Monday, April 11, 2022

What Are The Benefits Of Car Insurance? / Car Insurance Premium Calculated

What Are The Benefits Of Car Insurance?

Apart from own & third-party damage cover, car insurance offers other benefits as well. They are listed below for your reference.

Car Insurance
Car Insurance

Coverage Against the Damage of the Insured Vehicle

Having a comprehensive car policy offers coverage against damage or loss to your car due to accident, fire, or self-ignition.

No Claim Bonus

It is a discount that is offered to the policyholder for filing zero claims over the previous years. The discount can range between 20-50% at the time of renewal.

Additional Covers

Apart from the basic cover, there are several additional covers that you can opt for wider coverage, but they vary from insurer to insurer. A brief explanation of them is given in the latter part of the write-up.

Cashless Garages

You can get the repairs done in network garages, which are associated with your insurance provider. Its benefit? You don't have to pay a single penny. The bill will be settled by your insurance provider.

How Is Car Insurance Premium Calculated?

The car insurance premium is the amount that you have to pay to keep your policy active. It usually varies from insurer to insurer & model to model. To calculate car insurance premium, you can use the below-stated formula.

Premium= Own Damage Premium – (No claim bonus + discounts) + Liability Premium as Fixed by the IRDA + Cost of Add-ons.

Based on the below-mentioned points, the company determines the car insurance premium-
The manufacture year of the vehicle: This determines the age of the car. Older vehicles have low insurance rates in contrast to new automobiles.
Vicinity of registration of the vehicle: Your residential place and the vicinity in which you got your vehicle registered also has an impact on car insurance premium.
Model of the vehicle: If the vehicle has steeply-priced or uncommon spare parts, the coverage for the top class of the car might be higher as well.
Use of the vehicle: Car Insurance providers offer personal and business coverage rules. If a vehicle is used for commercial purposes, it will attract higher coverage rates.
Safety devices: Today, most of the vehicles are geared up with safety capabilities and anti-theft devices. You're eligible to get a discount on the premium of up to 2.5% (if your vehicle is secure). Also, the devices must be approved by the Automobile Research Association Of India.
Claims records: If you raise a claim against your vehicle insurance, the premium is likely to head up. If you abstain from raising claims, you may be rewarded with a No-claim Bonus (NCB).

Let's take the help of the above factors and display a practical example.

Car Variant Price of the Car IDV* Zero Depreciation (Add On)* Premium*
Hyundai Verna (2017) SX Plus 1.6 VTVT AT (1591 cc) Rs.13,00,225 Rs.9,79,195 Rs.3,917 Rs.36,095

Table Data updated on 08-02-2021

*The values are calculated on the basis of the city (Delhi) and year of registration (2020).

: FAQs

Frequently Asked Questions (FAQs) - Car Insurance
How many insurance claims can you file before you get canceled?

There's no set number of claims that an insurer allows before it decides to cancel your policy. It will also depend on the severity of the claims and is usually based on claims activity during a certain period of time, such as 36 months.

Why are my insurance rates going up?

Your insurance rates can increase for various reasons. It may be due to an increase in claims on your part, but it could happen if your insurer does a general rate adjustment for the type of coverage you have. If costs associated with repairing or replacing your insured property increase, that could affect your rates, too. Moving your car to a new ZIP code or state could even cause a rate change.

1. I have to sell my car. Can I transfer my existing car insurance policy to the buyer?

2. What is Constructive Total Loss in car insurance policy?

3. If I have CNG or LPG kit fit in my car, is it important to inform the Insurance Company about the same?

4. Is it possible to submit bills at the end of the year for all small repairs of my vehicle?

5. Is it possible to get a discount on the premium if I stay with a single insurer for several years?

6. I want to buy car insurance for Hyundai Creta. If I check quotes after every 20 minutes, will I get a better deal?

7. I have checked the quotes but I need some time to make the decision. Can you send me the latest quotes via mail to review later (if required)?

8. Can I move my commercial vehicle from the actual spot of the accident?

9. I have an electric car. Will I get a discount on its premium?

10. Can I buy two policies for a single car?

11. Can I cancel my car insurance policy?

12. The repair damage to my vehicle cost around Rs.20,000 but my cover is of Rs.15,000. Do I have to pay Rs.5,000 from my pocket?

13. Will I get the duplicate copy of my car insurance if I lose the original one?