Even though car insurance costs a fair amount most people treat them as a necessary evil and do not bother to really find out what the policy covers.
This is mainly because people assume all policies to be the same and they are reluctant to read the complicated language of the policies.
However, in a competitive world, insurers differentiate their products in many ways by building in useful features, but these are largely not availed as customers are usually not aware of them.
Some of the lesser-known but significant policy benefits:
Coverage beyond Accidents
Most car owners think that they can file claims against their insurance policies only if the car has been involved in an accident due to someone else’s fault. However, not only can you file a claim even if the accident is due to your own mistake but also if your car has been damaged due to any event over which you have no control. These include natural disasters such as earthquakes, floods, fires, landslides, lightning strikes besides manmade events like theft, burglary, transit damage, etc.; however, many policies specifically exclude damage due to events like acts of war and terrorism. The coverage of commercial motor insurance is quite different since it needs to take into account the extra hazards that the vehicles face when used for commercial purposes.
Waiver for Towing Fee
If due to an accident, you find yourself stranded on the road and need to get your car towed to the nearest workshop capable of repairing your car,the towing charge can often be pretty steep. Every policy allows you to claim up to a certain amount as a towing charge in addition to the actual repair cost. The number of times in a year that you can claim this towing charge is not limited – only the overall limit of a specified amount is fixed per annum. You do not have to ask for this feature to be included in your policy; every time you renew the policy it is automatically included. Further, almost every insurance company provides roadside assistance to its customers too, but it could be an add-on at a separate cost.
Document-Free Policy Renewal
Even though the insurance policy itself is a very complicated legal document, and needs a few supporting documents when it is issued the first time, renewals can be done completely hassle-free. As long as you can provide the current policy details, the renewal can be done seamlessly either by an agent across the table or online at your own convenience. Even if the policy is being renewed with a different insurance company, providing only the current policy number is sufficient for the renewal and also allows you to enjoy the benefit of the no-claim bonus, if applicable, without any documentation whatsoever.
Lowering of the Insurance Premium with Higher Voluntary Deductible
A typical motor car insurance cover in India has two major components. One is third party premium that the insurance company charges to protect you from claims made by third parties who have suffered a loss due to your vehicle having met with an accident. This insurance cover is mandatory and no car is allowed on the roads without having third-party insurance. The other component of the insurance policy is the own damage cover, which is the cover available to you to protect your vehicle against damage from accidents, and natural or manmade disasters, including theft. The cost of this cover depends on the insured value of your vehicle but you can choose to get it lowered by agreeing to pay a higher voluntary deductible amount. This means that if you file an insurance claim, the insurance company will reimburse you the cost of the allowable claim less the amount of voluntary deductible agreed by you. The higher the deductible is the lower your premium.
Zero-Depreciation Insurance Cover
Since the value of the car goes down with age, insurance companies also take the age of the vehicle into account when calculating the amount they will pay for parts that have been damaged and need to be replaced. Any difference between what the insurance covers and the actual cost of the new part has to be borne by the customer. However, by taking out a zero-depreciation cover, usually available with all insurance companies as add-on at an extra cost, you can avoid being affected by depreciation of your car.
Because there are so many facilities and features that insurance companies offer with their policies, it is best to read the promotional literature to get familiar with the coverage. If you are hard-pressed for time, your insurance agent is the best person to ask for help.