A car insurance Policy covers the Risk from two perspectives, one is third party liability and the other is own damage coverage. Third Party Liability Insurance would protect you against any liability that may arise due to damage caused to others during an accident. If you own a car, taking insurance Coverage for third party liability is mandatory under law. The own damage coverage is optional and there are many factors that would govern the amount of Premium that you need to pay. The cost of third party coverage is nominal when compared to the cost of insurance for own damage. It is advisable that you buy a comprehensive motor insurance which provides protection for own damage as well as third party.
Third Party Liability Premium
The value of third party liability insurance coverage would largely depend on the size of your car as determined by the cubic capacity of the engine. No matter how old or new your car may be, it stands to be solely determined by the engine size.
Own Damage Cover Premium
When you buy a comprehensive motor insurance policy, the larger proportion of the premium that you would pay is attributable to cover for own damage. The most important factor that decides the premium for own damage is the insurance declared value of your car, popularly knows as IDV. IDV largely depends on two things - the purchase value of your car and the age of the car. The purchase value is the ex-showroom price and IDV is calculated by deducting the accumulated Depreciation from the purchase value. The amount of depreciation that one has to account for has to be in line with the schedule provided by the Indian Motor Tariff act. The depreciation schedule fixes the depreciation rates on the age of the car.
The premium that you pay also depends on where you drive your car or in other words where you basically stay. India is divided into two zones –
1) Zone A - Covers cities like Ahmedabad, Bengaluru, Delhi, Mumbai, Kolkata, Hyderabad and Pune.
2) Zone B - Rest of India.
Cars belonging to Zone A will carry a higher premium than cars belonging to Zone B.
Number of Claims and Claim Value
The premium that you would have to pay is likely to be higher if you have made a claim in the previous year, as against if you have not made a claim.
There are varieties of Riders that insurance companies offer and if you buy these riders, your insurance premium is likely to go up. The optional features that make your insurance expensive are: –
1) Coverage for lost key replacement
2) 24 x 7 spot assistance
3) Vehicle replacement advantage
4) Engine protection
5) Get full Reimbursement on depreciated parts at the time of claim settlement
6) Get reimbursement for repairing costs of items like tyres and batteries, which are normally not covered under a policy
Compare Car Insurance Online
A prudent way to buy insurance is to compare car insurance policies offered by different companies over insurance comparison websites such as easypolicy.com. This way you can choose the best insurance policy that offers you desired coverage at the lowest premium charges. Once you have zeroed in a policy you can buy online car insurance
from the convenience of your home.