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Motor Insurance: Monsoon Vehicle Insurance Policy Research Team | Posted On Thursday, July 05,2018, 05:14 PM

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Motor Insurance: Monsoon Vehicle Insurance Policy




With the advent of the monsoons and dust storms all over the country, it is important to take time and reconfirm if your vehicles are adequately insured. It is very important to protect your vehicles by taking adequate motor insurance policies and add-on covers, to lessen the risk posed by monsoons and dust storms. So, go ahead and find the best add-on cover for your vehicle.

The Indian Meteorological Department (IMD) has predicted thunderstorms in most parts of the country. North India has been witnessing monsoons mixed with dust storms. Southern and Western India has seen consistent rainfall, even before the advent of the monsoon season.

In the absence of adequate insurance cover, you will incur increased maintenance and repair costs owing to waterlogging, skidding of the car, fall of trees, collisions, and so on.

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Monsoon In India: Worried About Vehicle Insurance Policy?


According to the General Insurance Council (GIC), in 2015-16, only 83 million out of 190 million registered vehicles in India had third party insurance cover. This reveals that almost 50% of the vehicles on the Indian roads, do not have third party liability cover.

The Motor Vehicles Act mandates that every vehicle owner buy third party liability insurance. If you don’t have a valid cover, you will be penalized with heavy fines. Chances of imprisonment are high.

An insurance policy covers only those losses which are caused by an event like a collision, accident and so on. Wear and tear, a breakdown of the motor and so on due to regular use of the vehicle are not covered in a basic motor insurance policy.

Monsoons and dust storms damage parts of your vehicle.


There are two types of motor insurance policies:



1. Third party cover:


A third party insurance policy covers the damages caused by you to a third party (an unrelated party). In case of accidents, this insurance covers all the damages that you cause to the third party, their motor vehicle and its accessories. It also covers injuries caused to the third party. However, a third party liability plan only covers the third party and not you (damage to your vehicle). Getting your vehicles insured with a third-party insurance policy is mandatory by law.


2. Comprehensive motor insurance plan


As the name suggests, a comprehensive motor insurance plan provides coverage for all the damages caused to the third party as well as you. The damages caused may be due to a human act or natural calamity like flood, earthquake, dust storms, and so on. It covers the damages to your motor vehicle, third-party legal liability, theft, etc. It also provides personal accident coverage.

To make your vehicle monsoon-ready, you can add these five add-on covers to you comprehensive vehicle insurance policy:


1. Engine protection cover:


Bigger cities have bigger problems. Flooding is a common sight in cities like Bangalore, New Delhi, Mumbai, Chennai, and so on. Submerging of vehicles in flooded streets, damages the engine and results in a hydro-static lock. To cover losses and damages to the engine, it is imperative to get an engine protection cover. This add-on cover also covers damages caused to gearbox, leakage of lubricating oil and so on. This add-on may increase your premium costs by 7-9%.


2. Return to invoice:


We all know that the value of a vehicle is subject to depreciation. This means that the value of your vehicle decreases with time. When it comes to settling vehicle insurance claims, the insurer only pays for the written off value of the vehicle. They will not pay the ex-showroom price. Therefore, a return to invoice add-on cover comes in handy. This add-on reimburses the difference between the ex-showroom price and the Insured Declared Value (IDV) of your car.

It also covers registration fees, road tax, and insurance amount if your car sustains severe damages or is stolen. If your car cannot be repaired any further, this is the right add-on. Be informed that if the same model of the vehicle is available in the market at a lower price than the original price at which you had made the purchase, the lower price will be considered to settle the claim.


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3. Consumable expenses:


Consumables are the goods that are bought regularly as they get used-up quickly, and need to be replaced quite often. Examples of consumables are lubricants, engine oil, gear box oil, nuts and bolts, grease, bearing, etc. Note that fuel is not a consumable. A consumable expense add-on covers the expenses incurred in replacing or replenishing the consumables due to an accident of the insured vehicle.


4. Nil Depreciation:


The insurer declared value of an insured vehicle is always low. This is because they calculate depreciation on certain parts of the vehicle at the time of settlement. This results in a loss of claim amount. A nil depreciation add-on cover, allows you to claim the entire repair costs of the car parts. Therefore, you will get the full claim amount. A nil depreciation add-on cover, works only in case of a partial-loss claim.


5. Roadside assistance cover:


If your car breaks down and is in a condition where it cannot move, the roadside assistance add-on cover takes care of the towing. Your car will be towed and taken to the nearest authorized garage. It also covers costs of repairs, flat tire service, emergency fuel delivery, and so on.


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