988. But, do you know about the benefits and features of such plans?
Many don’t. They simply buy a car insurance plan because they are mandated to do so. But, besides being mandatory, a car insurance plan also has many benefits and salient features. Let us exploreits benefits and features:
Features of Car Insurance
There are some salient features of car insurance which include the following:
- Types of car insurance – There are two types of car insurance policies available in the market. One is the third party liability policy which is mandatory by law. The other is a comprehensive package policy which provides a wider scope of coverage
- IDV – Car insurance plans have an Insured Declared Value which represents the sum insured of the policy. The IDV is calculated by subtracting depreciation from the car’s market value
- Premium – Premium depends on the type of policy, the car’s make, model and variant, city of registration and coverage features
- Tenure – These plans come for a one year period after which they should be renewed
- Claims – It can be cashless or reimbursement in nature
Benefits of Car Insurance
The benefits can be understood from the following points:
- Comprehensive Coverage – If you buy a comprehensive plan you get coverage for third party liabilities and also for the damages covered by your car. In case of third party cover you get compensation for your financial liabilities. Moreover, the repairs of your car are also covered under the plan sparing you financial nightmare.
- Fulfilment of Legal Mandate – Since the Motor Vehicles Act mandates a car insurance policy you get to fulfil the legal mandate with the plan.
- Add-ons – Additional coverage benefits also help in increasing the scope of cover of your policy. You can choose the required add-ons and enjoy a wider coverage.
- Helpful in Case of Theft – If you lose your car to theft, your comprehensive car insurance policy pays a lump sum benefit which helps you in replacing your lost car without much of a financial strain.
- Protects you against Accidental Deaths and Disablements too – Personal accident coverage is found inbuilt in many car insurance policies. This cover compensates you in lump sum in case you face an accidental death or are disabled in an accident. The lump sum benefit helps you in meeting any financial loss which you suffer due to such accidental contingencies.
- No Claim Bonus – If you don’t make a claim in your car insurance plan, you get a no claim bonus. This bonus is given in the form of a discount in the renewal premium. You can earn a discount of up to 50% using the no claim bonus.
- Peace of Mind – When you are covered under a car insurance policy you know that you would get financial compensation if you are involved in any kind of mishap. This gives you a peace of mind and secures your finances.
Now you know the car insurance benefits and its relevant features. Given the car insurance benefits, it is always wise to renew your car insurance policy on time. In case of break in renewal, you tend to lose not only the benefits of car insurance coverage but also the security which the policy brings. So, renew on time to enjoy the numerous benefits of car insurance.
Hope you enjoy reading. If you still have queries regarding car Insurance policies in India, Visit Motor Insurance FAQ page.