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Is Motor Insurance in India Really Needed or Beneficial?

Insurance is like an investment for the future or when suddenly an unforeseen situation arises. Bad incidents can happen any time and it is not necessary that we would be prepared for it every time, and this is the reason the Indian government has made insurance mandatory for every citizen. This insurance money can be used by the individuals whenever any bad incident occurs.

Motor insurance is one such scheme that has been implemented by the government of India under which it is mandatory to take insurance in the name of vehicle. However, many people have always asked whether it is really useful or not, and today we will discuss the same.

Legal liability is covered towards third parties

When we are traveling in our vehicles, there are chances of mishaps and if the mistake is made by us, then it becomes our liability to take the expense of the other party involved in the accident. In this case, only a car or motor insurance can help you as it will take care of the expenses incurred in the accident.

Damage of your vehicle is covered

Now, when your vehicle is involved in an accident, then there will be damages to your car and suddenly if you get big bills, it may become a big burden. During this time, your car insurance will come as a savior because all the expenses on your car repair will be taken care by it.

Motor insurance covers damages that have occurred during fire, explosion, case of burglary, riot or strike, earthquake, terrorist attack or in transit. However, there are many cases when insurance does not cover the damages like normal wear and tear, vehicle damaged while driven under the influence of alcohol or drugs, if vehicle is driven without a driving license, if the private vehicle is used for commercial use, damages that have occurred during any kind of race, etc.

Today, even if you are buying any used vehicles, you should check for the insurance to know if the vehicle was ever indulged in any accidents. However, it is not easy to choose the right kind of car insurance online as there are many companies providing the same. So, before selecting any policy, you need to read the complete terms and conditions to ensure that it is beneficial for you. There have been many incidents reported where the insurance was taken without reading the conditions and when people went for claims, they were not satisfied with the policy as it had not covered those expenses.

5 ways to reduce your car insurance premium

There are a lot of changes happening in the insurance industry these days. Insurance companies are crunching a lot of historical data and coming out with policies or strategies to benefit good customer set. These are based on new parameters that they have found to behave better overall. As a normal policy owner/renewer , it will be good if you know them well to take advantage of these.

1) Voluntary deductibles : This means that customer opts out of minor claims. This essentially says that customer is willing to get minor claims settled by his own, without bothering the insurance agency. When this happens, Insurance agency will be more than willing to give him/her additional discounts. It does so, because a lot of costs overheads are saved, if minor claims are not managed by it.

2) Safety Features : Most of us do not put emphasis on safety features which are installed in your vehicle, while declaring for insurance. This results in the normal premium changes for insurance. If you can declare anti-theft device, and other safety features, which you feel are resulting in reducing the probability loss or accident, for example air-bags, then upto 5% additional premium can be lowered by the insurance companies.

3) Automobile association : Membership of automobile associations indicates that the owner is interested and knows well about automobiles. This gives the insurers additional comfort about the well being of vehicles, in that owner’s hands. Hence, for such customers, they are open to reducing the premium on “own damage”. This clause is often not used by general public and you should enquire about it with your insurers.

4) Buy/express interest online. – When you express your interest online for insurance, you reduce the insurer’s cost of reaching out to you. This is applicable even when the actual purchase is not online, but just the intent is expressed and the closure happens only after you meet the insurance agent in person. Hence it can be the best of both world, you can grill the insurance agent with your queries, and still take advantage of the savings done by the insurance firm.

5)  No claim bonus : This is one of the most obvious methods of reducing your insurance premiums. This also has been covered extensively in our articles. You can read about it in complete detail by surfing the links below.

Apart from these big 5 headers, there are also sections like make and model of the vehicle, driver’s age and profession, city of vehicle registration etc. All of these goes a long way in ensuring that you get the cheapest rates available for your car or motor insurance premium.