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Automobile Insurance - FAQ


This is a discussion on Automobile Insurance - FAQwithin Indian Car Loans & Insurance, part of theTeam-BHP Reviews category; AUTOMOBILEINSURANCE: FREQUENTLY ASKED QUESTIONS DearTeam BHPians, These are some of the FAQ whichhave been created by (me) ...

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12th March 2010, 10:51 #1

rjvora_2000Senior - BHPian

Join Date: Mar 2008Location: Mumbai/MulundPosts: 1,649Thanked: 23 Times


AUTOMOBILE INSURANCE: FREQUENTLY ASKEDQUESTIONS

Dear Team BHPians,

These are some of the FAQ which have been created by (me)Mr. Rupesh Vora - rjvora_2000 and Mr. Imran Jeddy - bblost.

Thank you for your support the entire T-Bhp Moderator team.

Q. What are the quick points that I need to check in myVehicle Insurance Policy?A. All the information must match with your details in RC book

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including CC, make model, sub type, fuel type, seating capacity(very important) etc.

Q. What are the points that I need to check in the renewalnotice?A. IDV is reduced by a minimum of 10% from last year, Vehicle Registration No. is correct; Premium is less than the last year (If you have not made anyclaim.) NCB (If applicable) is more than last year’s NCB. (Maximum50%)Sometimes the Third Party insurance premium may get revised.This is very rare and it may cause the premium to go up.

Q: What are the factors that one should consider beforeselecting an insurance company?A: Ideally the company that has a cashless tie-up with thewidest network of service stations that you may visit in case ofan accident. Secondly, the company which offers you the bestrate without any excess on it. Above all, choose a company thathas a good and fastest claim settling ratio and record.

Q. Why two insurance company’s premiums are notsame?A. All the companies offer 1. Different discounts, 2. DifferentP.A. cover and 3. Different IDV. It is the reason of difference inpremium amounts for all the insurance companies. 1. Different discount: - This mainly depends upon the claimsexperience of a particular company. If claims experience is goodthen they will offer higher discount and if claims experience isbad then less discounts are offered.2. PA (Personal Accident): - PA cover premium will not differfrom company to company but it is an optional cover you needto choose the amount how much you want to cover. Eg. Onecompany will offer Rs. 100 as a premium and other company willoffer Rs. 250 as a premium.3. IDV: - Major factor influencing will be IDV. But be verycareful, many companies reduce IDV a lot, reduced IDV meansyour premium will be reduced. Most important point here is atthe time of claim insurance company will also have to pay lessfor your vehicle. (It should be reduced every year by 10%minimum to 20% maximum.)Always keep your IDV on higher side, it helps1) During claims.2) At the time of selling car.

Q. What is NCB and how is it calculated?A: If you don’t make any insurance claim on your vehicle thenyou are eligible for a No Claim Bonus (NCB). This is a discounton your premium for the coming year and is calculates as under:-

1st year – 0% in Own Damage premium amount2nd year – 20% in Own Damage premium amount3rd year – 25% in Own Damage premium amount4th year – 35% in Own Damage premium amount5th year – 45% in Own Damage premium amount



6th year – 50% in Own Damage premium amount

Q. How is depreciation on the metal parts calculated?A. Depreciation on metal parts is calculated as under: -0 to 6th months – 0%7th month to 1st year – 5%1st year to 2nd year – 10%2nd year to 3rd year – 15%3rd year to 4th year – 25%4th year to 5th year – 35%5th year to 10th year – 40%More than 10 year – 50%

Q. What is Excess? Is Excess good or bad?A. Excess means the amount that will be deducted by theinsurance company before making the payment to insured.There are two types of excesses. First one is compulsory whichdepends upon the C.C. (cubic capacity) of the vehicle and whichcannot be removed from insurance policy. The second is avoluntary excess, which is given to you for reducing thepremium in the policy. This is not a recommended option toavail, since it reduces the insurance claim payout if its needed.Never agree for higher excess.

Q. What is covered under own car damage?A. Vehicle replacement cost or Vehicle repairing cost is paid ifyou have opted for this cover in your policy.

Q. When should a vehicle be scrapped (Under total loss)?A. In case of an accident where the repair cost is more than75% of car value (IDV), then insurance company will scrap thevehicle and pay the insurer the entire value of the vehicle.

Q. When do insurance companies not pay the full IDV?A. If you have not reduced the car value every year minimum by10% from last year’s IDV, then your insurance company will notpay the IDV. If you have increased the car value without anyvalid reason than also insurance company will not pay the entireIDV.

Q. What is covered under third party insurance?A. In case of an accident, third party property damage and thirdparty life damage is compensated.

Q. If third party vehicle is smashed beyond repair what ismy liability?A. Nothing. If you have valid insurance documents then entireloss is paid by insurance company and you don’t have to spend asingle penny from your pocket.

Q. Is the dispute between the insurance company andothers, Am I a party to the dispute? A. No. once you handover the court case and papers toinsurance company then they take over the case. You mayhowever need to go once to court.

Q. If the fault is completely mine and I also agree to



same, does my liability change?A. No, not at all. The premium you pay covers for potentialmistakes on your side.

Q. Is the dispute between the insurance company andothers, Am I a party to the dispute?A. No. once you handover the court case and papers toinsurance company then they take over the case and you don’thave to visit court or to do anything.

Q. In case of physical injury or death of passengers in myvehicle, are the medical expenses covered? Is there aspecial type of insurance cover?A. Under third party cover there is a clause called UnnamedPassenger PA (personal accident) cover. If you have opted forthis cover (which is available on extra premium of maximum Rs.100/- per person for a coverage of Rs. 2,00,000/-) then there iscompensation payable to the family members in case of death.There is no cost of medical bills or any expenses payable to theinjured passengers. Currently there are no options (products) forgetting this covered through vehicle insurance.

Q. Are third party medical expenses covered? Is there aspecial type of insurance cover?A. Yes. The entire expenses are paid under TP(Third Party)policy, if there is a police case, you don’t have to opt for anyspecial policy. Unlimited medical expenses are paid under TPpolicy.

Q. In case of theft, how much will the insurancecompanies pay?A. Entire IDV minus excess is paid.

Q. What is the reason for not paying the entire IDV underinsurance policy, if vehicle is stolen?A. If you have not reduced the car value every year minimum by10% from last year’s IDV, then your insurance company will notpay the IDV. If you have increased the car value without anyvalid reason, then also insurance company will not pay the entireIDV.

Q. Do I lose my NCB in case of theft of my car?A. Yes. If there is a theft and you make a claim, you lose theNCB.

Q. How much time does it take to settle my claim, undertheft insurance?A. There are lots of documents which have to be submitted incase of theft insurance. (Approximately number = 18). Postsubmission of all those documents, you will be required tosubmit a "Final Investigation Report (FIR)". This is usually issuedby/from police station after approx 3 months of the theft. Theclaim is paid one month after the submission of the FIR.

Q. My Insurance has expired yesterday is there a graceperiod after last date for renewal withoutinspection/penalty



A. There is no grace period in comprehensive insurance. TheNCB savings will elapse after 3 months.

Q. Can I renew my insurance without an inspection?A. For third party it does not matter. But it’s mandatory forcomprehensive insurance.

Q. Can NCB be transferred if I change my insurancecompany?A. Yes. Your car carries the NCB; every company has to acceptit.

Q. What is the procedure to transfer my existing NCB tonew car insurance?A. When you sell your car, you have to submit Form 29 & 30 toinsurance company, which has information about buyer andseller including their signatures. This verifies that you have soldyour car. Company then issues a No Claim Bonus Certificatewhich can be used on your new car.

Q. Can this be still done if I wish to retain my old car?A. NO

Q. Is an FIR required when I make a claim for a repair?(Given there are not legal issue with the damage)A. It depends on a case to case basis. If a tree fell on the carand destroyed it, you can get full IDV back without an FIR.

Please post your questions in https://www.team-bhp.com/forum/india...ce-ask-me.html

Last edited by bblost : 24th March 2010 at 13:11. Reason: Added url to theAsk ME Thread.

12th March 2010, 13:09 #2

nairanupgBHPian

Join Date: Nov 2009Location:Thane,Mumbai,A'bad,CherthalaPosts: 116Thanked: 4 Times

Thanks a lot for all the valuable inputs you have been providingme.I have been glued to all your comments and titibits since the lastcouple of months when i decided to go in for a new car. andyou have been instrumental in me looking for an insurance

provider other than icici or reliance too.

Thanks a ton and keep up the spirits

12th March 2010, 16:26 #3

(19) Thanks

(1) Thanks

http://www.team-bhp.com/forum/members/nairanupg.html



S5157BHPian

Join Date: Sep 2009Location: Muvattupuzha, KLPosts: 202Thanked: 70 Times

Excellent and Valuable information in one page.I infact compiledand kept information scattered on a diffrent thread by Rupesh asa guide before going for the next renewal

Thanks Guys.

12th March 2010, 18:58 #4

SPIKE ARRESTORSenior - BHPian

Join Date: Nov 2009Location: DeutschlandPosts: 2,604Thanked: 600 Times

Very comprehensive and well compiled,

Spike

P.S. Does FIR mean "Final Investigation Report" as mentioned

by you or First Information Report?

12th March 2010, 21:11 #5

alstonvazBHPian

Join Date: Oct 2007Location: MH12/GA06Posts: 57Thanked: Once

Excellent! Its like reading the terms and conditions of yourinsurance policy in simple understandable language.

13th March 2010, 09:21 #6

rjvora_2000Senior - BHPian

Join Date: Mar 2008Location: Mumbai/Mulund

Thank you every one for your kind comments.

@alstonvaz - That's the perpose. "To makes things simple forthem who can not understand the complicated"

@SPIKE ARRESTOR - FIR means both "First InvestigationReport" as well as "Final Investigation Report". It is important

http://www.team-bhp.com/forum/members/s5157.html

http://www.team-bhp.com/forum/members/spike+arrestor.html

http://www.team-bhp.com/forum/members/alstonvaz.html

http://www.team-bhp.com/forum/members/rjvora_2000.html



Posts: 1,649Thanked: 23 Times

where you are using this term?, how you are using this term?

17th March 2010, 12:25 #7

mac187BHPian

Join Date: Apr 2009Location: BangalorePosts: 492Thanked: 256 Times

Quote:

Originally Posted by rjvora_2000 AUTOMOBILE INSURANCE: FREQUENTLY ASKED

QUESTIONS

Q. In case of physical injury or death ofpassengers in my vehicle, are the medicalexpenses covered? Is there a special type ofinsurance cover?A. Under third party cover there is a clause calledUnnamed Passenger PA (personal accident) cover. If youhave opted for this cover (which is available on extrapremium of maximum Rs. 100/- per person for acoverage of Rs. 2,00,000/-) then there is compensationpayable to the family members in case of death. There isno cost of medical bills or any expenses payable to theinjured passengers. Currently there are no options(products) for getting this covered through vehicleinsurance.

Rupesh: First, very comprehensive article. Many thanks. I wouldlike to add one point here. If i understood it correctly, youmentioned in Q16 answer that currently there are no companiesoffering coverage for medical bills during accident.

Bharti AXA General Insurance has recently introduced the same.As a additional product where it covers;

1. Hospital Cash Cover - Rs.1000 for 30 days2. Ambulance Charges cover - Rs.50003. Medical Expenses reimbursement cover - Rs.10,000/ person

I can share more details, as i work for the company. I can mailbrochure if required.

Mods: I work in corporate marketing team of Bharti AXA GeneralInsurance. I have no direct benefit in this. I am just sharinginformation.

Attached Files

Motor Add on.pdf (186.3 KB, 823 views)

(1) Thanks

http://www.team-bhp.com/forum/members/mac187.html



23rd March 2010, 12:58 #8

TwinyBHPian

Join Date: Dec 2009Location: Cochin-BangalorePosts: 266Thanked: 34 Times

View My Garage

Infractions: 0/1 (5)

Very much handy, I was looking for the NCB % year wise ThanksRupesh

24th March 2010, 10:45 #9

aniketiBHPian

Join Date: Sep 2009Location: PunePosts: 958Thanked: 299 Times

@Rupesh,

Thanks a lot for the info mate. It was indeed useful. I have few

queries in mind if anybody can clarify

1 If my car is down or met an accident outside city & i have totow it back to garage, will i get towing charges also fromInsurance company? 2 Will i get back 100 % for my glass parts (front or rear glass,windows, indicators, front lamps etc) and rubber parts ?3 How many days it should ideally take once you submit bills tothe insurance company? for Cashless, what i have to do? 4 How much money i will get back in case of denting & paintingwork? 100% ? 5 Last but not least, which is the best Insurance company withless hassles & pain? I have to renew my insurance for my Dezirevery soon. How can i negotiate with them for best deal?

20th July 2010, 01:00 #10

guptavisBHPian Join Date: Jun 2010Location: chandigarhPosts: 248Thanked: 9 Times

Quote:

Originally Posted by rjvora_2000 AUTOMOBILE INSURANCE: FREQUENTLY ASKED

QUESTIONS

http://www.team-bhp.com/forum/members/twiny.html

http://www.team-bhp.com/forum/members/aniketi.html

http://www.team-bhp.com/forum/members/guptavis.html



Q. What is the procedure to transfer my existingNCB to new car insurance?A. When you sell your car, you have to submit Form 29& 30 to insurance company, which has information aboutbuyer and seller including their signatures. This verifiesthat you have sold your car. Company then issues a NoClaim Bonus Certificate which can be used on your newcar.

Q. Can this be still done if I wish to retain my oldcar?A. NO

Hello Rupesh and Imran,

Is this a new development?I remember we got our 8 year NCB transferred to the new NHCwe bought in 2006. We had to get some sort of affidavit fromthe insurer that NCB was discontinued on the old car, and wastransferred to new car. We kept the old car and got it insuredwithout any NCB that year. And the new car got 50% NCB.

19th October 2010, 17:07 #11

spadixSenior - BHPian

Join Date: Oct 2007Location: GurgaonPosts: 1,018Thanked: 179 Times

This is an excellent one-stop resource for all insurance-relatedqueries. Thanks a lot to everyone who's put in their efforts tocreate (and maintain) this!

I have one question on the quoted (below) point -

Quote:

Originally Posted by rjvora_2000 Q. What are the quick points that I need to checkin my Vehicle Insurance Policy?A. All the information must match with your details in RCbook including CC, make model, sub type, fuel type,seating capacity (very important) etc.

Across all of my identity cards my name is listed in full as<Firstname> <Lastname>. However for some reason the RTOhas recorded my name on the vehicle's RC as <Firstinitial><Lastname>.

Is this OK for insurance claim purposes? Will they disallow anyclaims saying that the name (on the insurance certificate/RC)doesn't match with, say, the name on the DL? Should Iproactively approach RTO to reissue the RC with the properlyexpanded name?

Thanks a lot in advance!

http://www.team-bhp.com/forum/members/spadix.html



Regards,spadix

28th January 2011, 19:31 #12

arun_kunBHPian

Join Date: Jan 2011Location: SingaporePosts: 116Thanked: 45 Times

Re: Automobile Insurance - FAQ

Hi Rupeesh,

I have my insurance for renewal for this feb end. I did claim anyinsurance in the first year. How do i claim NCB and how much ican claim NCB. I have insured with kotak. Do you suggest me tochange to any other insurer. Please advice.

Thanks in advance.

14th February 2011, 20:04 #13

recker_usBHPian Join Date: Oct 2008Location: BangalorePosts: 178Thanked: 18 Times

How to transfer NCB to new vehicle while retaining the old one

Hi,I have an old Alto with 45% NCB where I pay a paltry 2xxx forcomprehensive insurance. I am planning to buy a new Safarinow but want to retain the Alto for few more months?

Is it possible to use the NCB for the New vehicle and getsubstantial savings on the insurance? I know its technically notpossible. But, I am ready to buy a new insurance for the OldAlto. It might cost around 4k for a new insurance on Alto. Buttransfering NCB to Safari would save atleast Rs. 10000 everyyear.

Thanks,JP

14th February 2011, 22:57 #14

guptavisBHPian Join Date: Jun 2010Location: chandigarhPosts: 248Thanked: 9 Times

Re: How to transfer NCB to new vehicle while retaining the old one

Quote:

Originally Posted by recker_us Hi,Is it possible to use the NCB for the New vehicle and getsubstantial savings on the insurance? I know itstechnically not possible. But, I am ready to buy a newinsurance for the Old Alto. It might cost around 4k for anew insurance on Alto. But transfering NCB to Safariwould save atleast Rs. 10000 every year.

http://www.team-bhp.com/forum/members/arun_kun.html

http://www.team-bhp.com/forum/members/recker_us.html

http://www.team-bhp.com/forum/members/guptavis.html



Did the same thing our old M800 was insured with new indiaassurance and the new NHC was insured with Bajaj Allianz. TheBajaj allianz person from honda dealership suggested the ideaand got the formalities done. Ask the Insurance guy at yourTATA dealership.

28th March 2011, 19:37 #15

NevGinBHPian Join Date: May 2009Location: BombayPosts: 353Thanked: 92 Times

Re: Automobile Insurance - FAQ

My car met with an accident. Bus braked hard, WagonR behind itdid the same, my car hit the WagonR from behind. Car has beengiven for repairs under insurance. Person driving WagonR sayshe does not want to disturb his NCB and wants us tocompensate him. FIR was not filed. This happened 5 days back.

My questiona:

1. Can FIR be filed now?2. Lets assume for a moment that he finally claims from his owninsurance. The balance amount that his insurance does not payhim can be recovered from my insurance through third partyclaim. What is my involvement in this process?

Any help will be highly appreciated.Thanks

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