10 Most Common Questions on Car Insurance Answered

Team Digit, 16 Jan 2019

When it comes to buying a car insurance plan, due to the great number of plans that are available in the market and the features present in each plan, it can be difficult for anyone to choose the insurance plan that best suits them.

Contrary to popular belief, one should never opt for the most common car insurance plan, the plan that friends have or the most expensive policy in the market. Those who are buying a car insurance plan should choose the insurance plan that best suits them in every way.

A car insurance plan is meant to protect a vehicle from any type of unforeseen risks. This plan financially aids the insurance holder when damage is incurred on the insured vehicle as a result of unavoidable circumstances, subsequent liabilities and certain natural and man-made causes.

A lot of questions that need to be answered go through the minds of those who want to buy a car insurance plan for their vehicle. Some of the most common questions and their answers include:

Q1. How is the Premium for a Car Insurance Calculated?

The premium for a car insurance is the amount of money that the insurance holder has to pay on a regular basis to the company in order to maintain the insurance policy. This premium has to be paid as per the conditions of the insurance company. The premium for a car insurance varies from car to car. Some of the factors that help determine the premium amount include:

  • Insured Declared Value (IDV)- which is determined by the insurance company and is an estimate of the maximum amount up to which a claim can be made on that vehicle. This value keeps on changing over time and depending on a number of factors which is the reason why the premium for car insurance also keeps changing.
  • The cubic capacity of a car- that is, the size of the engine of the insured vehicle. The higher the size of the engine, the more the premium.
  • The age of the insured vehicle is an essential factor- the more the age of the vehicle, the higher the premium.

Q2. What is the duration of My Insurance Cover and Can I Extend It?

The period for which car insurance is active is stated in the policy term itself. Those who want to extend their insurance term can do so by regularly paying the premium and getting an extension on their policy term. Most companies allow insurances to be extended however, it varies from company to company. Any individual who wants to extend their insurance plan must notify their respective insurance companies about their wishes.

Q3. What is Third Party Liability?

In India having a third party liability coverage within a vehicular insurance plan is compulsory for all insurance holders. If the insured vehicle causes inconvenience to any third person or causes property damage of any sort, the insurance company takes care of the medical expenses and repairs on behalf of the insurance holder.

Q4. What Documents are Required for Getting a Car Insurance?

The documents for getting car insurance vary from one company to another. For people buying car insurance, it is mandatory to have a valid driving license and all registration papers for the vehicle. Companies also require a bank statement to prove that the premium for car insurance can be paid on a regular basis.

Q5. How Do I Make a Claim on My Existing Car Insurance?

For those who are wishing to make a claim, there are two ways in which they can do so. The first type of claim involves the insurance company taking care of all the finances on behalf of the insured individual directly. The second type of claim is when the insured individual pays for all damages caused to and by the vehicle and is later reimbursed from the insurance company. The reimbursement method is only possible after the company receives sufficient proof of the expenses made from the customer’s side.

Anyone who wishes to claim on their car insurance can call their insurance company and register a claim. Online claims can also be made depending on the company from where the insurance has been bought.

Q6. What is a No Claims Bonus?

For those who have not claimed their insurance plan for a year or more, they are entitled to receive a special type of bonus known as the No Claims Bonus. For each additional claim-free year, the amount on the bonus keeps on increasing and ultimately leads to great returns for the customer. Many insurance plans allow customers to transfer their No Claims Bonus from one car insurance plan to another.

Q7. If Someone Else Crashes My Car, Will My Insurance Cover It?

If another individual who has a valid license is driving your insured vehicle, then rest assured your insurance plan will cover everything. At the time of buying a vehicle insurance plan, the number of individuals who are going to be covered under the plan needs to be mentioned before the plan is bought. However, third-party liability will take care of the individual who is driving the insured vehicle.

Q8. How Can I Make an Insurance Claim Online?

The internet has now made it possible for anyone to get any service that they want anytime, anywhere. Making claims online is the fastest way in which a claim is registered with the insurance company. Insurance companies have online websites where insurance holders can make their claims. The companies also have 24x7 calling and online chat facilities to help customers to understand their insurance plan and procedures further.

Q9. Can I Reduce the Premium for My Car Insurance?

Premiums keep on increasing on car insurance over time with the increasing age of the car. Premiums on car insurance can be reduced by making sure that the vehicle is in top-notch condition, is being driven safely so that no claims are needed to be made. Insurance companies also offer regular discounts that should be used by customers and incorporated into their policies.

Q10. What are the Exclusions for My Car Insurance?

Each insurance plan has its own separate set of inclusions that should be read and understood by every customer before the plan is bought. Some of the common exclusions of a car insurance plan include:

  • If the car is being driven by someone without a license, by someone, who is under the influence of alcohol or drugs, by someone for illegal purposes.
  • Any loss or damage on the insured car due to terror attacks, war, nuclear accidents or hostilities.
  • Damages caused to the insured vehicle on purpose.
  • Damages incurred on the insured vehicle outside the physical coverage area.
  • Damages caused to the insured vehicle due to the aging of the vehicle and lack of maintenance.

So, don't forget to add an extra layer of protection to your car with a car insurance policy!

Team Digit

Digit is a General Insurance company on a mission to Make Insurance Simple for people. We are backed by Fairfax, one of the largest insurance companies in the world.

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