Answers to Embarrassing Car Insurance Questions

Written by Sharad Bajaj

Updated On Oct 14, 20232 min read

Revealed: Answers to Embarrassing Car Insurance Questions

Purchasing car insurance can seem like it is an intimidating process. There are many questions that you may have and would feel too afraid to seek out the answer to. Let’s read all about the answers to some common questions about car insurance that you may not know the answers to. You will find out that car insurance is less overwhelming than it seems and something you can easily know all about, especially with all this quick information.

What type of car insurance is mandatory?

It is commonly known that according to the Indian Motor Tariff, purchasing car insurance is mandatory in order to legally drive a car on Indian roads. However, with the various different types of insurance available, it can be confusing as to which one should be purchased. It is mandatory to purchase at least a Third Party car insurance. For your information, Third Party insurance is also known as Liability Only insurance.

Can I purchase only car insurance add-ons?

Car insurance add-ons are features that help strengthen the insurance policy, by offering coverage for varied and specific scenarios in order for you as the policyholder to be able to tailor your policy exactly to your needs. However, they are available only in addition to an existing policy and cannot be purchased as standalone items. They are only available with Standalone Own damage insurance and Comprehensive insurance, not with Third Party car insurance plans.

What is NCB?

NCB stands for No Claim Bonus. It is a discount that is applicable at the time of renewal in case no claims have been raised by you during the policy tenure. It is cumulative in nature and can go up to 50%.

Can I take any action to reduce my car insurance premium?

Yes, you may accumulate NCB over the years to fetch a discount at the time of renewal. Also, you can install anti-theft devices approved by Automotive Research Association of India. These will be seen by the insurance company as reducing the risk of theft and thus fetch you a cheaper premium.

What is IDV?

IDV stands for Insured Declared Value. It is the assessed market price of the car that is determined by the insurance company. It depreciates over time and in case of a claim you would be compensated for the IDV of your car.

Is there a way to be compensated for the on-road price of the car instead of the IDV?

Yes, there is. You can purchase the car insurance add on Return to Invoice. With this, you would be compensated for the entire on road price of your car in case of a claim, rather than the depreciated IDV.

What are deductibles?

Deductibles refer to a certain amount that you as the policyholder would agree to pay in case of claim. They are of mandatory as well as voluntary variety. Voluntary deductibles would reduce your premium but are not advisable as they incur you extra cost at the time of raising a claim.

Conclusion

It is important to be aware of the various aspects of the process of purchasing car insurance before you do so. With this knowledge you may now feel more confident and informed about car insurance.

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Written by Sharad Bajaj

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Sharad is an insurance industry veteran who has managed motor insurance products for over a decade. He helped set up and scale the motor insurance vertical for a leading insurance company in his previous stint. In his spare time, Sharad likes to read and be in tune with nature.