Vehicle insurance explained: Policies, limitations & claim procedures

It might not be the most exciting topic for automobile enthusiasts but understanding your options and limitations can save you a lot of trouble down the line.

BHPian arundeepbv recently shared this with other enthusiasts.

Hello, TeamBHPians! I've been scouring the forum for a dedicated thread on insurance but couldn't find one. So, I thought it would be beneficial to start a thread focusing on the different types of insurance available, potential add-ons, their limitations, and the claim process for those unfortunate incidents. After all, knowing how to navigate the claim process can make a potentially stressful situation much easier to handle. Let's get the conversation rolling!

Insurance is a topic that often takes the backseat but is essential for every vehicle owner—vehicle insurance in India. While we all love talking about horsepower, torque, and the latest gadgets, understanding insurance policies can save us from a lot of headaches in the long run. So, let's jump right in!

Types of Vehicle Insurance Available

Third-Party Liability Insurance

The most basic and legally mandated insurance in India, Third-Party Liability Insurance covers you against damages to another vehicle, property, or individual. However, it doesn't cover any damage to your vehicle.

Comprehensive Insurance

This package gives you broader coverage. It includes third-party liability and also covers damages to your vehicle caused by natural calamities, theft, fire, etc.

Add-ons and Special Policies

From Collision Coverage to Zero Depreciation and Engine Cover, there are various add-ons to make your policy more comprehensive. There are also specialized packages like Pay-as-You-Drive and Commercial Vehicle Insurance, catering to specific needs.

Understanding Liability Caps

Third-Party Liability

For bodily injuries or death in a third-party accident, there's no maximum limit for the payout. However, there is a cap for third-party property damage, often around 7.5 lakh INR.

What Happens When Damages Exceed the Cap?

If you're involved in an accident where the property damage exceeds your policy's cap, you're liable for the remaining amount. The property owner can even take legal action to recover this amount. Therefore, it's critical to understand the limitations of your policy.

Pro Tips for Extra Coverage

Some folks opt for additional "Umbrella Policies" or "Excess Liability Insurance" to safeguard against costs exceeding regular policy limits. While these are less common in India, they can provide an extra layer of protection.

The process of claiming insurance can vary depending on the insurance provider, the nature of the claim, and whether it's a third-party or comprehensive claim. Below is a general guideline on how each type is typically claimed.

Third-Party Insurance Claim:

• Report the Incident: The first step is to report the incident to the police and file an FIR (First Information Report).
• Inform the Insurance Provider: Notify your insurance company as soon as possible, providing details of the incident and the FIR.
• Collect Information: Gather information from the third party involved such as their name, contact information, and insurance details. Witnesses can also be helpful.
• Submit Documentation: Provide all necessary documents, such as the FIR, your policy details, and any other required forms, to the insurance company.
• Legal Process: In case of significant damages or injuries, the case might go to court. The insurance company will represent you.
• Claim Settlement: Once all formalities are complete and the claim is approved, the insurance company will settle the third-party's claims.

Comprehensive Insurance Claim:

• Assess Damages: Before anything else, assess the damages to your vehicle. If it's a minor issue, you might choose not to claim insurance at all.
• Contact Insurance Provider: Notify your insurance company of the incident. Many insurers have a 24/7 hotline for this purpose.
• File an FIR: In case of theft or significant damage, you might need to file an FIR.
• Documentation: Collect all necessary documents, such as photographs of the damage, repair bills, and submit them to the insurance company.
• Survey and Verification: A surveyor from the insurance company may inspect the damages to the vehicle and verify your claims.
• Claim Approval and Settlement: After successful verification, the claim is approved and the insurance company will cover the repair costs minus any deductions.
• Reimbursement: If you’ve already paid for the repairs, submit the bills for reimbursement.

Knowing how to navigate the claim process can make a potentially stressful situation easier to handle. Whether you have third-party or comprehensive insurance, it's essential to be familiar with your policy's terms and conditions for a smooth claim process.

While vehicle insurance might not be the most exciting topic for automobile enthusiasts, it's an essential aspect of responsible vehicle ownership. Understanding your options and limitations can save you a lot of trouble down the line. Make sure you read through your policy details carefully and consider add-ons that might be relevant to you.

Thank you for taking the time to read through this thread on vehicle insurance in India. I have covered various aspects, from types of insurance and their limitations to the nitty-gritty of claim procedures. But, of course, this is a vast and ever-evolving subject, and I wholeheartedly welcome any additional information or perspectives that you, my fellow TeamBHPians, may have.

I know that dealing with insurance can be daunting and confusing, but it's a part of the driving experience that we shouldn't overlook. So, please feel free to ask any insurance-related questions you may have right here on this thread. Your questions will not only benefit you but also contribute to our community's collective wisdom.

I'll do my best to find the answers and share them here for everyone's benefit. Together, we can make this thread a go-to resource for any automobile enthusiast looking to understand the intricacies of vehicle insurance.

Let's help each other become more informed and prepared for those unexpected turns on the road of life. I'm excited to hear your thoughts, questions, and experiences. Let's keep this conversation rolling!

Here's what BHPian Ashdel had to say about the matter:

Thanks for this thread - a couple of add-ons

• You can choose your own IDV - provided that the insurance company agrees to insure with that amount. In case of unforeseen "Total Loss" insurance company cannot come back and say - your car is over-insured basis market value (I personally went through this 10 years back - when my Santro was stolen and I normally choose the highest IDV - next steps in point 2)
• In case of any dispute between the insured and the company - send written communications to their customer care - still if no solution is provided within 30 days or you are unhappy with the outcome - file a case with Insurance Ombudsman - they have centers all over India - (This is what I did after my Santro theft claim was denied - fought on my own and won the case - you would not need a lawyer for this - this Insurance court is consumer friendly and they are for all types of insurance matters - not limited to Motor).

Here's what BHPian SinghBHP had to say about the matter:

Always take Gap Value / Return to Invoice Coverage while taking the insurance.

You would notice that when we buy a car the sales guy may provide you insurance on ON_ROAD price which does not cover the additional taxes you pay on your car. In case of a theft, the claim is processed on the ON_ROAD price and you lose a hefty amount which you paid as taxes. The Return To Invoice or Gap Value insurance covers that and you get the claim value as per the total amount at the time of purchase.

Here's what BHPian Altocumulus had to say about the matter:

A major point to consider.

While everyone goes for Zero Depreciation for peace of mind, most insurers have restrictions in fine print on the number of 0Dep claims in a year, in most cases 1 or 2 claims max.

So please ensure you read the fine print, and either go for one with unlimited claims or plan your claims accordingly.

Check out BHPian comments for more insights and information.