How Much Do You Really Spend On Car Insurance?

How Much Do You Really Spend On Car Insurance?

Smooth leather seats, a booming audio system, and a colour that makes heads turn; your dream car with these uber-fancy features may be must-haves. But you also need to insure your car!

The Motor Vehicles (Amendment) Act of 2019 lays down the dos and don’ts of vehicle ownership to ensure not only its safety and the rights of its owner, but of pedestrians, other vehicles and motorists on the street, and any third-party as well.

But have you wondered what you’d have to do to seek insurance reimbursement in case your car is stolen or damaged in an accident, or if it is involved in an incident where other people have been hurt, or property has been damaged?

That is why you should know what your insurance covers and what it doesn’t.

Know your motor insurance

Motor insurance for cars is offered in two broad formats:

In addition to these two types of insurance policies, insurance companies also offer an array of add-on covers:

• Zero depreciation cover (only available with comprehensive policy)
• Emergency roadside assistance cover
• Return to invoice cover (which helps you in fetching purchase price – the last invoice price – in case of theft)
• Engine and gearbox protection cover
• Consumables cover (for new nuts, bolts, pipes, engine oil, grease to AC gas, coolant and ball bearings)
• Garage cash cover (which pays commuting expenses while your car is being repaired at a garage)
• No-claim bonus
• Downtime protection cover (which offers protection damages/ loss resulting from manmade acts such as accidents, thefts or riots and/or natural calamities such as floods and earthquakes).

When can an insurer deny your claim or pay less?

A policy document always mentions the exclusions. But there is always a chance your policy might miss covering you against all possible losses, for example, due to depreciation or wear and tear of engine parts. But with a car subscription on Quiklyz, you only pay for how much you use and not the entire depreciation value with your monthly fee. 👍

However, it’s important to know different situations when the insurer may turn down your claim.

Filing Wrong Insured Declared Value

When filling your insurance form, you are required to file an “Insured Declared Value” or IDV, which is the maximum your insurer will pay if your vehicle is damaged beyond repair or is stolen. So if your car cost is INR 7 lakh when you buy the policy, the maximum amount the insurer will disburse is INR 7 lakh.

But your insurer can deny your claim if you inflate the IDV since its true value can be figured through

• Manufacturer, make, and model of the car
• Date and city of registration
• Ownership details (personal or company-owned)
• Cubic capacity
• Ex-showroom price.

Deductibles

As the name suggests, “deductible” refers to an arrangement between the policyholder and the insurer, under which each pays a part of the claim.

Deductibles come in two types: compulsory and voluntary deductibles. Let us understand how each works to get an idea of how much the insurer will pay.

IRDAI regulations set the compulsory deductible at INR 1,000 for cars not exceeding 1500 cc, and INR 2,000 for those bigger than this. The premium amount is not impacted by compulsory deductible as it is calculated on the basis of factors such as IDV, make, and model.

People also often go for a voluntary deductible to lower their premiums. This means, when making a claim say after an accident, you pay part of the claim though you have insurance, and your insurer avoids paying that amount.

Depreciation

The value of your car reduces with each passing year.

Under India’s insurance guidelines, almost all parts of your car – including the paint, tyres, and airbags – undergo depreciation, from 5% (car age up to six months) to 50% (car age from four-five years). If it is older, the owner and insurer mutually decide the deprecation.

The insurance company will calculate the overall cost of damage and then deduct depreciation from the claim amount as per the age of the car.

Permanent Exclusions

Every insurance policy has a list of permanent exclusions – a list of situations not covered by a standard car insurance policy. This means the insurer will deny the claim if:

• The car was being used for illegal purposes when the damage occurred
• Damage occurred due to over-use
• Damage/loss caused by war, terror attacks etc.
• Damage caused when the person driving was under the influence of alcohol or drugs
• Damaged occurred when the car was used for any racing purpose
• The person didn’t have a valid license
• Damage occurred when car was driven by minor
• Damage occurred after the expiry of the policy

When we buy a car, the initial amount is only one of the many expenses waiting to be paid. Insurance too is vital since we ought to safeguard our car. But when you subscribe to a car on Quiklyz, we take care of all of this for you. Quiklyz Insurance includes third-party cover, own damage cover, nil depreciation and consumables, giving you adequate protection wherever you go. Along with insurance, your monthly fee includes maintenance costs and service charges, too, so you can enjoy your brand new car without a worry! 😱