Part-2
Calculating the IDV is the important step in getting insurance. Once you know the mechanism you can judge what will be your reimbursement?
IDV – Insured Declared Value of the vehicle will be deemed to be the ‘sum assured’ for the purpose of this policy which is fixed at the commencement of each policy period for the insured vehicle.
IDV= ex-showroom price + sales tax – depreciation
*note IDV does not include registration and insurance charges. IDV for new vehicle will be 95% of the showroom price.
Depreciation and IDV:
Depreciation is amount deduced by the insurer which depends on age of the vehicle and its type of accessories. Depreciation for nylon/plastic parts/tyres and tubes/batteries is 50%, for fibre class components it is 30% and for parts made of glass it is nil, for other parts including wooden parts it ranges from 5% of the cost of the car or bike which is less than six months old to 50% if the age of the car or bike is less than 5 years.
Drawbacks in buying old vehicle: IDV for 5 years and above old vehicle and vehicle which are no longer in production (like qualis) mutually agreed upon by the insurer and the insured.
Good thing with IDV is the insured vehicle will be treated as total loss if the aggregate cost for repair of the vehicle exceeds 75% of the IDV.
The insurance company will not be liable for mechanical or electrical breakdown, for damage to tyres and tubes unless the vehicle insured is damaged at the same time. In the Part- 1 I have told you insurer will reimburse you for the theft of the vehicle but note that the insurer will not be liable for the loss or damage to accessories by burglary unless the vehicle is stolen at the same time.
Premium/Tariff structure for Third party Insurance:
Premium structure for third party insurance as set by IRDA; for cars up to 1500cc premium is Rs670, for 1000 – 1500cc car it is Rs800 and for car more than 1500cc it is Rs2500. For two wheelers up to 75 to 350cc it is Rs300 and for bikes more than 350cc it is Rs620. For package policy which includes vehicle damage and Personnel accident coverage premium differs for different companies.
How to make an appropriate claim?
Now we will see how to make a suitable claim in case your car or bike met with an accident. Before making claims for Personnel accident and Vehicle damage make sure that your insurance has life. Insurers are very strict with the period of insurance.
Insurance companies have given authority for the insurer to repair in case cost of repair including replacement does not exceed Rs 500 for cars and Rs 150 for two wheelers.
For more than this prescribed amount you have to follow the following steps.
•intimate to your insurer as soon as possible
•File a FIR in near by police station which is compulsory in case other than vehicle damage.
•If vehicle is in movable condition move to your nearest garage and estimate the cost of repair. Don’t repair just estimate
•In case if the vehicle is in immovable condition just tell the insurer to send spot surveyor
•Spot surveyor will estimate and take the vehicle to nearest garage
•Once the estimate is over, fill the claim form in addition to the claim form you have to submit the following documents along with it
1)copy of policy
2)copy of registration along with original for verification
3)copy of driving license along with original for verification
4)Police report
5)Discharge voucher in case you are hospitalised
•Once you have submitted these documents, final surveyor will verify your claims. He will send his recommendations to the Insurance Company
Most insurance companies do not have their own surveyors; they appoint someone to carry out this work. Depending on your money claimed number of surveyors inspect will vary and this result in increase in time for reimbursement.
In the claim form you will be required to fill the details on accident such as nature of the accident, statement of driver, occupant status and details of FIR.
In case of theft you have to submit additional things such as letter regarding – RC of the vehicle to be transferred in the name of your insurer, original keys of the vehicle and original policy.
An useful advice from insurers is for better reimbursement intimate them as soon as possible, call their toll free number and act as per their direction and most importantly try to file an FIR even in case of vehicle damage only. This will make your claim easy to process. Let’s follow their advice.
In the Part-3 we will see what are Malus and No Claim Bonus? Also about Motor vehicle Act and some specials