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Three tips for choosing the right motor insurance

For the overall protection of your vehicle, it is important that you buy a comprehensive policy that gives adequate cover to your vehicle at all times. (Illustration: Shyam Kumar Prasad)

By Sajja Praveen Chowdary

The excitement around buying a new vehicle-be it a two-wheeler or a four-wheeler-for the first time in your life remains etched in your memory. You check out various models, compare features and prices, and then choose the one which is best for you. However, most people forget to follow the same process while buying motor insurance for the vehicle.

As per the Motor Vehicles Bill 2019 in place, driving a vehicle without valid motor insurance draws a penalty of Rs 2,000 and/or imprisonment up to three months for the first offence and a subsequent penalty of Rs 4,000 on the second offence.

When buying a new vehicle, it is good to do a detailed research and compare various motor insurance policies available online. Dealers usually sell bundled motor insurance policies that mostly provide vanilla coverage and lack the features that may be required to cover the risk for your vehicle in a comprehensive manner. For the overall protection of your vehicle, it is important that you buy a comprehensive policy that gives adequate cover to your vehicle at all times. Here are few tips to consider while buying a motor insurance policy for your brand new vehicle.

See what the dealer has to offer
While buying a new vehicle, people are tempted to buy insurance from the dealer itself as they do not want to spend time researching the various options available. Moreover, dealers give heavy discounts on the premium to a few customers only. However, there are far more disadvantages of buying insurance from the dealer as they only sell policies of those insurers who have a commission-based tie-up with the dealer. Also, the extent of coverage offered in the bundled insurance products is very limited and while taking a claim, the consumers may have to face many a challenge.

Understand types of policies
A motor insurance policy has two-basic components-third-party liability (TP) that covers damage done to others and Own Damage (OD) that covers damage to the owner's vehicle. While TP cover is mandatory, the OD cover is optional. After the implementation of the new guidelines issued by the Supreme Court, it is mandatory to buy a long-term insurance cover. The Insurance Regulatory and Development Authority of India has directed all the general insurers to offer a three-year long-term third-party insurance cover for all brand new cars while it is mandatory for new two-wheelers to have a five-year cover.

Choose the right add-ons
A basic comprehensive motor insurance policy provides coverage to your vehicle against accidental damages and damages to the vehicle caused due to natural calamities. However, there are various other elements as well that can cause severe damage to the vehicle. To provide adequate coverage to your vehicle against all such damages, buy add-ons such as zero depreciation, engine protection cover, return to invoice, roadside assistance covers and consumable coveralong with the regular cover to make the policy much more comprehensive. Buying such add-ons may increase the premium by 15-20%, but the coverage is way more useful and cost-saving during an emergency situation. Also, consider the inclusions and exclusions when buying add-ons.

The writer is business head, Motor Insurance,