10 Things You May Not Know About Your Car Insurance Policy

Insuring against potential losses is a fundamental aspect of human nature. We work hard to achieve things and acquire possessions and wanting to protect them against damage or theft is natural. A car is a valuable possession and a necessity in today’s times. However, while on the road, it is prone to accidents or damages that can require immediate attention. Hence, a good car insurance policy is a must. However, most car owners miss out on some important benefits offered by these policies since they don’t research enough or read the fine print. Today, we will share ten things that you probably don’t know about your car insurance policy.

10 things about your Car Insurance policy that you might not know

There are numerous insurers offering car insurance today. While all policies offer the basic cover, there are various perks and discounts that you can avail of via your policy. Here is the list:

1. Cover for damages apart from accidents

Car insurance offers protection against losses caused by accidents. However, did you know that most policies also cover damages or losses caused by natural calamities like earthquakes, floods, etc.? They also cover man-made disasters like theft, riots, terrorist acts, etc. Ensure that you check the details of the cover before buying.

2. Online Policy Renewal is possible

Many car owners are probably aware of this, but it deserves mention for the benefit it offers. While traditionally, buying or renewing a policy meant lengthy documentation that consumes a lot of time, online policy renewal has made the process easy and time-efficient. Most insurers offer the option of renewing your policy online with a few clicks and online payment options.

3. Accessories of the car can be insured too

Any car owner would understand the amount of time, money, and effort he invests in buying the right accessories for his car. A basic car insurance policy covers the vehicle and NOT the accessories. However, many insurers offer separate add-ons that allow you to include the accessories in the policy. While the premium amount increases a bit, it ensures that your damages are covered in case of any untoward incident.

4. Cover at zero depreciation

A car is a depreciating asset. This means that with time, the value of the parts of the car decreases. Hence, when the insurer honours a claim, he applies depreciation to arrive at the final amount. This means that if you have to buy a replacement part, then you need to bear the difference between the money received from the insurer and the market value of a new part. However, insurers like TATA AIG offer a zero depreciation add-on that allows you to get comprehensive cover without factoring in depreciation. While this means a slightly higher premium, you can be assured of the claim amount without worrying about the wear and tear of your car.

5. Waiver on towing fee

Driving your car means having to manage mishaps or breakdowns at any time of the day or night. Based on where you are, finding a mechanic or a garage can be difficult. Even if you manage to find someone, you need to be prepared to pay exorbitant towing fees. While this might seem like an unavoidable cost, most basic car insurance policies allow you to claim these towing charges up to a prescribed amount. 

6. Lower premium for reduced third-party coverage

When you purchase a comprehensive car insurance policy, it includes third-party, as well as, own car damage due to an accident or a mishap. However, some car owners might feel the third-party cover to be exorbitant. Some might also feel confident about averting any third-party claims by settling it themselves. Such car owners can reduce the third-party coverage and ask the insurer to extend a discount on the premium amount.

7. Protection for your car’s engine

Some insurers offer an add-on that allows you to include a special cover for any damages to the engine due to a malfunctioning gearbox or oil/water spill, etc. This ensures that the insurer bears the cost of repairs in any such event.

8. Around the clock spot assistance

Spot assistance means assistance wherever you are. Let’s say that you have a mishap in the middle of the night on a highway with no garages around. If you have included this add-on, then the insurer offers essential services like towing, legal assistance, taxi arrangement, etc. on the spot.

9. Cover for all occupants of the car

This add-on offers additional cover to all occupants of the car if you meet with an accident and they experience total disability or death. 

10. Tax Benefits

If you are a business owner and use the car for business purposes, then you can avail tax benefits under Section 88 of the Income Tax Act, 1961. This is available on the amount of premium paid for car insurance. However, the car must be in the company’s name or the sole proprietor’s name (in case of a sole proprietorship).

Summing Up

If you were not aware of some or all of the benefits mentioned above, then you might want to talk to your insurer and check if you can include some add-ons now. On the other hand, if you are planning to buy car insurance, then keep these factors in mind while choosing the best option.

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