According to Indian law, it is compulsory for every automobile owner to get his vehicle insured and to get the insurance cover renewed every year. A motor insurance policy generally covers damage caused to the vehicle on account of the following factors: accident, fire, lightning, self-ignition, explosion, burglary, theft, riot and strike, malicious act, terrorism, earthquake, flood, cyclone and inundation.
Today there are 23 general insurance companies in the country. With so many players in the market offering homogeneous products with slight variations here and there, it gets difficult for buyers to decide whose insurance policy is best suited for them. In most cases, they are likely to consult either a broker or an agent. While both act as intermediaries between the insurance company and the customer, brokers are less likely to force you to buy a particular company's product. On the other hand, an agent can sell the policy of just one company. He will, therefore, push that company's product irrespective of its merits and suitability for you. So it's better to buy from a broker rather than from an agent. Further, before you buy from a broker, ask for his licence number.
Check at the IRDA website whether that broker is registered with the regulator.
Above all, if you wish to avoid overpaying for the cover, do a bit of research yourself instead of relying on what others tell you.
Choosing the right insurer
Below is a check list that will help you identify the insurer that is best suited for your needs:
First, visit a website such as policybazaar.com and compare the premium rates and also the features offered by different insurers.
Next, do some research on the claim settlement track record of insurance companies. Ask for feedback from existing customers. Try and buy insurance from a company that has the reputation for settling claims within a short span of time.
Check how many cashless settlement tie-ups with garages the insurer has. Consider the quality and the location of these garages. Does the list include those garages that you are most likely to visit?
Next, look for additional benefits: which insurer offers personal accident insurance for passengers and the driver? Which one covers the loss of personal belongings and car accessories?
Look for additional facilities from the insurer like towing facility and assistance in case your car breaks down.
Consider the various payment options available. For example, the EMI option is useful in case you do not want to pay the entire premium at one go.
Lastly, remember there is a lot of mis-selling going on in the market. Do not go just by the agent's or borker's words. Have him put all his promises down in writing and cross check them with a reliable source before making the final decision.
Purchasing the policy
Firstly, be truthful and accurate while filling up the proposal form. Ensure that you mention all details such as correspondence address, mobile number and alternative number, Insured Declared Value or Sum Assured (IDV is the maximum amount you can receive form the insurance company in case of any eventuality) accurately. Ensure that you mention the registration number, engine number and chassis number correctly in the policy. If the insurer finds discrepancies in these details, he could deny your claim.
If you have purchase a used car, make sure that both the registration certificate and the insurance policy are transferred to your name immediately.
In case you have sold your old car and purchased another, ensure that the facility of No Claim Bonus (NCB) on your existing policy gets transferred to your new vehicle's policy. This will bring down the premium you will have to pay on your new car's policy. Once you have purchased the policy, keep it in a safe and easily accessible location. Keep the policy number and the call centre number handy so that you can use them immediately in case of an accident.
If an accident takes place
If an accident takes place, try to note down the number of the other vehicle involved in the accident and the details of the witnesses present at the site. Go to the nearest police station and immediately file a first information report (FIR).
Report the accident to the insurance company also at the earliest. The insurance company's 24x7 helpline number will give you a claim or reference number. The call centre staff will also tell you which documents you has to submit for claim processing. Submit the details of the accident in the claim form. To make the task of processing your claim smooth and hassle-free, provide all relevant information to the insurance company - location, time, parties involved, passengers in the vehicle, and injury to occupants or driver at the time of accident.
The call centre staff will also give details of the nearest garage where the cashless repair facility is available.
In case your car is serviced in a garage outside the purview of the insurance company's network, you will have to claim your reimbursement later.
Finally, about two months before the date of renewal of your policy, you will start getting phone calls from brokers and agents promising attractive discounts. Do not cave in to their pressure and give your custom to one of them. Instead do the due diligence once again and see who will offer you the maximum value for money.
This article was originally published on May 25, 2010.
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