Insurance is a contract which is presented as a policy to be used as a risk management tool to ensure financial protection at the time of crisis. Insurance helps an individual to ensure financial protection against losses that may arise during an unforeseen event. An insurance policy is a contract between an individual (policyholder) and an insurance company (Insurance provider), under which, the individual makes regular payments known as premiums to the insurance company which in return pays the sum assured in case an unforeseen event such as demise of the policyholder, accident, damage to the vehicles or other possessions.
Why is insurance important?
Unfortunate events like accidents, illnesses, and natural disasters come without any warning and thus it is necessary for you to keep yourself and your loved ones shielded against such unforeseen happenings. One of the best and simplest ways of keeping yourself secured against these contingent events which may cause a financial loss is buying an insurance policy.
How Does Insurance Work?
As mentioned earlier, insurance is a legal contract between the policyholder and the insurance provider. The insurance policy carries all the details about the aspects and conditions under which the insurance provider will pay out the insurance amount to the policyholder or their nominee in case an unforeseen event occurs. Insurance is a financial tool which helps in ensuring financial protection of yourself and your family. Generally the person who has purchased the policy also known as policyholder has to pay premiums for the coverage available under the insurance policy. Any person can seek insurance from an insurance company.
What are the types of insurance available?
IThere are several types of insurance available in India. The four most common types of insurance bought in India are as mentioned below:
Motor Insurance: Motor insurance policy is a type of insurance policy that provides financial assistance in the event of an accident or mishap involving your vehicle. Motor insurance can be purchased for three categories of vehicles which are personally owned four wheeler, personally owned two wheeler (bikes and scooters) and commercial vehicles. There are three types of motor insurance available in India which are Third party Liability Cover, Comprehensive Cover and Stand Alone Own-Damage cover. According to a person’s coverage requirement for their vehicle, they can choose a motor insurance that fulfills their requirements. Third party motor insurance policy is mandatory in India for all vehicles, as per the Motor Vehicles Act.
Health Insurance: Health insurance policies provide financial assistance to the policyholder in case they need to be admitted to the hospital for any kind of treatment. Additionally, some health insurance plans also cover the cost of treatment which are undertaken at home before the hospitalization or after discharge. There are several health insurance plans available in India such as Individual Health Insurance, Family Floater Plans, Critical Illness Cover, Senior Citizen Health Insurance, Group Health Insurance, Maternity Health Insurance and Personal Accident Insurance.
Life Insurance: Life insurance is an agreement between an individual and an insurance company under which the insurance company promises to provide a sum assured (death benefit) to the family of the life assured in the event of an unforeseen death of the life assured. In case of no death, a sum assured known as the maturity benefit is provided to the life assured at the time of maturity of the policy under selective life insurance plans. There are 6 types of life insurance policies available in India which are Term Life Insurance, Unit-Linked Insurance Plan (ULIPs), Child Protection Plan, Money Back Plans, Retirement Plans and Endowment Plans.
How to make a claim in insurance?
There are two ways in which you can make a claim:
- Cashless claims: Get in touch with your insurer and inform them about your claim. Depending on the type of insurance (motor/health), the insurer will guide you about the cashless claim settlement process. In case of motor insurance, the insurer shares the details of a nearby cashless workshop if available and you just have to pay your part of the liability to get your car/bike repaired. In case of health insurance, you can get in touch with your TPA (Third Party Administrator) help desk at the time of hospitalization for a cashless claim.
- Reimbursement claim:In case of unavailability of a cashless facility, you need to make a reimbursement claim. In case of motor insurance, you need to pay the entire claim amount up front (after informing the insurer of the claim) and get it reimbursed from the insurer after the repair of your car/bike. In case of health insurance, you need to pay the entire bill amount to the hospital (after informing the insurer) and get it reimbursed from the insurer post discharge from the hospital.
What is a car insurance policy?
It is an agreement between an insurance company and a car owner under which the former provides an insurance cover to the policyholder for financial damages incurred by his/her car in unforeseen events. Depending on the coverage, there are three types of car insurance plans – third party , standalone own-damage and comprehensive insurance. It’s renewal online process provides instant e-Policy.
Why should I buy car insurance?
There are a number of benefits of owning four wheeler insurance. Firstly, it helps you meet the legal requirement of owning at least a third party cover. Moreover, an insurance policy helps you meet financial liabilities that may arise towards a third party or own damages to your car due to a road accident or any other unfortunate event.
How much fine do I have to pay for not holding car insurance while driving?
It is mandatory to own at least a third party car insurance policy while driving a car. If you get caught driving without it for the first time, you may be charged with a fine of Rs. 2,000 with or without imprisonment of a maximum of 3 months that can increase to a fine of Rs. 4,000 and/or jail of up to 3 months, when caught for the second time.
How much is car insurance premium?
The premium rates for third-party car insurance price depend on the engine capacity of the car and is fixed by the IRDAI. However, the premium for standalone own-damage and comprehensive car insurance policies varies from car to car depending on a number of factors such as car’s MMV (Make, Model and Variant), RTO location, engine capacity, registration city, fuel type,
What if my car insurance policy gets expired?
Every car insurance comes with a validity period, post which you need to renew it to continue to enjoy its benefits. However, even if you miss to get your plan renewed by the expiry date, you can still get it renewed till the next 90 days from the date of expiry. After the expiry of this 90-day period, car insurance cannot be renewed. In such a case, you need to purchase a new policy.