Damage auto insurance is the extra layer of security that gives you the financial backing to get your car back in working order in the event of an accident. Although the law protects car owners with compulsory third-party insurance (TP), one could consider taking out damage insurance (OD) for additional protection.
Here’s how it works and why you should get it.
Automobile insurance coverage and exclusions in the event of personal damage
As the name suggests, personal damage coverage helps cover the cost of repairing your own vehicle when it is damaged. Damage caused by the following is all covered:
- Accidental damage: covers damage caused to your vehicle in the event of an accident.
- Vehicle theft.
- Damage to vehicles due to natural calamities like flood, cyclone, landslide, landslide, earthquake, etc.
- Fire and lightning damage.
- If there is damage while the vehicle is being transported by any mode i.e. road, rail, air.
- Damage due to man-made disasters such as riot, strike, malicious act, terrorism.
Key inclusions include the following:
- Accidents occurring outside the geographical limits defined in your policy will not be covered.
- If you drive without a valid driver’s license and have an accident, the claim will not be admissible.
- If you use your personal vehicle for commercial purposes, racing, speed trials, etc.
- No claim will be covered if you are caught driving under the influence of alcohol.
Difference between third-party auto insurance and personal injury auto insurance
The main differences between third party auto insurance and personal injury auto insurance can be categorized into areas of coverage, hardship, customization and validity.
Factors That Affect Personal Damage Automobile Insurance Premiums
- Insured Declared Value (IDV): IDV is the current market value of your car. This is the maximum amount the insurer will pay in the event of theft or irreparable damage to the vehicle. From the moment you buy your car, its value begins to depreciate; Insurance companies call it the depreciation rate. The insurance premium will be higher if your car has a higher IDV. As your car ages, the premium decreases.
- Car age: The age of the car is an important variable in assessing the amount of the premium. Newer cars, compared to older ones, have lower depreciation and higher IDV, which directly affects the insurance premium.
- Engine capacity of the car: Also called CC, it measures the size of your car’s engine. An engine with a displacement above 1500 will attract higher premiums than an engine with a lower CC (below 1500)
- Make / Model / Variant of the car: The premium is directly proportional to the risk. The risk of insuring high-end cars, diesel cars, theft-prone cars, etc. is higher than others, so your vehicle’s manufacturer, fuel type, engine displacement, etc. will have a direct impact on the car insurance premium.
- No Claim Bonus (NCB): The no-claims premium is a very important parameter to identify past claims experience and driving behavior. Many insurers offer higher premium discounts based on past claim-free periods according to the PNE.
- Location: The RTO (place of registration) of the vehicle also has an impact on the insurance premium. Few RTOs and locations have a higher risk based on past claims experiences, vehicle usage in high traffic areas, etc., due to which they attract a higher premium than other territories favorable.
- Use: Usage-based insurance is a trend that the auto insurance industry is witnessing. You can save on the premium depending on the quantity and quality of your ride. The less you drive and the better you drive, the less premium you pay and vice versa.
Ways to lower your own car insurance premium in the event of damage
If you opt for your own damage insurance policy for your car, there are a few helpful steps you can take to make sure it doesn’t pinch your pocket. These measures include:
- Increase voluntary deductibles – A deductible is a specified amount that the insured must bear at the time of a claim. By opting for a higher deductible, you benefit from a discount on your premium. It would be wise to pay a decent but considerable amount as this will reduce your premium proportionately.
- No Claim Bonus (NCB) – This is the discount you get on your premium at renewal if you don’t make a claim. Not claiming minor repairs will ensure that your NCB is intact and therefore your premium at renewal time will be lower. If you change OD insurance policies after completing the period of insurance, you must ensure that your PNE benefits are transferred to the new policy.
Personal injury insurance coverage application process
With the adoption of digital, claims are now becoming completely paperless. The entire process, from notification to the insurer to the final settlement of the claim, can be done digitally. Customers can also digitally track the status of their claims. For a smoother and faster claims experience, here’s what to keep in mind:
Things to do for faster claims processing
- Time is essential. Thus, the first step is to inform the insurer of the incident. This would allow the insurance company to act quickly and arrange vehicle inspection, damage settlement, investigation/fact finding in cases with gray areas and handle the claim accordingly .
- Some documents like claim form, vehicle registration certificate, driver’s license, workshop estimate, etc. as well as the KYC documents in the applicable cases, must be submitted to the insurers.
- Make a habit of keeping these documents accessible in digital form and, if possible, also keep a copy of these documents in your car.
- If possible, you should take photos of the damaged car on the spot, as this will represent critical evidence and could be shared with the insurer to support your insurance claim.
- As a car owner, you must provide details such as the policy number, date and time of the accident, location of the accident, a description of how the accident happened is produced, as well as the name of the driver of the vehicle. If the accident is reported to the police station, please report it. Also, if someone is injured or it is a fatal accident, immediately share the details with your insurer.
Don’ts for faster claims processing
- You should not hide any facts from the insurance company as once discovered it could result in the rejection of the claim
- You should never have the car repaired before you have had the vehicle inspected by the insurance company. Please use the workshops of your insurer’s network. These are the workshops approved by insurers for fast service and cashless convenience.
If you love your car, be sure to protect it. Some car owners are still unaware of the importance of stand-alone damage insurance and ignore it because it is not a requirement. What they need to understand is that spending a little more on OD insurance can potentially help protect them against the financial burden.
Moreover, buying the font digitally can prove to be much easier and convenient as one can get all the information about the available product options, prices, etc. whenever and wherever they want.