Should you buy comprehensive motor insurance amid Covid-19 lockdown?

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We’ve been dealing with the Covid-19 pandemic for more than a year, and our lives are changing dramatically as a result. Most of us have been avoiding driving because our commutes to work have been cancelled, and our trips and journeys to see family and friends have been halted. Work-from-home orders are expected to remain in effect for a few more months, at least until 70 percent of the population has been vaccinated. In fact, many studies conclude that traffic volumes are unlikely to increase until remote work adoption and the shift to online shopping become more widespread. With people rarely driving their vehicles on the road, purchasing a comprehensive motor insurance policy makes no sense. A comprehensive motor insurance policy combines Third-party Coverage and Own-damage Coverage to protect you against damages to your own vehicle and third parties in the event of an accident.

Purchasing a comprehensive motor insurance policy only makes sense if you drive your vehicle every day for a significant number of kilometres.

Reduce your premiums with Third-Party, Fire, and Theft Insurance Insurance is one of the most expensive aspects of owning a car, with the average cost of a fully comprehensive motor insurance policy for a 1200CC sedan car ranging between Rs 15,000 and Rs 18,000. However, if you are not driving your vehicle as frequently as you used to due to the ongoing lock-down and work-from-home orders, it is best to only purchase the coverage that is required. Given the current circumstances, several insurers have devised a unique insurance policy – Third-party + Fire + Theft insurance. The plan provides vehicle-required coverage at a low cost – 50% less than regular comprehensive plans. This plan provides adequate coverage for damages to third parties as well as damages to your vehicle caused by fire and theft.

Affordably priced premiums with adequate coverage The plan operates similarly to any other regular plan; however, the scope of coverage differs in that it does not cover you for damage to your own vehicle. You can easily drive your vehicle on the roads with this insurance because, according to government regulations, only third-party insurance is required for driving a vehicle on Indian roads. If you have an accident while driving the vehicle and cause damage to a third party, your insurer will bear the expenses on your behalf and pay the third party. When renewing your auto insurance policy, it is always a good idea to choose the highest IDV possible. This is because, in the event of an incident such as total damage or theft, if the authorities are unable to recover your vehicle, the insurer will pay you the IDV stated on your policy. Always choose maximum IDV if you want to get the most money out of your damaged vehicle.

Fire is the third incident for which the plan provides adequate protection. With daytime temperatures in most parts of northern India exceeding 40 degrees Celsius, vehicle fires are quite common. Most vehicles that catch fire are completely destroyed and cannot be repaired. The insurer classifies such vehicles as total damage, and the vehicle owner receives the full IDV of the vehicle. Fire and theft are the two most common causes of vehicle damage, and it is always important to provide adequate coverage for your vehicle against both of them. Third-party insurance is also important because it is mandated by the government for driving.

During the lockdown period, when you are hardly driving your vehicle and only using it for emergencies, it is preferable to obtain Third Party + Fire + Theft insurance instead of a comprehensive policy and save significantly on the premium. With lockdown rules reinstated, there has been a twofold increase in sales of Third Party, Fire, and Theft insurance plans in the last month. These plans are currently available from well-known insurers such as Future Generali, United India Insurance, and Digit. The plan costs around Rs 4,500 – Rs 5,500 for a 1200CC sedan.

The author is Head- Car Insurance, Policybazaar.com. Views expressed are personal.