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Is your car's value comprehensively covered?

While insurance can help protect you from losses, ensure you do it the right way.

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For most car buyers, insurance is just one more document to be signed and cheque to be handed over while purchasing the vehicle. It is only a year later, when the renewal comes up that the wide array of options comes into focus. Suddenly you are asked to choose between multiple providers and whether you wish to opt for third party liability coverage, collision coverage or comprehensive coverage. They also ask you to quantify aspects like the insured declared value or IDV so that the premium amount can be set based on it.

Rather than rely on recommendations from an insurance agent, doing a bit of homework yourself can help you to take an informed decision. With online eligibility calculators, you can even verify whether the proposal being offered is accurate or not. Here are a few aspects you need to keep in mind.

Research online
According to the team at policybazaar.com, an online comparison helps the insured not just to get the best premium available but also to add valuable riders and benefits to the plan. Comparing quotes can save you up to 55% on car insurance premium.

Did you know?
For every claim free year, the insured is rewarded with a discount on the renewal premium? This discount is No Claim Bonus (NCB). It is cumulative and increases every year. It usually ranges from 10% to 50% and can save substantial amount of money.

Thumb rules
A SUV will always have a higher premium than a family car. Being more vulnerable to combustion, a CNG fitted car is usually insured at a slightly higher premium than a plain petrol/diesel car. Most insurers provide a cover for your car accessories at an additional premium of 4% on its value, according to policybazaar.com.

Key benefits
A comprehensive car insurance policy for your car keeps it secure against damage caused by natural and man-made calamities, including acts of terrorism, according to ICICI Bank. You can avail of own damage, personal accident and liability cover all in one policy.

What is not covered?
Normal wear and tear and general ageing.

Depreciation or any consequential loss.

Mechanical/ electrical breakdown.

Damage to tyres and tubes unless the vehicle is damaged at the same time, in which case the liability of the company may be limited to 50% of the cost of replacement.

Vehicles being used otherwise than in accordance with limitations as to use.

Damage to/ by a person driving any vehicles or cars without a valid license.

Damage to/ by a person driving the vehicle under the influence of drugs or liquor.

Loss/ damage due to war, mutiny or nuclear risk.

Options available
1. Get daily allowance when your car is in the garage

2. Cashless servicing facility at a network of garages

3. Coverage on replaced parts with zero deduction for depreciation

4 Accidental cover facility for co-passengers

5. Members of certain automobile associations can get discounts

Expert Speak
Ramesh Ramani, Sr VP - Consumer Lines- Tata AIG General Insurance Co Ltd, explains that there are a lot of sentiments and emotions attached to assets like your preferred automobile and therefore, it is absolutely important to take their care. For instance, during festivals like Diwali, a wayward rocket entering your sedan can set you back by few thousand or sometimes a few lakhs, depending on the extent of the damage. To ensure that owners are protected from such unforeseen incidents, a fire and allied perils cover is available under auto insurance. The fire and allied perils cover provides protection for your assets against fire, earthquake, floods, inundation, storm and 14 such other perils. In increasingly unpredictable times, it is wise to get your cherished assets covered by this policy.
Ramesh Ramani
Sr VP - Consumer Lines- Tata AIG General Insurance Co Ltd

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