8 Important things to know about car insurance

8 Important things to know about car insurance

If you want to know some important things about car insurance, then definitely read this post till the end. With the information you will get in this post, you will be able to buy car insurance, and you will be able to know what cover you should take and what not? Which car insurance is necessary legally, otherwise the challan is deducted?

8 Important things to know about car insurance

In this post, we will also learn about the words used about car insurance. What is the first party, third party, add-on cover in car insurance, what is no claim bonus, what is covered, and what is not covered in the insurance policy? In this post, we will know about cashless service centers, etc.

Essential information

If you have a car, then there is no problem if you do not know everything about car insurance. But you need to know some important things so that you do not have problems while claiming insurance after a car accident.

  • If you buy a car from any car dealer, then they give you insurance for a few years at the time of buying the car. And as soon as our insurance starts running out, they ask you to get it renewed.
  •  Since the car dealer is a businessman, then they will give you the policy in which they have more profit and not yours. If you do not know anything about car insurance, then you will buy the same insurance as your car dealer says.
  • The coverage you do not need in car insurance is also given to you and due to this your insurance premium increases.
  • Some things are not covered, due to which you get some service in the insurance claim, nothing else. Also, you do not get the full amount of insurance.
  • If you have some knowledge about car insurance, then you can save money and cover the things that need to cover in insurance

You will know the important things that you need to know about car insurance.

The first party, second party, and third party

You have insured your car, then you are called the first party. The company that insures you is called a second party. If there is an accident with your car, your car collides with another person, his car, bike, or any other vehicle or property, then it is called a third party.

How many types of car insurance are there?

Two types of car insurance.

  • third party car insurance
  • Comprehensive car insurance

Apart from these two, any other car insurance is added on. Now, what is this add-on? We will also know about this but first, let us know about third party and comprehensive car insurance.

4. What is third party insurance

Any person, vehicle, property, etc. with which your car collides is called a third party.

Let us take an example to understand third-party insurance properly.
Let’s say your name is Rahul, and you hit Mohan’s car.
In this, Rahul is the first party, and Mohan whose car you hit is the third party.

If you have done third-party insurance only, then Mohan’s loss is covered in it. If the collision hits Mohan’s car and Mohan is also hurt, then in this third-party insurance case, only Mohan will be paid by the insurance company for his car and treatment.

4.1 Who is covered in third-party insurance and what is covered in third-party insurance?

In third-party insurance, only the third person, the person with whom you have had an accident and his property is covered.

Here we have considered Mohan as the third party, so Mohan will be covered in the accident, there is insurance cover for his treatment and death.

If Mohan dies in an accident, the court decides according to his income, how much compensation the insurance company will have to pay to Mohan’s family.

Mohan’s car will come in the third party property. If the first person you have hit Mohan’s bike, any pet animal like buffalo cow, etc. So the insurance company will pay Mohan for all of them too. All these will come in third-party properties.

You can check what is being covered in the third-party property while buying an insurance policy.

Here the company will not pay for getting your car repaired or your treatment etc. In third-party insurance, only the person whose loss you have caused is covered, you are not covered.

Based on the loss suffered by Mohan in the accident, the court decides how much compensation the insurance company will have to pay to Mohan.

4.2. Why is it legal to have third-party car insurance?

According to the Motor Vehicle Act 146 in India, third-party insurance for any vehicle is required by law. If your car does not have third-party insurance then your car challan will be deducted.

If I do not insure my car, if there is an accident I will not get the benefit of insurance, then I have no problem. Then why has the government made third-party insurance legally mandatory?

 Many people who drive a car or a bike have a normal income, if there is an accident with their car or bike, and in that accident, there is damage to the expensive car of a rich person or that rich person has any serious injury or death. It becomes

 In this case, the person who has caused the accident with that rich person, then that ordinary person is unable to pay the damages to the rich person’s car. If that rich person dies, then according to his income, the common man who did the accident cannot even give him compensation. Keeping these reasons in mind, the government has made it legally mandatory to have third-party insurance.

5. What is Comprehensive Insurance?

Comprehensive car insurance is also called first-party insurance. In this, the one who ensures, that is, the one who has the car, his own car is insured. You get comprehensive car insurance to cover the loss of you and your car in an accident.

The premium price of comprehensive insurance is almost two times that of third-party insurance.

If there is any wear and tear in your car accident, it will include your car

  • Metal parts are -100 percent covered
  • Plastic parts – 50 percent
  • Gillash Parts – Covers up to 50%.

6. What is add-on insurance in car insurance?

When you take insurance, if you want to get insurance cover in addition to the cover that is given to you in comprehensive insurance, then you have to take an add-on policy in your insurance policy.

As you have seen that in comprehensive the plastic parts of your car are covered only up to 50 percent, and the engine of your car is not covered if you want to cover them completely. So you have to get an add-on cover.

Some add on covers that are offered in car insurance

6.1 zero depreciation car insurance add on the cover 

If you provide zero depreciation add-on cover in your policy, then the insurance company bears the entire cost of any damage caused to your car. As you have seen that many things are not covered in the comprehensive, like if the plastic parts break, then you get half of their money. But if you get zero depreciation to add on, then you get cover for the full cost of the wear and tear of the car.

Zero depreciation is also called zero dep add-on cover.

Even in zero depreciation, some things are not covered.

6.1.1 File charge –

Even after taking zero depreciation, you have to pay the filing charge.

6.1.2 Consumable parts –

 We have to pay the price for the parts that wear out. Such as oil, grease, nut bolts, and some such parts which wear out continuously such as tires, etc.

For consumable parts we can take a separate add-on, it is not added in zero depreciation.

6.1.3 Salvage cost –

 If some parts are changed in our car, then we bring back the broken parts which come out, we call it Salvage cost. The insurance company deducts its money.

6.2 engine protection cover add on –

 You have to take a separate add-on for your engine cover. If the engine was filled with water, due to which it got damaged, then for this you have to take engine protection cover.

If your car is parked in such a place where there is a risk of water filling the engine in rainy etc., then be sure to take engine protection cover in your car policy.

6.3 No claim bonus add on the cover –

 You do not claim your car insurance for the whole year and you take the no claim bonus add-on. You are then given back a percentage of your premium at the end of the year. If this money is not given back, then that amount is deducted from the next year’s premium.

6.4 Daily Allowance add on insurance cover –

You get injured in a car accident and have to be admitted to the hospital. If you add Daily Allowance while taking insurance, then the insurance company pays your income for the number of days you are hospitalized at the time of a car accident. 

If you earn one thousand rupees every day, then the insurance company will give you one thousand rupees every day, till you are admitted to the hospital.

 6.5 24*7 roadside assistant add on insurance cover –

If you add 24*7 roadside assistance in insurance, then your car gets damaged somewhere on the way, then you can call a car assistant at any time. You do not have to pay money to the assistant because you have taken a cover for it, but you have to pay for the goods that you need for the repair.

6.6 consumable add insurance cover –

Those parts of the car that wear out and wear out over time, are called consumable parts. Consumable parts are not covered in an insurance policy, and they are not covered even in zero depreciation.

If you want a cover for consumable parts also, then you have to take a separate add-on cover for it.

7. What is IDV? Who decides the IDV?

IDV (Insured Declared Value) in insurance is the maximum amount that you can claim. While buying car insurance, you have to decide the IDV of your car. It is the current price of your car which you tell the insurance company.

If in any natural calamity or accident your car is destroyed or your car is stolen. Then you will get the same amount in insurance as the IDV of your car.

The higher the IDV of your car, the higher will be the premium of the car.

8. Be sure to find out about the cashless service center in the car insurance policy.

Let’s say your car has an accident and you took insurance and instead you have given the car to be repaired at the service center, then if you get the car repaired in a cashless service center you will not have to pay any money.

But if you do not get the car repaired in a cashless service center, then you will have to first pay the money to get your car repaired, and later you will have to claim the insurance money from the insurance company.

Therefore, while getting insurance, keep in mind whether the company is providing the facility of a cashless service center or not.

Also, get information that if the insurance company is providing the facility of a cashless repair service center, then in which city the company’s service center is located. The company to which your car belongs has its repair cashless service center or all types of vehicles are repaired in the same service center.

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