Right now the monsoon has covered the whole country. It is raining heavily in some areas of the country. Roads have become lakes in cities like Delhi-Gurugram, while in hilly states like Himachal Pradesh and Uttarakhand, this rain has brought great devastation. Such pictures and videos are being received from many places, in which big cars are seen floating in the water like paper toys. In such incidents, people’s lives may be saved somehow, but there is a big economic loss. Protection from these unexpected losses is possible, just a little awareness and information is needed.
Insurance does not save only from challan
Some documents are necessary to drive a car on the road. For example, the papers of the vehicle should be complete, if the vehicle is older than one year, then a pollution certificate should be made, the driver should have a license. Apart from these, one more paper is necessary and that is insurance. The cost of insurance is added to the on-road price at the time of buying a new vehicle. Later the insurance has to be renewed. The need for this insurance is not just limited to protection from traffic police and challans. Insurance is a very useful thing and it becomes necessary to take care of some things while buying it.
2 main types of vehicle insurance (What is OD/Third Party in Car Insurance)
There are two types of vehicle insurance – OD ie Own Damage and Third Party. Your own damages are covered under OD. It is clear from the name of third party that the damage caused to others in the accident is covered in it. The insurance that is available while buying a new vehicle is comprehensive ie it covers both OD and third party parts. There is a need to understand OD well in this.
What is IDV in Car Insurance
Car insurance has many components. Many companies offer them together, while many companies offer them as add-ons. The most important component is the IDV. This is the basic thing of any insurance. IDV Mane Insurance Declared Value. The value that the insurance company attaches to your car is called IDV. The basic coverage you get with the insurance is equal to the IDV.
Difference between higher and lower IDV
IDV is never equal to on-road price or showroom price. Companies keep IDV less than the actual price. As the car gets older, the IDV also reduces. Now suppose that the total cost of buying a car is Rs 8 lakh and the IDV of insurance is Rs 6 lakh. Let us see the further calculation according to this situation. Now imagine that your car gets stolen, or meets with an accident beyond repair, or gets washed away due to rains and floods, or meets with some other natural calamity, what will happen then?
What is Return to Invoice (What is Return to Invoice in Car Insurance)
The obvious answer is that you will make an insurance claim for the car. After making an insurance claim, the company will give you the amount equal to the IDV. It means that even after getting the insurance cover, you have suffered a loss of Rs 2 lakh. The solution to avoid this loss is the ‘Return to Invoice’ add-on. This add-on provides coverage for the difference between the actual value of the car and the declared value ie IDV. Meaning if you have kept the return to invoice add-on in insurance, then you will not suffer a loss of Rs 2 lakh. If you are also scared of watching videos of cars floating in water, then get RTI added to your insurance.
Must have Add-Ons in Car Insurance
While buying car insurance, it is important to consider some other important add-ons as well. Another important and useful add-on is the engine protection. In many cases, damages caused to the engine are not covered under the basic coverage of the insurance. In such a situation, if you have kept this add-on, then you will not have tension. Consumables are also an essential add-on to car insurance. There are many such parts in the car, which are not usable again after being opened. Apart from this, there are many things like engine oil to coolant. In case of normal coverage, you will have to pay for all these out of pocket, while being a consumables add-on will not cost you anything.
This is how you can take advantage
Apart from these, there are other add-ons like road side assistance, tire coverage. You can choose them according to your need. Many companies provide coverage for hotel expenses. Suppose your car breaks down somewhere and you have to stay in a hotel, then as an add-on, the insurance company also pays for the cost of the stay. You can add these add-ons to your coverage at the time of renewal of insurance. Many companies also provide the facility to buy add-ons in between. For this you can talk to your insurance company.
Also read: Have you got EPFO 7 lakh insurance? You get benefits without paying 1 rupee, know all about this scheme
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