Auto insurance: Taking the sting out of a road accident

By Arun Balakrishnan

Indian roads witness a motor accident every minute. And these accidents claim one life every 3.7 minutes. The high occurrence of road accidents makes it imperative for every motorist to adopt necessary safeguards. While the trauma associated with an accident may be unavoidable, the financial stress that an accident may render can be mitigated.

A comprehensive auto insurance policy covering third party liability and own damage is a must to protect one against expensive repairs or replacement of the car in case of total damage. In addition, you can opt for various add-ons which will be handy in case of an accident.

[caption id=“attachment_668357” align=“alignleft” width=“380”] A suitable insurance portfolio and apt knowledge about filing a claim can equip you to deal with a car accident much better. Reuters[/caption]

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24/7 roadside assistance services is one such add-on. By opting for this add-on, you would have access to services like a towing facility to the nearest garage, transport of occupants through a hired cab and accommodation benefits in case of long distance travel.

Another cover which can protect you from substantial loss in the event of an accident, especially if you own a high-end car, is “Return to Invoice”. In the event of total damage of the vehicle in an accident, this plan provides you with the invoice value of the car (the cost of a new car of similar make) as opposed to a basic policy which would only reimburse the Insured Depreciable Value (IDV) calculated after deducting depreciation.

One can also opt for Depreciation Shield, which protects the insured from loss due to depreciation of the vehicle. The rate of depreciation may range from anywhere between 10 to 50 percent, depending on the age and condition of the car and the parts which need repair or replacement. However, under the Depreciation Shield, one can get the full Sum Assured without deduction for depreciation. Moreover, this add-on also covers the repair costs of fiber, glass, rubber parts and plastic; parts which are normally excluded from normal car insurance policies.

While a motor insurance policy will insulate you against financial losses on account of damage to your car as well as any third party’s property, you must also consider the impact of serious injury or disabilities affecting the earning capacity of the victim. This is where Personal Accident insurance can come handy. Personal accident policies provide security to the family in case of death or disablement of the insured, at affordable premium rates. These policies offer a payout that enables the family to continue leading a normal life, despite loss in income of the insured.

While having appropriate insurance cover is important, filing the claim correctly is also important. There are some essentials to be kept in mind for hassle-free claim processing after an accident.

Firstly, if the accident is a major one, one should file an FIR with the police within 24 hours of the incident. A copy of the police report should be kept as proof for filing the claim. Secondly, collecting necessary information and evidence is important. It is advisable to note down the contact details and driving license number of the other driver as well the registration number of his vehicle.

If the other driver is at fault, make a note of his insurance policy details. You can claim third party compensation from the errant motorist’s insurer. Having these details at hand will be helpful in case the claim goes into litigation. Also collect the contact details of witnesses as they may be needed to testify in case of a dispute. In case of major accidents, the vehicle should not be moved until the insurer has completed a spot survey.

If the insurer does not plan a spot survey, move your car to a safe location and take photos of the damaged vehicle. These will be required as supporting evidence when you file the claim. Thirdly, intimate the insurer in time, furnishing details like - insurance policy number and period of its validity; date, time and place of accident; particulars of the persons injured or killed in the accident; name of the driver and driving license details. Lastly, before taking your vehicle to the mechanic, obtain necessary authorisation from your insurer for repairs.

A suitable insurance portfolio and apt knowledge about filing a claim can equip you to deal with a car accident much better.

The author is the CEO of BerkshireInsurance.com