Stay secured on the road

Yes. It is mandatory to have a third party insurance cover under the Motor Vehicles Act. In India, getting your car insured is compulsory by law, not an option. The Motor Vehicle Act of 1988 makes it mandatory for all vehicles to be covered under an appropriate insurance policy before they can ply on the road. This compulsory nature of the law only protects you against third party liabilities. It’s a wise decision to buy a comprehensive cover to give your vehicle a complete protection.

The basic insurance covers offered are as follows:

• Liability Only Policy: This policy covers the liabilities towards the third parties as per Motor Vehicles Act. Motor Vehicles Act makes this cover a mandate for any vehicle to ply on Indian roads.
• Package Policy: Comprehensive package policy not only covers the liability towards third parties but their own damage as well. Own damage to the insured vehicle means loss or damage to the vehicle insured, by specified perils, is also covered subject to the value declared and other terms and conditions in the policy.
• Bundled Policies for New Vehicle: Private Cars: 1 year of own damage + 3 years of third party. Two Wheelers: 1 year of own damage + 5 years of third party.
• Long Term Package Policies for New Vehicle: Private Cars: 3 years of package (own damage and third party). Two Wheelers: 5 years of package (own damage and third party).
• Standalone Own Damage Policy for Private Cars & Two Wheelers.
• Long Term Liability only policies for new vehicles: Private Cars: 3 years of liability policy. Two Wheelers: 5 years of liability policy.

In motor insurance, No Claim Bonus, as the name suggests, is the insurer’s reward to the policyholder for not making a claim in the preceding years. NCB discount ranges from 20% to 50% on the own damage premium. As per the schedule of tariff, NCB can be earned in its own damage section of policies covering all classes of vehicles but not on Motor Trade Policies (road transit risks / road risks / internal risks) and policies that cover only fire and / or theft risks. If, however, a claim is lodged, the NCB is lost in the subsequent policy period.

NCB is given to the insured and not to the insured vehicle. Hence, on transfer of the vehicle, the insurance policy can be transferred to the new owner but not the NCB. The new owner has to pay the difference on account of NCB for the balance policy period. The original owner can, however, use the NCB on a new vehicle purchased by him.

The NCB discount slab is applicable, if you change the insurer on renewal. You need to produce proof of the NCB earned by the way of renewal notice from the current insurer. Alternately, you can produce your original, expiring policy along with a certification that you have lodged no claims on the expiring policy. For this the proof can be in the form of a renewal notice or a letter confirming the NCB entitlement from the previous insurer.

Insurance can be done at any of the offices of General Insurance companies generally doing Motor Insurance business. You can also purchase insurance for your vehicle online.

Premium depends upon various factors. Third party liability premium rates are laid down by IRDA. The own damage coverage is left to be rated by individual insurance companies after duly filing rates with the Insurance Regulatory and Development Authority. The same is determined on following factors amongst others — Age of vehicle (IDV- insured declared value), discounts / loadings- appropriate bonus / loading/ discounts along with past claims experience are taken into account while calculating premium. Therefore, approach the insurance company with vehicle details for exact premium.

Existing Insurance will be renewed in any office of existing Insurer. Please contact any of the offices of the existing insurer for an exact premium. You can also renew your policy online.

It is strongly recommended to renew your insurance before the expiry of the existing insurance. This keeps your vehicle insured against the risks without any break in insurance and takes care of any loss within the ambit of the policy you have. This also retains the No Claim Bonus, the hard-earned discount in premium for claim free year/s. Moreover, you are also not worried about the breach of law.

If there is a break in insurance for even a few hours, the insurance can be renewed only on physical inspection of the vehicle.

A new insurance can be obtained if the policy has already expired. The vehicle will be physically inspected by a company official or an authorized representative or agency as a break in insurance has occurred. The entitlement of No Claim Bonus will be as per rules.

Never commit this mistake. Remember, registration and insurance of the vehicle should always be in the same name with the same address. The claim is not payable otherwise. A fresh proposal form needs to be filled in. There is a nominal fee charged for transfer of insurance. Please contact the concerned insurance office for guidance on terms and conditions.