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Applying for car insurance? Here are the things you should keep handy

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According to the Motor Vehicles Act, 1988, having third-party car insurance is mandatory for you to be able to drive your vehicle on Indian roads. However, this only covers damage to a third person or their property as a result of an accident involving your vehicle. But if you take a comprehensive insurance policy, you will get coverage against the damages to your own vehicle as well as third party liability. These days, a variety of add-ons are also available to boost the efficacy of car insurance policies.

Now, whether you opt for third party liability only or comprehensive coverage (optional but recommended),you will need certain documents in place to get a quote and apply. Let’s start with the basic ones:

1. Valid driver’s license

   This is mandatory if you want to drive a car in India or any other country for that matter. Also remember that your driving history is associated with the driver’s license. A poor historical record will yield a higher premium as insurers will then consider you to be a risky driver. New drivers also attract a higher premium as there’s no history to gauge their performance. Insurers also take into account their lack of experience behind the wheel.

   However, a clean history of no claims and fines, etc., will attract a lower insurance premium as insurers then consider you to be bankable, cautious, and safe.

2. Vehicle

Car insurance is heavily dependent on the vehicle. Every aspect of the vehicle is considered to deduce the cost of insurance. Age, depreciation, safety features, location, market value of the car, variant, etc., all come into play when insurers decide on the cost of premium.

As is the case with any insurance policy, you need to have insurable interest in the object being insured. Which is why you need to have a vehicle or be in the process of purchasing one when applying for car insurance.

When you finally apply for insurance, especially online, you will be given a quote. Note that this quote does not equal the final price after application.

Quote and application – Everything you need to know

The quote is simply a rough estimate of the cost of insurance based on the basic preliminary information that you provide. This is usually the first step you will encounter on the insurer’s website. Here, basic information like the following will get you the quote, such as:

• Driver information
• Vehicle year, make, and model
• Annual mileage
• Vehicle use

  However, when you submit the application, you will be required to add all the other details, like your vehicle registration number, chassis number, driver’s license, vehicular age, claims history, PUC certificate, address proof, previous policy number, etc. This is the paperwork stage in which the insurer gathers data on your vehicle and your personal driving history.

  The application will then be underwritten – assessed for the risk, usually by an automated system, to arrive at the final cost of insurance. Sometimes, an underwriter may be required to assess risk in special cases – for example during new policies, payment issues, historical record of multiple claims.

  Finally, after the underwriting process, you will be issued a final premium. You might need to furnish additional information to complete the insurance process. This includes:

• Loan information (if applicable)
• Payment method
• First instalment payment
• Proof of discounts (if applicable)

Once you provide all the above information, your application should get processed with relative ease. Hence, while applying for car insurance policies, keep your documents handy to ensure a smooth and efficient process. It goes without saying that applying for third-party liability insurance will be less cumbersome than comprehensive insurance, but the latter is what you ideally need for maximum coverage.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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