How Car Insurance Policy Helps You Save Your Money

The moment someone talks about getting the car insured, most people have a tendency to consider it as yet another cost. It is like an expense that should be kept at the minimum. People scramble to buy policies that offer really low premiums as car insurance is never a priority, but an unwanted liability. The truth is so very different though! A car is a valuable asset and despite losing its value every year due to depreciation, getting it insured can still help you save money, as long as you own it.

Presenting to you some of the most important reasons why having your car insured is actually monetarily beneficial for you and can save on money too:

1) Legally Compulsory

Whether one likes it or not, it is legally mandatory to have your car insured in India. If you are caught driving your car without insurance, you’ll be liable to pay fines and penalties and repeated offenses can lead to bigger punishments under the law. That’s why every car company sells their product with an insurance coverage of at least a year after which the onus lies on the owner to renew car insurance.

2) Accidental Claims

No matter how safely you drive your vehicle insurance, an accident can happen anytime, anywhere, if not by your mistake then may be due to some other driver’s. In such a scenario, having a comprehensive insurance coverage can help you get your car repaired without incurring expenses from your pocket. A car is a costly asset and maintaining it or repairing it can be a costly affair. Insurance helps you to keep such expenses in check.

3) Damage To Third Party

If the accident happens due to your fault, not only will you have to take care of your car, but also pay damages to the affected party that may run into a few lacs. This is where a car policy can come to your rescue. It will provide for repair of the affected person’s car as well as pay compensation in case of bodily damage to the affected person in terms of hospitalization expenses, doctor’s cost, surgery expenses, etc. Whether there is a loss of limb or death, the car policy covers such third-party claims relieving you from incurring such back-breaking expenses. In short, it shields you from all third party liabilities and expenses while at the same time ensuring that your damages are also equally provided for.

4) Natural Calamities

Rains, floods, earthquakes, fire, etc. are some disasters over which no one has any control. Imagine you bought a brand new car and within a month it got submerged in flood waters. Scary thought, right? With car insurance, you don’t have to worry about paying expenses to get your car back in brand new shape.

5) Man-made Disasters

These would primarily include burglary, theft, riots, etc. and with an increase in such events in almost all the cities of the country, you should not lose your sleep over it. If you have bought the right car policy, you can be assured that the insurance company will cover you for such damages or theft and your hard-earned money won’t go down the drain. A few rupees for insurance premium can help you save lacs in times of need!

Hope this helps you understand that getting your car insured is a necessity rather than a compulsion under law. It is for your own good. When you buy the car, the company sells it to you with insurance valid for one year. After that, it becomes your duty to renew car insurance and continue enjoying the benefits as it becomes your friend hell bent on saving your money!

[Source: https://www.comparepolicy.com/blogs/car-insurance-policy-helps-save-money/]

Don't let dealers take you for a ride on insurance world

Car insurance is mandatory by law in India. The optimum cover that you need to hold is the third party insurance. With number of companies introducing lucrative insurance packages and competition getting stiff each day some dealers and manufacturers come up with cashless car insurance for customers during festive season. They say that they will take care of the premiums for the dedicated tenure and you enjoy the benefits on motor insurance. The offer entices buyers as it helps them save money on the premium on this mandatory cover. However, according to automobile industry experts it is not possible to offer motor policy free of cost. You need to understand the pros and cons along with the hide charges behind your car policy. Regulations do not permit motor policies for tenure of more than a year. The dealers merely give an undertaking to fund the premium when the policy comes up for renewal. They might have made provisions for these payments.

Dealers bundle these policies with the entire sales package, and offer to pay the premiums instead of providing a cash discount. Nowadays for flexible sale they often put across such advertising tactics to provoke customers in buying motor insurance online. Honestly speaking, these are not free insurance covers, as an insurance policy can never be offered free. These policies are like plain vanilla policies without add-on covers like depreciation, return of invoice, etc. You need to understand the scope of coverage being offered before signing up. Besides, since the dealer would have tied up with a particular insurance company to offer the package, your choice will be restricted.

With the advent of internet insurance world has become transparent and simple. It is advisable you can compare car insurance features, benefits, discounts etc. and then buy motor insurance online on the spot. While buying insurance online pricing could be better than what is otherwise available in the market. Also, in the event of a claim, the dealer is likely to be more supportive and manage the liaison with the insurance company and surveyor. It is advisable customers should take a close look at these policies before signing up for them.

One more concern is most car insurance policies offered free do not carry the necessary riders to provide wholesome coverage for a car. The key factor to consider is the coverage of the policy in terms of riders like depreciation shields, engine protector, 24X7 spot assistance and vehicle replacement advantage. That is why you should study the policy to find out whether it is merely a third-party cover, comprehensive policy or a fully-loaded package with add-on covers. The customer needs to study the coverage closely. It is important to have a policy on zero depreciation as the deductibles could be very high on claims under such a policy. So, compare motor insurance online available in the market with the bundled cover being offered to you before making a decision.

Also, if you are signing up for policy, find out how the dealer plans to honour the commitment. Motor insurance online policies offer various benefits, discounts and no-claim bonuses. Find out how a claim will affect the arrangement. Things could get complicated, so it is better to bargain for a cash discount instead of the bundled cover, if possible. A customer, who does not make a claim in a particular year, gets a no-claim bonus (NCB), which lowers the premium for the subsequent year. Similarly, if he or she makes a claim, he or she needs to pay a higher insurance premium.

[Source: https://carinsuranceonline2015.wordpress.com/2016/06/29/dont-let-dealers-take-you-for-a-ride-on-insurance-world/]

Will my motor insurance really cover that? No way!

Here at Robison Service we see lots of unusual failures.  Many of the cars we work on come from a long way away, which means their owners do all their “easy service” close to home.  What we are left with is the difficult, complex, and time-consuming work no one else can do.

Sometimes that work is at the customer’s expense.  However, we find ourselves working for insurance companies more often that you’d think.  Most of the time, our clients do not know the problem with their car may be covered by insurance until we tell them.

What kinds of problems are covered?  I’ll give you some examples.  But first, let’s go over the components of your insurance policy.

Motor Insurance

Basically, you have three kinds of coverage:

• Liability insurance covers injures to other people and their cars and property.  We don’t usually make use of the liability parts of people’s policies unless we are fixing a car someone else damaged, and that third parties’ insurance is paying.
• Collision coverage pays when you damage your car by hitting something you could or should have foreseen.  This is the part of the policy that pays for repairs if you hit another car, a guardrail, or a tree.  It would also cover damage to the undercarriage if you hit a deep pothole.
• Comprehensive coverage covers “all other risks” to your car.  The scope of coverage varies slightly from state to state, but in general, comprehensive covers all damage to your car that is not covered by collision, and is not a result of normal wear, negligence, abuse, racing, or certain other excluded activities.  People often refer to this part of a policy as “fire and theft coverage” because those are the best-known comprehensive claims.

On more than one occasion, customers have called me to say their car stopped running, and they were having it towed in.  When the car arrived we found it out of oil or coolant, with a damaged engine.  If the car “ran dry” due to a simple leak and the owner’s failure to check his fluids, he’s on his own.  But if there is a crack or hole because the owner hit something. We probably have a comprehensive insurance claim.

Am impact to the engine is covered just the same as an impact to the hood or windshield.  The difference is, an impact to the oil pan can lead to $10,000 in damage where an impact to the windshield is seldom more than a few hundred dollars. 

If you make a claim for engine damage doesn’t be surprised if the insurance company asks for proof the car was running well before the loss.  If they are asked to pay for a new engine they will try and determine the condition of the old engine before deciding what to offer in terms of repair.

That’s one more reason regular service and maintenance records are so vitally important! 

Every time we have a rain that suddenly floods roadways I hear from motorists whose cars swallowed water while driving through puddles where they expected clear road.  Most often water ingestion ruins the engine, and this too results in a comprehensive claim. 

What about damage under the car, when nothing was run over?  A common example comes from the Land Rover world.  The front drive shafts on Discovery II models are notorious for coming apart.  When that happens the shaft starts swinging round under the car.  If the vehicle is moving fast when this happens that shaft can do a lot of damage.  I see transmission cases smashed, floors torn up, and more.  Damage can easily exceed 5,000.

Damage from driveshaft failure will often be covered by comprehensive coverage.  The driveshaft breakage is a routine mechanical failure, which is not covered. However, all the damage that failed driveshaft causes is covered.   That fact is sometimes a surprise to appraisers, but here’s the theory, presented via a different example: Say your steering linkage breaks, and you lose control and crash into the guardrail.  “Of course crashing into the guardrail is covered,” you say.  Well, the guardrail crash was the consequential result of steering linkage failure.  And the torn up undercarriage is the consequential damage that results from the driveshaft failure.  Both should be covered under the same theory of coverage.

By excluding the specific failed mechanical part and them making a claim for all consequential mechanical damage it is often possible to get a surprising amount of mechanical repair motor insurance covered under the comprehensive insurance umbrella.

Another example:  A car won’t start, and we find the computer compartment filled with water.  The cause:  A water drain that was blocked with pollen.  The repair: Thousands of dollars of new electronic modules to replace the ones that got immersed in water.  This claim isn’t so clear-cut.  If the car has drains, someone should be blowing them clean.  If the drain-cleaning is part of a scheduled maintenance activity, and the customer can show that was done, he should be all set.  If the drains clogged after a local “pollen storm” that will probably cover him too.   However, if the area is filled with rotted leaves and debris and it’s obvious the drains have not been cleaned in years – watch out!  The insurance company may tell the owner he caused the problem by failing to maintain the car as required.  The technical term for that is contributory negligence, and it can leave someone on his own with no coverage or reduced coverage.  The moral:  Always check stuff like that when the car is in for service.  You never know what you will find and a simple thing like leaves in a drain tube can have huge consequences if left unnoticed.

The final thing I’ll mention is rodent damage.  Some of our biggest insurance claims come when mice get into collector cars, and chew them up.  If they inhabit a car for long they leave a stench that cannot be cleaned except by upholstery replacement.  This damage too is covered by comprehensive insurance, and claims on Rolls-Royce and other collector cars can run into six figures.

Rodents can also cause fires, if they chew into electrical harnesses and they subsequently short out.  The moral:  pay attention to where you store your cars, and try and keep them rodent free.

I actually have a whole blog essay on rodent damage for those who have this problem.

In closing I will also add that I'm not a lawyer but coverage questions have more to do with reading the policy carefully and interpreting it that they do with the law.  I'm also not an insurance agent, or employed by any insurance company, except insofar as they pay us to fix their insured's cars.

Source: https://carinsuranceonline2015.wordpress.com/2016/06/08/will-my-motor-insurance-really-cover-that-no-way/

IRDA to Increase Third-Party Motor Insurance Premiums

Premium for third-party motor insurance cover that provides protection against damage, injury, death of a third person and/or damage to his/her property caused by your vehicle has recently got a steep jump. The effective rate announced by the Insurance Regulatory and Development Authority of India (IRDAI,) has been effective from 1st April this year.

A typical motor insurance policy has two types – (1) Damage to Own Vehicle, and (2) Third-party Cover.

Damage to Own Vehicle – This is, of course, provide cover for damage to your vehicle. According to the current law, the insurance companies have the freedom to determine the premium for the same. However, the insurance regulator has not made this ‘own-damage cover’ a compulsory cover.

Third-party Cover – This type of your vehicle insurance policy covers injury/death of a third person and/or damage to his/her property caused by your vehicle. The premium for this cover is decided by IRDAI making ‘third-party cover’ mandatory.

The regulator takes into account various factors to arrive at a suitable third-party insurance premium for variety of vehicles. It includes frequency of claims you made during previous year, average claim amount, expenditure involved in servicing the policy and cost inflation index etc.

In accordance with that, the regulator has announced the new premium rates with effect from 1st April, 2015. For the third-party insurance cover, premium rates will apply as follows:

Private vehicle with engine capacity up to 1000Cc: Rs.1468; earlier it was Rs.1129

Private vehicle with engine capacity from 1000Cc to 1500Cc: Rs. 1598; earlier it was Rs. 1332

Private vehicle with engine capacity above 1500Cc: Rs. 4931; earlier it was Rs. 4109

For two-wheeler with engine capacity up to 75Cc : Rs.519; earlier it was Rs. 455

For two-wheeler with engine capacity from 75Cc to 150Cc : Rs. 538; earlier it was Rs. 464

For two-wheeler with engine capacity from 150Cc to 350Cc : Rs. 554; earlier it was Rs. 462

For two-wheeler with engine capacity above 350Cc : Rs.884; No change

This increment reflects an overall increase of 30 per cent for small cars and 20 per cent for medium to large cars. Previous year, the increment in premium rates was about 20 per cent across the all engine types.

While for two-wheelers this raise in premium rates ranges from 14 per cent to 20 per cent. For previous year, this was around 10 per cent.

The logic behind such huge raise in the third-party premium rates year after year, is the huge losses that the insurers suffer on account of third party insurance claims.

[Source: https://carinsuranceonline2015.wordpress.com/2016/06/02/irda-to-increase-third-party-motor-insurance-premiums/]