Monday, October 23, 2017

Editorial

6-motor-insurance-terms-you-must-know-before-you-claim

So many terms and conditions to peruse, so many policy papers to pry apart! If only there was some sort of insurance dictionary you could refer to every time you came across a word or term you didn’t know…

Well, now there is.

We’ve simplified the meanings of a list of common terms you will definitely come across when buying or renewing motor insurance.

1. Insured Declared Value (IDV)

Simply put, IDV is the current market value of your vehicle.

IDV refers to the highest sum payable by the insurer for a vehicle insurance policy.  It is thus the maximum amount you can claim in case of total loss of your vehicle, for instance if it gets stolen or damaged beyond repair.

Tip: Refrain from quoting an IDV lower than the actual market value of your car. Though you may think that would allow you to pay less premium, it may also result in you receiving inadequate compensation.

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2. Own Damage Premium

This is the premium you pay to avail insurance cover equal to the IDV, and forms a major part of your total motor insurance premium.

ODP insures your vehicles against losses caused by events outside of your control. This includes natural disasters like earthquakes and tornadoes, as well as man-made calamities like fires and explosions.

Tip: The ODP differs according to the model, cubic capacity, geographical zones, etc. of the vehicle so make sure you specifically ask about it.

3. Zero Depreciation Cover

When you make a claim, standard insurance policies deduct depreciation on replaced parts. However, if you opt for a Zero Depreciation cover, insurance companies waive off depreciation on such replaced parts, which means that you get a higher claim amount.

Tip: This cover is generally only applicable for the first few claims. Thus, though it may demand a steeper premium, it’s advisable to opt for it given that the claim amount is considerably higher.

4. No Claim Bonus (NCB)

This is essentially the discount you become eligible for when you have not made a claim in the previous year- kind of like a reward for prudent use of your vehicle. This discount considerably lowers the insurance premium you need to pay when you’re renewing the policy.

Since the NCB discount amount can be quite large- starting* at 20% for the 2nd year and up to 50% for the 6th year, it’s worth refraining from registering a claim for minor damages, and instead holding out for the NCB.

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Tip: The NCB can generally be transferred from one insurance company to the other but is only allowed if the policy is renewed within 90 days of the expiry of the previous policy, so make sure you claim it as soon as possible.

5. Third Party Cover

Third Party cover protects the vehicle owner against any financial liability as a result of death, physical injury or damage to the property of a third party. The term’ third party’ is used because the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the vehicle owner and the insurance company.

A victim can thus file a third party cover claim against the owner of the vehicle, and the latter’s insurer will pay for this claim on their behalf.

Tip:  According to Indian Law, third party cover is mandatory when you’re buying a car, so do ensure that it’s a part of your contract with your insurer.

6. Personal Accident Cover

Beyond just your vehicle, Personal Accident Cover financially safeguards you against unforeseen events causing bodily harm, such as Accidental Death or Permanent Total Disability arising due to a road accident.

Over 1,37,000 people** were killed in road accidents in 2013 alone. India does hold the dubious distinction of most number of road accidents annually.

Tip: Not every motor insurance policy includes personal accident cover so it’s absolutely essential you make sure yours does.

The next time you’re buying or renewing your motor insurance, keep this simple glossary handy so you don’t feel cheated or played on.

Keep reading to learn more about motor insurance and buying insurance online.

*http://articles.economictimes.indiatimes.com/2014-09-29/news/54437310_1_motor-insurance-third-party-cover-vehicle-owner

** National Crime Records Bureau, Ministry of Road Transport & Highway, Law commission of India, Global status report on road safety 2013

Sporty family traveling on motorbike, riding on motorcycle with raised up hands, active people, extreme sport, freedom concept

On India’s crowded roads and highways, where bumper-to-bumper driving is the bane of every car driver, owning a two wheeler can be a relief. Not only is weaving through traffic much easier, you can find parking absolutely anywhere and travel short distances without spending too much money.

According to a report published in June 2015, below are the 10 highest selling bikes in India in May 2014 as compared to May 2015:

The above list should give you a fair idea as to the top selling two wheelers in the country and can be a good starting point when deciding which one to buy.

But beyond popular opinion, here are the questions you must ask yourself when choosing the perfect two wheeler for you:

Scooter or Motor Bike?
Scooters offer a more natural seating position, automatic transmission, easy gearless riding, increased storage space, lower prices and greater manoeuvrability, which can be beneficial for city driving.

However, motor cycles give you more control of the vehicle given the presence of a gear box and are also preferred by bike enthusiasts who like to feel the power beneath them and hear the revving of a motorcycle engine as they ride, especially for long drives in the hills.

Budget- how much can you afford to spend?
Determine your savings, post-tax monthly income and monthly expenses. The remainder- besides a certain amount put aside as a safety margin- is how much you can afford to spend each month. Multiply this figure by the number of months you want to be paying for your two wheeler (not more than 60) and that’s the amount you can spend annual.

Also, keep in mind that you will own it for at least 2-3 years, and will also spend money to maintain it, in terms of servicing, repairs, insurance and fuel.

In the list of top selling two wheelers in India shown above, a majority of them fall in the range of between Rs. 45000-55000. This means that if you can spare this amount of money, you can afford a tried and tested two wheeler.

New or Used Two Wheeler?
This decision should be made based not only on your budget but also your comfort with riding.

If you are a first time rider, you should consider buying a second hand bike which you can later upgrade as and when you get more comfortable with riding. This way, in case you outgrow it too soon, you haven’t lost much in depreciation.

If you are buying a second hand vehicle, be very particular about asking for all the right documentation and details. For a simple guide to buying second hand vehicles, click here and to know how to maximise the value of your used vehicle, click here.

Model and Mileage?
One of the most important factors to consider is the model of motorcycle or scooter you wish to purchase. Here are the various types of motorbikes and scooters you can choose from:

To ensure comfort, you must ensure that when you are sitting on it in stationary position, you can place both feet on the ground without losing your balance. The weight of the two wheeler should also be suited to your physical capacity.

Beyond that, you also need to consider mileage. 80 kilometres/litre is where most motorcycles start at,

Are you ready to make the purchase?
After you’ve decided which two wheeler to buy, you have to make it happen.

Thus, the next thing you need to do is complete the financial transaction. Here are some tips on doing that:

Visit more than one dealer: Nothing works better than looking unconvinced and walking out a dealership and saying, “let me think about it”, so make sure you do that twice or thrice before deciding which dealer is giving you the best price
Make sure you take it for a test ride- If you aren’t an expert, bring a friend along who can ride it for you, preferably over both highways and bumpy street roads
Don’t accept anything at face value:Make sure you ask for the break-up of the cost and understand every element, be it ex-showroom price, insurance or RTO expenses
Feel free to negotiate; for instance, many sellers have been known to offer discounts if the payment is made in cash
Have you bought insurance?
There’s no doubt that Indian roads are not particularly safe. In 2014 alone, there were 489,400 road accidents and 137,000 related death, with two-wheelers being the deadliest vehicles accounting for around 30% of these, with cars and jeeps following close at 22.7%.

And this is why two wheeler insurance becomes so essential- not only does it protect the lives and property you and your loved ones, it also mitigates the financial impact of damage or injuries caused to third parties.

Insurers usually give insurance as a part of the cost of the two wheeler, but it is important that you find out exactly what is covered and what is not- not only in terms of various riding situations, but also individual bike parts and insurance riders.

With the introduction of Long Term Two Wheeler Insurance, offered by insurers like ICICI Lombard, the process of getting your two wheeler insured has become hassle freeWith this policy, two wheeler owners don’t need to renew their insurance every year and can now do so just once in three years. In addition, they also have the benefit of immunity to upward revisions in Third Party Insurance rates, which can lead to substantial savings. To know, click here.

For a decision as important as buying your very own means of transportation, a little bit of research is necessary. Follow the tips above to ensure you get the perfect two wheeler for you. If you feel like getting yourself a car, here’s a comprehensive guide to buying a car this festive season.

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Before I begin with this article, I would like to mention that customisation, as the name suggests, is entirely based on the customer’s own choice and satisfaction, and I completely acknowledge this definition. But just to give a heads-up on what the conventions of being unconventional out there are, this article takes its shape. To put it in simpler words, you can’t just go around attaching every aftermarket fitment into your car and expect it to claim appreciation.

But who wants appreciation? Well, let’s admit it, everyone does.

So why not do it right? Let me tell you how.

For the following sections, I will follow a particular format – Definition, How it should be done, The extremities.

Contrast Roof

Definition – This refers to the roof of the car which is coloured differently(usually black or white) from the rest of the body.

How it should be done – To understand this, we need to understand why it is done at all. I mean, it is obviously done for visual enhancement, but with some particular significance.

The white roof can be seen factory-fitted in cars like the Mini Cooper. It is done to symbolise the roof as a sort of cap worn by the car. But for achieving the same effect in any other car, one must make sure that the white colour is readily visible from all sides of the car, otherwise it makes no sense.

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As for the black roof, it is gives an appearance that the roof is made of glass. This can be seen factory-fitted in some models of Mercedes-Benz, Audi, BMW, Jaguar, etc. But the thumb rule for this one is that the edge of the roof should be continuous with the edge of the windshield and rear glass area. Another rule, which is very often violated, is the that the black colour should be very glossy and not matte.

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The extremities – Some cars can be seen to have graphic stickers or paints on the roofs, which directly reflect the owners’ vision and hence, are beyond the scope of any possible convention.

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Chrome Claddings

Definition – As the name suggests, some parts(mainly on the exterior) of the car are covered with chrome panels which give a certain bling to the car.

How it should be done – Application of chrome should be kept to a minimum unless you want your car to look overdone. I mean, imagine overtly shiny surfaces all over the body of your car, making it lose all of its boldness.

Chrome looks best on door handles and sometimes the on ORVMs and window frames; these give the car a costly appearance. But beyond that, one needs to be careful. In some cars with particular colours, a chrome front grill might seem fitting, but not with all colours. The parts where it is best to avoid chrome are the lights and body claddings. Moreover, excess thickness of a chrome window frame is the most disturbing sight for an onlooker.

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The extremities – The whole car can be painted in chrome, but I am not even sure if that is permitted everywhere. Onlookers, make sure to have your sunglasses on.

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Lights

Definition – This can refer to replacement of the stock lights in the car or attaching extra lights.

How it should be done – Replacing stock bulbs for LEDs or xenon units is fine as long as these comply to the laws. Even the LED strips placed inside the light housings as daytime running lights look good enough, but attaching LED strips on the grill are hugely responsible for making a car look clumsy and wannabe expensive. Underglow is also fine as long as the light source remains concealed from plain sight.

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The extremities – One of the oldest trends has been to blacken the light housings and place halo-rings inside them. Rest assure that the car loses its classy appearance entirely.

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Interior

Definition – In this section, I shall discuss about the modifications that can be made inside the car.

How it should be done – There is not much to say here, just that, the interior should have a consistent colour scheme, that is, a full black dashboard should not be accompanied with beige seats, if you know what I mean.

The extremities – Imagine a car with pink interior. Here again, consistency is the key.

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Rims

Definition – Let’s discuss about what kind of rims(alloy wheels) suit which type of cars.

How it should be done – Here again, not much needs to be told, just that flashy rims don’t go well with sober looking cars.

The extremities – Coloured rims are a possibility. But this can look well only if these are either of the same colour as the car itself, or are part of a colour scheme followed throughout the car(consider liveried sports cars).

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Body kits could have been a possible addition, but I decided against it because body kits are mostly made by professionals and these almost always make the cars look good, so there is rarely any scope of complaint.

The Conclusion

It is always okay to keep your car in stock condition. It not only reduces the risk of hampering the appearance, but also helps to fetch the maximum possible resale value. But there is nothing wrong in the desire to stand out of the mundane crowd. Just that the results are often far different from what we imagine and a little knowledge in this matter can go a long way.

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