Are you eligible for a 'no-claim' discount?
In the case you do not claim for one year, you can avail of a no-claim discount, if you renew your policy with the same or a new insurance company. In the case your policy has expired, you can still avail the no claim bonus if you renew the policy within 90 days of its expiry date. When applying for no claim you can show as proof the documents related to the number of years no claim discount earned, the expiry date of your last insurance policy and any claims that have been made.

What are the minimum/ maximum percentages of the Bonus(NCB)?
The minimum Bonus is 20 percent, maximum is 50 percent
The rates of the NCBs (No Claim Bonus)

20% on 1st renewal.
25% on 2nd renewal.
35% on 3rd renewal.
45% on 4th renewal.
50% on 5th & subsequent renewals.

Can an insurance policy be renewed with some other company?
It is possible for you to transfer the insurance policy to some other company. It requires you to submit a new proposal form. In this case the new insurance company may make a physical inspection of your vehicle. A notable thing is that your bonus can also be transferred to the new policy.

On sale and transfer of vehicle, what happens to the Bonus?
The Bonus goes with the original owner since he can claim bonus on his next purchased vehicle. However the purchaser enjoys the bonus under seller's policy till the renewal date. On date of renewal, the bonus/malus has to start afresh.

What is voluntary excess/deductible?
A voluntary excess/deductible is the amount of money that you have to pay when you file a claim with a motor insurance company. For example if you file a claim of Rs 2000 and as per your plan, the deductible is 20%, i.e Rs 400. In this case you pay Rs 200 and the balance Rs 800 will be paid by the motor insurance company. You may opt for an insurance plan that is high on deductible and low on premium, in the case you are not going to file claims too often.


How is voluntary excess different from compulsory excess?
In case of voluntary excess, it is the client's option for which he gets discount in premium whereas compulsory excess is imposed by the insurance company in addition to Malus to take care of a bad claim experience for a particular car. For compulsory excess, no discount in the premium is allowed.

What extension of cover can be obtained with regard to private car?
The following are the prominent extra risks that can be covered in addition to the standard cover:

  • Personal accident of insured, spouse and unnamed passengers
  • Legal liability of the employees of the insured
  • Wider Legal Liability to Drivers


What are the circumstances under which discounts are offered in premium ?
The following are the significant circumstances under which a discount is offered on the amount of premium to be paid:

  • Where the insured is prepared to bear a fixed amount in respect of every claim for damages to the vehicle
  • A discount commonly referred to as bonus is allowed on the premium when no claims are made against the policy during the relevant previous year
  • A 5 percent discount is allowed if the insured is a member of a recognised Automobile Association (the amount of discount will not exceed Rs.100/- for private cars)
  • Additional discount in the case your vehicle is fitted with anti theft devices, approved by the Automobile Research Association of India (ARAI). The amount of discount is usually the premium of 2.5% to a maximum of Rs 500.


What is the significance of a certificate of Insurance?
The Certificate of Insurance issued by the insurers in relation to every vehicle is the only evidence acceptable to the police authorities to show that valid insurance exists. This document has to be produced when demanded by an authorised police officer.

The Certificate of Insurance cannot be backdated. Hence, if a Policy is not renewed on or before the expiry date, the Certificate of Insurance in respect of new Insurance will be effective only from the date of New Insurance. For every renewal, a fresh certificate must be obtained. If there is any alternation in the risk during the currency of the insurance, the old certificate should be surrendered and a fresh one to be obtained. Duplicate Certificate in lieu of defaced, mutilated or lost certificates can be obtained on payment of prescribed fee and after production of an affidavit to that effect.

What is expected of the insured in the event of an accident involving damage to the vehicle and/or injury to third party ?

Damage to the Vehicle:
When an accident takes place, a report should be immediately filed with the insurance company and a set of claim forms submitted to them. An estimate for repairs and/or replacements has also to be prepared and submitted. The insurance company may then appoint an independent Surveyor who will also value the damage and hold discussions with the repairers and arrive at the amount at which the claim will be settled.

On completion of the survey, the repair work can be undertaken. When the relevant bills are produced, settlement will be made under the Policy. The claim amount may be paid either directly to the repairer or to the Insured if the latter has already made payment to the repairer and holds proof of the same.

In case of settlement of claim either for total loss of the vehicle or for replacement of certain items, such damaged vehicle or parts belong to the insurance company. They may arrange for disposal of the same in the best manner possible.

Death or Injury to Third Party:
The moment an accident takes place and a third party is involved, a report should be immediately filed with the police. Simultaneously, notice should be sent to the Insurance Company.

No settlement should be made with the third parties for any compensation to the latter and no commitment should be entered into with regard to the Insured's liability with the third parties.

All dealings with the third parties will be only with the knowledge and approval of the Insurance Company. Any claim from third parties will have to be suitably defended in consultation with the Insurance company and expenses for such defence will be payable by the insurance company if incurred with their consent.

Can Motor Insurance Policies be taken for a shorter term than the normal period of one year?
Motor Insurance Policies are normally taken for a period of one year. However, according to the requirements of the vehicle owner, a policy for a shorter term can be issued.

Situations do arise when a person plans to sell off his vehicle within a couple of months and he does not intend to renew his policy for another year. In such circumstances, he may go for a shorter period of cover. Short period insurance attracts Short Period Scale for calculating premium and obviously comes out costlier than the pro rata for the said period.

Short Period Scale

Period Not Exceeding Rate
1 week 10 percent of annual rate
1 month 25 percent of annual rate
2 months 35 percent of annual rate
3 months 50 percent of annual rate
4 months 60 percent of annual rate
6 months 75 percent of annual rate
8 months 85 percent of annual rate
Exceeding 8 months Full Annual Premium

Can the insurance premium be reduced?
If you maintain a claims-free record, you accumulate bonus points, which translate into discounts on policy renewal. When a policy holder doesn't not make a claim the insurance company provides a discount on the Own Damage part of the premium. In the case you have installed an anti-theft device in your vehicle, which is approved by the Automotive Research Association of India then a discount of up to Rs. 500 could be availed of. Another way for reducing the cost of premium is to opting for voluntary excess, which means opting to bear a certain amount of loss from each claim.

When you are buying a motor insurance policy, should you list your family members on it and can their driving record impact the insurance policy?
You should list your immediate family or your extended family members on your automotive insurance policy. It heps you later on in some emergency situation.

The family members' driving history certainly has impact on the the insurance company's decision to provide the insurance cover for your vehicle and also influences the rates of premium.

Why do insurance rate quotes vary depending on the insurer?
Usually the rate of insurance quote varies depending on the insurance company.

The company's claim experience, the types of people they insure and cost for doing business vary from company to company and may cause rates to differ. Another factor that affects the insurance premium is the city, where the car has been registered.

Do I get some discount on premium if I have installed anti-lock system and anti-theft alarm?
Yes, you get additional discount in the case your vehicle is fitted with anti theft devices, approved by the Automobile Research Association of India (ARAI). The amount of discount is usually the premium of 2.5% to a maximum of Rs 500.

Can a personally imported car be insured?
Yes, but only in the case the car is available as a standard production model in India and has an Indian registration number.