Insurance is perhaps the most underrated financial instrument in our lives. If you think about it, having insurance is an acknowledgement of the fact that there exists a certain possibility, big or small, of things going wrong, be it with your owned assets, property or even your life and family. It is an instrument that appeals to the fear in you, a primal emotion that drives many decisions of your life.
How then, one may ask, do you decide whether you need insurance in the first place and then how do you decide which is the right one for you? At the last count, the insurance industry had a few hundred products to offer to you as a potential customer – for your car, two wheeler, health, home, business and pretty much every important aspect of life including what matters most, your life.
Well, there is nothing complex about the concept of insurance, but the plans for insurance that you may see or hear of around you, might sound complex to you. I will, in this article, try to make the understanding of a few products simple for the reader. I will explore the few insurances one must have if you are a car owner.
Owning a car means a big step in your life. Whether it is for conveyance to office, home, relatives or just a casual weekend drive, being a car owner has its own set of responsibilities that you must fulfil and having the right set of insurances is one of them. Let us look at a few top insurances one must have as a car owner.
1.Third Party Liability Insurance (TP Policy): This is a standard third party liability policy underwritten by insurance companies. It comes handy in case of an unfortunate event where there arises a liability for a third party accidental damage (third party bodily injury, death or property damage) by your vehicle. One You must note that it is compulsory to take a third party liability insurance for your vehicle as per law. The price for the policy is regulated and determined by the Indian insurance regulator (IRDAI – Insurance Regulatory and Development Authority of India) depending upon the class of vehicle and the cubic capacity. Needless to say, this insurance is compulsory to have if you are a car owner.
2.Comprehensive Insurance: This is a policy that covers for the damage to your car, should that happen. Also known as package policy, the premium for this is separate and is specifically paid for covering the Owner Damage (OD). This covers the expense you may incur on getting the vehicle repaired or in case of theft. This premium varies for different insurance companies depending upon your vehicle’s make-model, age, history of claims and a few other factors. You could also buy add-on covers like Zero – depreciation cover, engine protection cover and a whole host of covers that insurance companies offer to make your claim as comprehensive as possible. Please note that this adds on to your premium over and above the TP premium.
3.Personal Accident Insurance: This insurance provides compensation in the case of injuries, partial or full disability or death caused by violent accidental or external means. It is one of the simplest insurances to buy with the policy being issued with minimum data and can easily be bought online. While the possibility of personal injury may be rare, it is a simple and easy way to cover for such possibilities. You can also buy this insurance for passengers in the car. This insurance can also be bundled with the comprehensive policy. However, you may choose to purchase this as a separate insurance for yourself and your family.
4.Health Insurance: Most of your responsibility towards your car is pretty much taken care of by the above insurance coverages. It is also important to have a health cover for your family for any unseen eventuality as you must cover all types of risks. Health insurance is available for individuals in the form of individual covers and also in the form of family floater policies that cover a defined number of family members. The coverages are quite wide and one must take the insurance as per the need of the family. Do keep in mind that the needs of the family keep changing as you progress in life. The health insurance should be in line with those needs.
5.Travel Insurance: If you are traveling via air or train, you must take travel insurance that is specifically designed to cover any risk during your journey. Since your exposure to risk is related to your travel, the insurance will cover those risks. With new products in the market now, you can also buy in-trip insurance that can be bought in your taxi ride that covers for a wide number of risks that you may face while in the taxi.
On a closing note, I would advise the readers to read and check the details of your policy - like your name, address, details of your car (Registration Number, Cubic Capacity, engine and chassis number, no claim bonus etc.), and the Terms and Conditions of the policy carefully. These details become important at the time of making a claim and at the time of renewal. Also, you must read the exclusions that an insurer may make for covering your car. You must know them as they become important in the event of a claim. The policy copy is an important document and must not be forgotten in the glove box of your car after you purchase it. And last but not the least, drive safe…..
— By Ankur Agarwal, Director, Girnar insurance Brokers Pvt. Limited.
The views expressed here are personal. He can be reached at ankur.agarwal@girnarsoft.com
