HOW TO PROCEED TO INSURE YOUR CAR / OTHER VEHICLES?

To insure your car or any other vehicle, there are certain procedures to be followed and it can generally be divided into three broad areas. Identification of the car / vehicle It is very important to identify your car so that it can be recognized very easily and claim for damage can be settled at once in case of an accident. Identification parameters include registration number, color, horse power of the vehicle, shape, size, model etc.

Particulars related to risk

Type of previous insurance, kind of policy etc.

Declaration about the statement

The insured shall declare that the statements made in the policy document are true to the best of his / her knowledge. The truthfulness involved in the statement is very important since the car is insured based on the statements provided by the insured and it forms the pillar for the agreement.

How much premium I have to pay?

The motor / car insurance is one of the highly competitive markets and hence the premium varies depending on the company and the states where you are living. Basic premium is more or less similar in most of the states and the add ons that come with it makes the premium variable. Age of the car, model, utility to which it is put into, past track record of the insured, horse power, value of the motor car decide the extra premium apart from the basic one.

Higher premium is charged for the car when the risk involved is greater

Rebate can be offered to the owner of a car if he / she has an already insured vehicle (car) with the same insurance company and if the concerned person is a member of any automobile association. The previous claim made for the vehicle is another factor that decides the reduction in premium and whether the car was under the personal care of the owner.  Apart from the premium, the main important objective one has to look for is the customer service. This is the reason why in some countries, car rental companies that offer sport utility vehicles pay higher car insurance premiums. Such provision is necessary because the chance of causing extensive damage to other cars is relatively high.

Premium is the major criterion for those who look for “short term auto insurance policy.” It is otherwise known as “temporary auto insurance” or “temporary automobile insurance policy, say for the state of Arkansas.” The term of insurance is usually for one year but the term may be reduced under special circumstances and in such cases, the premium may be higher. For e.g. for a six months duration policy, the premium charged may be three fourths of the annual premium. It is called short term insurance policy.

Since the duration of policy is short term, customers go for premium as the single most important decision maker rather than the customer service since the relationship is not long lasting.

Value addition of policy

If a customer wants some extra benefits not included in the original policy, he / she can get the benefits included in the original policy by payment of necessary extra premium and enjoy all the benefits.

The policy will remain valid till its expiry irrespective of the change of ownership of the vehicle. In other words, the car can be sold to another person along with the policy and the policy will remain in force till the unexpired period. There is an option to replace the car with the same policy subject to certain conditions. 

When risk involved with the insured vehicle is reduced, the proportionate share of premium is returned to the insured and it is called Furlough Concession.

How can I settle the claim when my car meets with an accident?

As soon as the unforeseen event – the accident occurs, the insurer is immediately apprised of the event and evidence / eyewitness if available, may be placed at the disposal of the insurer. When the insurer is satisfied with the available evidence / enquired facts, claim form is issued to the insured which is returned to the insurer after duly filling it.

If the damage happens in the form of personal injury, claim can be made provided the original policy had included that clause. Similar is the situation with regard to damage to property, defense and prosecution. When the insured is at negligence, the insurer will pay only the amount of liability. That is the insurer is not legally liable for indemnification to third parties.

Another important clause to look for is Knock for Knock agreement. In this, third party liability does not arise and the insurer’s liability is to compensate the loss suffered by the insured and this is covered under the clause “knock for knock agreement”

What is the difference between cancellation and non renewal of your policy?

Most of us may be thinking that both cancellation and non-renewal are one and the same but there exists a big difference. Insurance companies cannot cancel a policy that has been in force for more than two months (60 days) except when you didn’t pay the required premium, made a grave misrepresentation in your application or when your driving license has been cancelled/suspended for breach of rules and regulations.

Non-renewal of premium is entirely a different entity. Either you or your insurance company may decide not to renew the existing policy when it expires. But your insurance company must inform you in writing the reasons for not renewing the existing policy before a certain period of time depending on the state in which you are living. If you feel that you are taken for a ride, you can contact the customer care of the insurance company and even if their explanation is not satisfactory, you have the right to call your state insurance department and get your grievance redressed.

But if you are at fault like drunken driving, you run the risk of having your premium raised or not renew your license. If your present insurance company decides not to renew the existing policy, it may not be necessary that you will be charged a higher premium by a different insurance company.