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Car Insurance

Post By Mohit Mishra

Top 10 Car Insurance Questions Answered

Realizing that not everybody understands insurance well, we never treat any insurance query as unintelligent. For us, solving our customers and readers’ queries is of utmost important, as it eventually helps them make an informed decision.

We receive many questions in the car insurance category on a daily basis. Hence, we decided to compile the top 10 questions that are frequently asked by those seeking car insurance. Read on as we answer them one by one.

Question 1 – A close friend who borrowed my car crashed it badly while driving it. He was drunk at the time. Will I get reimbursement from my insurer?

Answer – Sorry, buddy! Damages caused due to drunk or rash driving, whether by you or by any other driver who you let operate your car will not be compensated under any car insurance policy.

Question 2 – If my car is older, will I have to pay higher premiums?

Answer – Yes, the vehicle’s age is taken into account while determining the premium amount. The older your car is, the higher will be your premium. This is because accidents tend to occur more often in case of older vehicles.

Question 3 – I am moving from Raipur to Mumbai. Will there be an increment in the amount of my car insurance premium in Mumbai?

Answer – Yes, premiums tend to shoot up when you’re buying car insurance in a metropolitan city. Metropolitan cities where premiums will be higher compared to smaller cities and towns include Mumbai, New Delhi, Bangalore, Kolkata, Pune, Chennai, and Ahmedabad.

Question 4 – Are natural calamities covered under car insurance?

Answer – If your car is covered under a comprehensive car insurance policy, then yes, any damage or loss resulting from natural calamities will be covered.

Question 5 – What should I do with my car insurance policy when I sell my car?

Answer – You have these 2 options:

Option 1 – You give away your existing insurance policy to the one who buys your old car and get the No-Claim Bonus (aka NCB) certificate from your insurer. Now what to do with the certificate? With this certificate, you can get a refund of the amount received as discount under your NCB.

Option 2 – You keep the insurance policy with yourself along with the NCB amount and receive a good discount on the insurance of your new car.

Question 6 – What is No-Claim Bonus?

Answer –To define NCB in simple words, it is a kind of monetary reward or discount that you get when you do not file a claim on your car insurance policy during a policy year. Let’s say you did not file a claim this year. Now, next year, when you renew your car insurance policy, you will receive a discount of 20% on your premium. Similarly, for the subsequent uninterrupted claim-free years, you will keep on getting discount on your premium at the rate of 25%, 35%, 45% and 50% (50% being the maximum discount). However, in case you file a claim and the claim-free years are consequently interrupted, the percentage of discount will be pushed down to 0% until in the next claim-free year, when you will avail 20% NCB again.

Also Read: All You Need to Know About No-Claim Bonus

Question 7 – For how long is my NCB certificate valid?

Answer – NCB certificate is valid for 3 years.

Question 8 – I have an NCB certificate from my older car and I wish to avail its benefit for my new two-wheeler insurance. Is it possible?

Answer – No, you can avail the benefit/discount on your NCB certificate only when you are transferring it within the same category of vehicle, that is, from car to car.

Question 9 – What is cheaper? Paying my car insurance premiums monthly or yearly?

Answer – Paying your car insurance premiums yearly is always cheaper compared to paying them monthly.

Question 10 – How is my car insurance premium determined?

Answer – Your car insurance premium will be determined keeping these factors in mind: