Motor Insurance

Since the Globalization hit, the world economy including India has changed dramatically over the years. Even a decade ago we couldn’t have imagined that India will be the fifth largest economy in the world. But certainly it is now. The bright side of it is that we are more financially secure and the world might want to give it a second thought before considering us a poor country. We now talk about branded and luxury products, spending more on our lifestyle choices. People of metropolitan cities like Delhi or Mumbai using more private transport rather than opting public transport facility. But there is another side of these things and that we may not be comfortable of listening. We are now very prone to accidents and injury and death of self and others. Obviously insurance is a tool that are readily available to us and that can support us financially. Motor insurance is basically a third party cover, pays back someone whom we caused any damage or injury while using our cars. Although almost half of the population who owns any motor vehicle does not have any insurance, The Motor Vehicles Act made it mandatory to have an insurance while using one.

A year back my friend Rudra came to meet me and that was quite surprising. The last thing I knew about him, he had a good job in Delhi and then we became busy with our lives. This time he came with his brand new four wheeler purchased a week before. He seemed to be quite excited but a little confused. I asked him the reason. He confided me in that he need an insurance for his new car but getting confused. So, I did brief him a little about the motor insurance. I told him as was saying before it is basically a third party insurance and he can also consider about taking a comprehensive insurance. While the mandatory third party insurance pays for damage of property and health and death of others caused by us, a comprehensive plan can cover for heath of the driver or owner and damage of the vehicle. The insurance companies fix the sum assured of the policy based on car manufacturer’s listed selling price of the particular model and they call it IDV (Insured’s Declared Value). The insurance is renewable on year on year basis. Like other insurance he can always opt for some additional benefit which is going to cost him a little extra than his base premium. Additional benefit may be cover for the accessories in the car, personal accident cover or legal liability cover etc. As far as insurance company is concerned he can choose a company he can trust or he can do a little research about that. But I chose a comprehensive cover which was the cheapest and the company had over 85% of claim settlement ratio. He wanted to know about the ratio and I told him that that’s simply a measure of how much a company is settling the claim over total claim received. He seemed quite relieved when left that day.

Although some other factors we may have to consider like network of garage are linked with the company and no claim bonus. Some company pays no claim bonus if no claim has been made over a year resulting up to 50% reduction on premium of the subsequent years and if claim made in a year then company may increase the premium for the subsequent year. When someone takes some safety measures in the car insurance company may consider of reducing the premium as the chances of accidents also decrease. Insurance is transferable if someone is considering about selling his old car. When something likewise happens you need to contact your insurance company with all the expenses details and fill a claim form along with them and company will reimburse the expenses after some investigations. Claim need to be made within a certain time limit otherwise company may not be responsible to pay for the claim. The loss like consequential loss, wear and tear, mechanical and electrical breakdown, damage to tyres if the damage not happened on the same time, if the loss happened because of using liquor or drugs etc.

With the betterment of our life traffic accidents and accidents related death has growing day by day. According to a study within some years road accidents are going to be one of the biggest cause of death. When we are opting for a car it is also becomes our responsibility to take at least the mandatory third party cover. Although it’s mandatory to have an insurance under the law but as a responsible citizen of this country we need to do that. It is often said that life is short and we should live our life king size. But let’s just say that enjoying with taking care of people around us in a society, is a life worth living for. By doing this bit we are not only insuring our smiles and happiness but also of others. Human needs are categorized in various levels by Abraham Maslow, social needs is one of them. Being a human, we always wants acceptance as well as appreciation by the society. Well, we earn those things only when we are fulfilling our duties and responsibilities towards ourselves and our society. Taking those measures will make our country safe and more beautiful at the same time.

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