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How to maximise your motor insurance policy cover

How to maximise your motor insurance policy cover
How to maximise your motor insurance policy cover

Mumbai, Large number of policyholders still considers buying an insurance as an ‘unnecessary expense’. However, in reality buying the sufficient motor insurance cover is best not only for the vehicle but also for the policyholder.

Instead of not buying any cover or just buying very basic cover for motor insurance, policyholder should maximise various add-on covers in the same premiums or slightly higher premiums. If done the homework properly, policyholders can get a good deal while buying the motor insurance.

Motor insurance consists of two types – own damage and third-party cover. Third-party insurance is mandatory, with premium being fixed by the regulator on an annual basis. Insurers, on the other hand, fix their own rates for own damage and personal accident (CPA) cover. Now policyholders will have to buy long term third-party cover (three year for car and five years for two-wheelers) and only year of own damage cover.

Firstly, large number of policyholders don’t renew the policy after two or three years of buying the two-wheeler. Renewing your policy before the due date, not only avoids legal complications but also helps you enjoy additional discounts and other benefits.

So, one should ensure to renew the motor insurance within the stipulated due date and do not let it lapse. When the motor insurance lapses, the no claim bonus (NCB) benefit is valid only for a period of 90 days from the due date and later lapses. It is crucial that your motor insurance renewal is done before the due date to avoid a higher premium.

Secondly, while settling the claim, the insurer will not bear the entire cost of repair. Policyholder will have to pay a certain percentage which is known as a deductible. By opting to pay a higher deductible, the motor insurance premium reduces. One should understand that the voluntary deductible is higher voluntary deductible, they can reduce the overall cost of the premium. So, if someone is looking for low premium two-wheeler insurance, then they can opt for higher voluntary deductibles.

Though third-party insurance rates are fixed, own damage component is negotiable. Compare between different plans and negotiate with your insurer to get attractive discounts on your motor insurance policy.
Even many add-ons covers allow the policyholder to get increased coverage for specific cases at nominal premium increases. This way they can buy a cheap plan with basic coverage and purchase add-ons to cover specific risks that they want to protect their vehicle from. This is a much better solution than over-insuring the vehicle and paying for benefits one doesn’t need or under-insuring and not covering enough risks.
If the policyholders are confident of their driving habits, they can go for voluntary deductible to lower the premium. A deductible is the out-of-pocket amount paid by the policyholder when making a claim. While opting for deductibles, a higher voluntary deduction makes sense in two cases – one, if you are an extremely safe driver, which significantly lowers the chances of an accident and two, if you have not claimed insurance for a few consecutive years.
Finally, car modifications like adding alloy wheels, spoilers, etc., and expensive gadgets like automotive night vision, ultrasonic sensors, etc. may lead to a higher premium. Hence, such modifications and gadgets should ideally be avoided if policyholders wish to keep your premium low and get the maximum benefit of the policy.

The authored article is written by Mr. Rakesh Goyal and shared with Prittle Prattle News exclusively.

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