3 Things You May Not Know about Car Insurance Policies
For some, their car is their biggest asset. And for the same reason, they decide to get the best car insurance, which offers a wide range of benefits. As a driver, they also ensure that their car never gets involved in any accident. This helps them increase their No-Claim Bonus (NCB). Using this bonus in the following year, the policyholder will have to pay a lesser premium amount.
If you follow all such rules too, you certainly know a lot more about your insurance benefits. Sadly,only 30 percent of the motor owners fall under this category. The remaining 70 percent, either buy car insurance policy used by their friends or the ones suggested by an insurance agent. This may not be a great decision. It is important to have a personal choice when it comes buying an insurance policy, since its benefits will affect you directly.
Mentioned below are three things that you may not know about car insurance policies:
- Your overall cost will increase if your policy lapses: Insurance companies run on stringent rules and they often see drivers without insurance as risky. This is because the government of India has made motor insurance compulsory. A licensed, but non-insured vehicle has higher chances of shaking the driver’s financial budget. It often happens that your current policy might have lapsed due to some reason. Or you were simply waiting for it to expire, since you planned on changing your car insurance company. In this case, make sure you purchase the new insurance policy well before the previous one expires. Otherwise, you would incur additional charges and pay a higher premium amount.
- Zero depreciation policy:As the insurance market is becoming morecustomer-centric,the zero depreciation coverleaves the user feeling satisfied. Commonly called the ‘zero dep’ policy, it offers complete coverage in case of damage, after removing the depreciation charges. For example, let’s say you bought a car 3 years ago and was completely ruined in an accident today. In a normal policy, a depreciation rate is added every year and the insured money would be much lesser than the cost of the car. Under the zero dep policy, even though the sum insured changes every year, it is higher as compared to the sum insured under a normal policy.The same works for the damaged parts of a car as well. Although the premium in a zero dep is slightly higher, it is definitely a smart choice.
- Changing laws: Ever since motor insurance came intothe market, it has been witnessing newer rules. This is to provide better policy plans to the users. The insurance agents bring out certain highlighted features of their policies only to make a sale. It is, however the duty of the user to research about the best car insurance policies and update himself with the current laws. The government has made it compulsory for all the new two-wheelers and cars to have a minimum of three to five year of insurance plan. Moreover, new laws will be made to increase the extentof cover in third-party insurance. Even while on road, it is important to have a clear knowledge about the fines and penalty charges. For non-insured vehicles, the government has increased the fine.
When it comes to motor insurance, it is important to expand your awareness and knowledge beyond the benefits of the insurance plan. Various other factors, like the ones mentioned above can make a big difference when you file for your car insurance claim.