Thursday, January 28, 2021

All you need to know about the New Motor Insurance policy

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When you’re investing in a motor insurance policy, it is essential for you to know the new requirements that they come with, including the advantages you’re liable to enjoy and the benefits you no longer have access to. Staying updated, in terms of your asset, is essential.

The new Supreme Court Order has made it compulsory for car owners to have an extended third-party insurance plan, starting from September 1. Car owners are expected to buy a motor insurance policy, and two-wheeler owners are expected to buy a five year plan. Even though third-party insurance for four wheelers and two wheelers has always been mandatory, from September 2014 onward, car owners have to pay more money for premium three year and five-year insurance plans. Before this, the rule only stated that the vehicle must have a one-year insurance, which they can renew annually. However, due to the increase in deaths related to road accidents, the Supreme Court has decreed that cars must have five-year motor insurance and two-wheelers a two year one.

The third-party car insurance is a kind of car insurance that covers the claims that have come from a third party in an accident where the owner of the car was at fault. This kind of third-party motor insurance pays for the fiscal liability that can arise in an accident. The apex court has decreed that no vehicle will be allowed on the road without third-party motor insurance. A new buyer can choose from three kinds of motor insurance policies.

1. Long Term Package:

A long term package covers both third-party damage and own damage for three or more years, according to the need of the vehicle. This is a suitable option for those buyers who wish to pay their four-wheeler insurance in one go. However, when availing this, the buyer cannot change their insurer in the later years in order to lower their own damage premium. After the first year, the overall outflow rises in these kinds of plans. The cost upfront is also very high, and since most car sellers force their customers to buy insurance from them only, the overall price of the car increases by a high amount. If your car salesman is forcing you to get this kind of motor insurance policy, he is lying to you, and you do have an option of not buying this particular kind of third-party car insurance plan.

2. Bundled Cover Plans:

A Bundled Cover plan offers five-year coverage for third party damage, and one-year coverage for own damage. These plans are generally cheaper than long term packages. This kind of plan is suitable for people who want to keep their premium outflow controlled. The customer buying this kind of online motor insurance policy is also advised to remember that the overall interest that is charged on vehicle finance is around 11-15 percent per annum.

3. Solo Third-Party Packages:

The solo third-party only packages or standalone packages cover only the third part insurance. This option is available in both three year or five-year plans according to the court-mandated requirement for your vehicle. This kind of insurance package saves a lot of premium for the buyer. However, this can also incur major loss in case of theft of the vehicle or accidental damage of the vehicle, as those things are not covered by the vehicle. Thus, we see that all of these plans have their own pros and cons. The buyer should correctly assess their own situation and requirements before choosing a motor insurance policy. Furthermore, with the introduction of the new law by the supreme court, multiple three and five-year plans will come up on the market. This makes it all the more necessary for the customer to make an informed decision based on the advantages and loses. They must read their insurance policy in detail, and ask their dealer to give

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