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Demystify Motor Insurance Google+ Hangout – Queries and Answers (I)


Our Google+ Hangout on Demystify motor insurance aimed to clear every doubt that viewers had about motor insurance, regardless of the company offering it. However, due to time constraints, not every query could be answered live. That’s why we decided to compile a list of every query that was submitted to us during and before the Hangout, along with the answer to each.

Q.  Why does the insured value differ from one service provider to another for motor vehicle insurance? Is there a standard rule/method to calculate the amount to be insured for a two or four wheeler?

-          Anantha

A. For deciding the Insured Declared Value (IDV) up to five years, all general insurance companies follow the guidelines given by IRDA. However, the actual showroom price on which the guidelines apply may vary from dealer to dealer, depending on the discount given on new vehicle.

For the vehicles that are obsolete or aged over 5 years, the IDV is the agreed value between the customer and the insurance provider.

Q. Is there a provision for motor insurance renewal after or within 5 days of expiry of the previous policy, or an extension which is generally given for other insurance policies?

-          Rakesh Kumar

A. As per regulation, other than for health policies, all other policies have to be renewed before the expiry of the policy.

Q. As it is a very competitive market, what are the crucial and most important things to keep in mind while buying motor insurance? Hope I get an expert view to understand the same.

- Zaheer Ali

A. If the customer is offered a very high discount, then there is a possibility that exclusions are high at the time of claim. So it is very important to understand the auto insurance coverage.

  1. Deductible: Check whether the proposal form for the automobile insurance has been signed or not.
  2. Check the Claim Bonus:  The claim bonus should be declared correctly.
  3. Value of Motor Insurance Add-ons:  If there are any add-on covers, understand carefully if they are relevant to you or not. For e.g.: If there’s a woman driver, then go for an RSA cover. On the other hand, if your driving is quite frequent, then go for Depreciation Shield. Bajaj Allianz offers all these types of motor vehicle insurance coverage under Drive Assure Economy. Also, make sure that the two or four wheeler insurance policy is bought from a trusted source.

Q. If a person (who has a life insurance policy) meets with an accident; will he be able to claim insurance from both the car insurance company and the life insurance company?

-          Joseph Dias

A. In case of an unfortunate injury/loss of life, the relatives of the deceased can make a claim from the insurance company of the defaulting vehicle under motor insurance, and also claim the same through life policy.

Q. What are the provisions on liabilities of a policy holder and the right of a policy holder not known to the general public?  What is the suggestive due process in the event of mishap?

-          Omveer

 Motor Insurance is compulsory for all vehicles running on the road. In a motor insurance policy, apart from own damage claim of the vehicle, third party liability is also covered.

Q. a) Is 0% depreciation worth the additional premium amount?

b) Why is Cashless Settlement Division specific in a few cases?

c) Why is IDV sometimes lower than resale value?

- Raj

A. a) If you are a good driver and don’t use your vehicle frequently, then 0% depreciation is not very valuable. However, due to the new technology and high repair costs, 0% depreciation is worth it.

b)  It is for the convenience of the customer in case of a high claim amount.

c) For deciding IDV, all insurance companies follow the guidelines given by IRDA upto 5 years. However, the actual showroom price on which the guidelines apply may vary from dealer to dealer depending on the discount given on new vehicle. After 5 years, it is the agreed value between the customer and the insurance provider.

Q. If I am late by one day to renew my vehicle insurance, will it affect the car’s value?

-          Atul

A. If the car insurance renewal is delayed by one day, there is no impact on the car’s value. The market value of the vehicle depends on many factors such as re-sale market, age, etc.

Q. In case of multiple damage to the vehicle in one single accident, how can we convince the surveyor of the complex situation on roads accident to justify a single claim?

-          Rohit Agarwal

The claim has to be intimated within 24 hrs in order to decide the admissibility involving the driver, third party liability, etc. Thus, it is recommended not to delay the claim with the objective to accumulate all the accidents in a single claim. It also has to be kept in mind that minor scratches or refurbishment fall under the category of maintenance.

Q. It has happened to me more than once that when my car was hit by a lorry or a private bus, the owner refused to give any compensation and asked me to lodge a police complaint as their transport companies belonged to local MLAs. I ended up claiming from my own car insurance which raised my premium for the subsequent years. Can you advise the best way to handle such scenarios?

-          Sanjay Agrawal

A.  The own damage is to be claimed from the respective insurance company as per the agreement between insurance companies. This scenario may undergo change in the future if the third party is de-tariffed and the knock-to-knock agreement between the insurance companies is abolished.

And of course, remember to always have your car insurance policy with you, in case you face trouble and need to call for help! For more information on how our motor insurance policy can serve you on the road, click here.

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Published on:20 Jun, 2014

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