Why Your Second Vehicle Needs Insurance Too

Insurance companies often come across instances of second hand car insurance claims, where the new owner claims for damages to the vehicle without having transferred the insurance policy in his name after the purchase. The claim however is not admissible in the absence of a valid contract between the insurance company and the new owner of the vehicle. In a recent case, the Pune Consumer Court ruled in favour of the insurance company and upheld the insurer's decision of not paying the claim to a second hand vehicle owner since he had not transferred the insurance policy to his name. The Court ruled that an insurance policy is a contract between a policy holder and an insurer. In the absence of the new vehicle owner's name on the motor insurance policy, there exists no valid contract between him and the insurance company. Hence any accidental damage suffered by the new owner is not admissible under the previous policy.

Owing to low awareness on insurance amongst the general public instances of post loss insurance grievances in such scenarios are common place in India. Hence it is important for individuals who have purchased or are looking at buying a second hand vehicle, to know that transfer of insurance is an equally critical aspect of the buying process and should not be ignored or procrastinated. Also, the individuals who sell their vehicle have an equal responsibility to ensure that the insurance is transferred in the new owners name to avoid any legal hassles that may arise in the future. Here we shall explain how not transferring of insurance will impact both the buyer and the seller of the motor vehicle. We shall also demystify for you the procedure of ensuring a seamless insurance transfer.

To begin with it is important to understand the structure of a motor insurance policy. A comprehensive motor insurance policy comprises of two parts - Own Damage (OD) and Third Party (TP). Whereas TP section covers damages caused by your vehicle to a third person and are mandated by law, OD section covers damages caused to your vehicle owing to any accidental mishap. After purchasing a used car, Section 157 of the Motor Vehicle Act casts a duty on the new vehicle owner to get the insurance policy transferred in his name by applying to the insurance company within the first 14 days. For these 14 days, only the "Third Party" section of the insurance policy gets automatically transferred. However, it does not apply to the Own Damage section of the policy. The "Own Damage" section will be transferred only after the insurance policy gets registered under the new owner's name. Post this 14 day period, if the new owner fails to get the insurance policy transferred in his/her name the insurance company is not liable to bear any losses incurred by new owner in either of the TP/OD sections.

If the insurance is not transferred and the policy still bears the name of the first owner, in case of an accident the claim for damages to the vehicle or third party will not be paid by the insurance company. Moreover, the court may also send the first owner a notice to compensate for the loss caused to a third party, for an accident caused by the new owner. The whole process of establishing the proofs of sale, the transfer of vehicle RC etc. by the previous owner can be a grueling exercise. This can be easily avoided if both as a seller and a buyer of a second hand vehicle, one insists on getting the insurance policy transferred to the new owner's name immediately after the sale deed is finalized.

Some ways to reduce Motor insurance Premium

While choosing a motor insurance policy one should be aware that your policy has two components – own damage and third party damages. Your premium will be based on these two components of the insurance cover. People look to save money on the insurance premium. Those who wish to lower their premium should understand that only the own damage premium part is under your control and third party premium is prefixed by the regulator so it’s same for all plans by various insurance providers.

The article gives some tips to control the costs you pay for your own damage motor insurance:

No Claim Bonus – Every time you complete your car insurance year without a single claim you’re rewarded with No Claim Bonus points. You can redeem the points against the claim amount or premium reduction. So check and see if you can avail of this benefit. If yes, then the discount will be deducted from your premium and you have to pay less for the current year. It is advisable, don’t claim for petty scratches or dent. Instead, accumulate your bonus points and go for higher claim or discounts. The other way to keep your NCB intact would be applying for add on cover for NCB protection. Though you may need to pay a bit extra on your premium but it is always a valuable protection. It helps to reinstate your NCB to a certain measure.

Garage Repair – Every motor insurance company has its own network of garages where you can avail cashless repairs. Network garage offer services at cheaper rates compared to your local shop. These deals are 20% lower compared to a local garage. A lower cost of repair means a lower depreciating value of your car or bike. Taking your motor to a network garage helps you get a negotiated deal on repair costs.

Long-Term insurance policy - Keeping in mind the huge growth opportunities and high FDI flow, the government has decided to boost the two-wheeler insurance segment. They have launched the first three-year comprehensive cover for scooters and motorcycles. The comprehensive cover is 30 percent cheaper than buying annual policies and comes with lucrative offers for the buyers. The best part of a long term policy is that the third party insurance premium and the service tax hikes would not affect the premium of the policy.

Voluntary Deductible – A voluntary deductible means you will have to pay a part of the claim whenever the situation of claim arises. The part of the claim you promise to pay decides the costs of the premium for the rest of the cover. If you opt for this option it will help you lower the premium rate.

It is advisable, if they are small dents or scratches don’t make a claim. It will affect your no claim bonus in the long run and you won’t be able to reduce the premium or make higher claims. Prudent and smart strategies will always help you to keep the premium lower so it proves easier on your pocket.

Online comparison always helps to get better motor insurance deals. You can get multiple quotes from a single window. Based on the comparison of policy in terms of benefits & features, discounts, claim settlement ratio, etc. you can choose the one that fits your needs and budget.

Why car insurance policy is so important in India?

An importance of car insurance is felt the most when you're at a workshop, getting your car repair because of an accident or at the police station when it gets stolen. In both cases, a proper insurance cover would have helped you come out of the financial crisis due to such unforeseen events. Insurance cover helps individual to take care of financial crisis if there is any damage done to your car due to the accident, fire, theft, or other natural perils else if it gets stolen.

In India, there are two types of cover - third party & comprehensive cover. A third party insurance cover takes care of the damage done to the third party in terms of property or health loss, a comprehensive cover will take care of the damage done to both party i.e. third party damage and your car damage or injury. Standard car insurance will reimburse your loss; however, if you still feel the pinch in your pockets then there are add-on covers that come into the picture.

All general insurance companies offer a range of optional cover that gives additional protection to your car along with the base car coverage. So, here are some tips to consider about different types of add-on covers and how useful they prove to provide that extra financial cover for your car.

Road Assistance Cover

It proves a very useful cover, especially when your car runs out of fuel, gets a flat tyre or break down due to any reason. The insurance company will arrange for fuel refilling, change the flat tyre or get it towed to nearest workshop.

Zero depreciation

A standard car insurance policy will reimburse the depreciating value of the car parts damaged during an accident. The insurer will deduct the depreciated value from the claim. Although it may not be a problem for low priced cars the high-end cars will go for a toss. This is where zero depreciation comes into the action. A zero depreciation add-on cover will reimburse the full value of the part. Bear in mind that if you have made a car cover claim in the past few years, zero depreciation cover doesn’t make sense.

Engine Protect

When you read fine prints carefully of any car insurance policy, you will discover that own damage doesn’t include damage caused to the engine because of any negligence of wear and tear. Suppose there is car standing in a water-logged area and you turn on the ignition, chances would be the engine gets damaged or if your run car without engine oil, it will damage your engine. At this point for such careless mistakes, it's an engine protect add-on cover that comes to savior for the people. It covers engine damage not caused by an accident. Insurer expert suggests it's worth buying it as the cost of repairing the engine can be quite high.

Consumable Cover

After an accident, car repair takes up a lot of consumable like engine oil, brake settings, fluids, coolants, minor nuts & bolts. These small expenses can push your bill quite significantly. A consumable cover will help you keep the expense under control and pay up for the costs.

Accidental cover

An accidental cover provides compensation to the passengers in case of death or permanent disability caused due to an accident. The coverage amount varies across insurers. You can call up the customer service team of the relevant insurer and get things clarified before including this add-on in your car insurance policy.

How to effectively administer your Company’s Corporate Motor Insurance Scheme

When you are not primarily an insurance company, administering a corporate motor insurance scheme can be a very serious challenge. This becomes even harder if you have a large fleet of company cars, in addition to a staff motor insurance scheme mediated by the company. Insurance, especially when handling claims, can be such a hustle for someone who is primarily in Administration, Finance, Procurement, or HR, depending on the company. We have prepare a small cheat sheet that can help you to take charge of your company’s motor Insurance Scheme and give you that satisfaction of being “on top of things” Here is the list

1. Take Charge!

The number one cause of stress for employees who manage motor vehicle insurance issues is lack of clarity on who is in charge of what. The process of coordinating motor insurance concerns usually involves at least all the departments we listed above, and depending on the organization, the person who is in charge may be in any one these departments. If you are involved in the process but it is unclear who exactly is in charge, then you have two options. First, you can decide to seek clarity from your boss as to where the buck stops when it comes to the company’s motor insurance scheme. If your boss doesn’t know, you may be in trouble, but work towards clarifying who is in charge of it. The second option is to take charge. Many workers fear additional responsibilities and then go ahead to waste good energy scheming how to avoid the work. If you take charge of it, officially or otherwise, you will have control over it and it will make it easier to administer the scheme.

2. Draw a Map

Secondly, draw a process map that shows how each process should be handled. If you are not into maps, you can use a list showing all steps each case goes thorough before it is resolved. Process maps (or their equivalent) can help you to

Figure out what needs to happen at every stage and are a good way of measuring your progress down the line. The only predictable thing when it comes to insurance is when you need to pay your premiums. You can never plan when to make claims because they result from accidental events. A process map will make you ready to handle any unforeseen situation with clarity, and without the need to figure out everything each time something happens.

3. Use Checklists

The beauty of everything in insurance is that the processes used by insurance companies are very well mapped out. It is possible to develop checklists to help you handle every claims process, or every motor insurance procurement process. Checklists will help you to be certain that you have done everything required, and you will not need to spend time thinking through every process you need handle. For instance, you may have all the documents needed to file an application for motor insurance cover committed to memory. If you do not translate that to a checklist, you may miss one of the important documents simply because you have no method of verifying that you have filed all documents. Then again, since you don’t fill these forms on a daily basis, it is easy to forget a small detail in the forms. A checklist will eliminate all the stress you may experience in such situations.

4. Keep all Relevant Documents at Hand

This tip is almost a no brainer, but most people simply assume that they have access to everything they need. Imagine you are applying for motor insurance for company cars, or your company has hired a new manager who is supposed to be enjoined in your company’s motor insurance scheme. Would you prefer to go searching for the proposal forms in last year’s emails or would you prefer getting the forms from a folder on your computer called, “Insurance forms”? Collect all relevant documents and keep them in a folder that is easily accessible so that you save the time you otherwise will spend trying to locate important documents. At the risk of being repetitive, it should be noted that accidents do not follow a schedule, and hence you need to have everything at hand in anticipation for any eventualities.

5. Use Productivity Tools Such as Online Quote Form

If you are charged with procuring insurance for new employees, you will benefit a lot from productivity tools that make it easier for you to get the job done. For instance, you can easily get insurance quotes from several insurance companies in Kenya by simply filling the auto insurance quote. The form will make it possible for you to compare quotes in real time, and will make it easy to submit your contact details to an insurance company of your choice. From then on, the motor insurance company will get in touch with you to process your application. Using such productivity tools can drastically ease the entire work of administering your company’s motor insurance scheme.

6. Build a Relationship with your Insurance Agent

Another tip that you can use to make it easy for you to administer your motor insurance scheme is to forge a strong relationship with your insurance agent. Your agent can help you to hasten the processing of your applications and your claims. Just get in touch periodically whether you have any needs or not. Send thank you messages, share calendars and jokes, and generally show concern for them. When the inevitable happens, you will have an ally. 

7. Educate your Staff

The final tip we have is for you to educate you staff in insurance matters. Make a point of raising one motor insurance related issue with all members of staff at least once a week. Education in this case does not mean organizing training seminars to talk about motor insurance. What it means is that you empower your staff members to make smart choices around insurance issues. If they need your intervention less because you have empowered them, you will have succeeded in making you auto insurance scheme easier to administer. You can do this by sending then interesting articles on mail, sharing insurance resources, and having personal discussion on insurance with those who make queries.

[Source: http://www.insureafrika.com/car-insurance/basics/how-to-effectively-administer-your-companys-corporate-motor-insurance-scheme]

Why Should You Have Vehicle Insurance?

Factors to consider while deciding your car value

Protecting your car against damages due to traffic accidents, its liabilities like third party damages, own damage, damages due to natural or man-made incidence is termed as car insurance. An insurance policy also provides for accident cover of the policyholder while driving including the passengers. It also encompasses third party liability which is injury/death or property damage that the driver has to pay.

It’s a mandate by the government of India to buy a suitable car cover to driver your vehicle on road. Most insurance companies have a tie-up with the car dealers and they offer quotes along with the purchase value of the car. 

While deciding upon the cover value there are a lot of factors taken into consideration like car make and model, place of living, occupation, car parking area, security aspects, etc.

However one of the key factors is Insurer’s Declared Value (IDV). It is the sum of the value decided by the insurance firm after careful examination of the car. Not to be mistaken, it can’t be the exact purchase value of your car. Insurance company’s surveyor will go through the car inspection with company norms and quote a cover value to be offered to the insured person during a claim.

Some other factors deciding the value of the car insurance policy:

Age of the Car

As the car gets depreciated every year, the insurance value of the car will also reduce. Hence, during insurance renewal, you have to ensure that you have enough cover amount to bridge up the financial losses. 

Purpose

A self-driven vehicle used for the personal purpose will have lower premium compare to the ones used for business purposes.

Accidents

If the car and its driver are involved in frequent accidents in the past, the premium will higher. As the policies get renewed every year, any accident in this span will also result in a higher premiums rate.

Previously on public sector companies used to offer motor insurance but because of the entry of private sector insurance firms, there are varied innovative policies being sold in the markets. You can choose the policies as per your benefits and premium paying capacity. Also, online car insurance deals are quite exciting and come with loads of discounts with no involvement of agents.

As of now, car insurance sector is booming and companies are targeting the existing and potential customers with innovative policies. It is evolving and a lot of features are being introduced that will influence the premium each year.

The careful comparison is the key for a quality insurance product. You can compare policies in terms of benefits & features, discounts, premium cost, claim settlement, policy terms, and conditions, inclusion & exclusion, premium payment modes, etc. Once done you can narrow down the search to 3 to 4 good insurance policies and choose a particular one for your car. Also, ensure that you read terms and conditions, inclusion & exclusion well before you purchase the policy. At any point of time, if you doubt regarding the policy structure, call up the customer service team or visit online and have thorough chat to clear the clouds in your minds.

In case of policy lapse, your insurance provider gives a grace period of usually fortnight’s time. Post this period you might run the risk of driving a car without insurance. So, it's always better to renewal policy at least a month prior to ensure that you’re safely sheltered under suitable car insurance.  

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