When buying insurance, have you come across rumours of claims being rejected? If so, rest assured that such instances are usually because of the buyer’s oversight rather than the insurer’s malice. You see, insurance offers financial protection against a risk to your life, health, home, motorcycle, or in this case, your car.
This means that the policy document needs to describe in detail the circumstances under which your claim will be paid or not paid. Missing out on such details or simply skimming over them when buying car insurance is the number one reason why the claims of most well-meaning people get rejected.
The only way to avoid this is by educating yourself on important insurance components. Here are four such vital components of car insurance that you should know about to ensure your claims are paid in full and on-time.
There are two aspects to a comprehensive cover – third-party liability and own-damage coverage. The former protects you from the financial liability that arises when your vehicle damages the property of or causes injuries to a third-party. Every vehicle owner is required by law to have third-party liability insurance. Thoroughly read this section in your policy document to know about the various inclusions and exclusions of your third-party liability coverage.
The other section you need to examine is the own-damage coverage. As evident by the name, it refers to the financial protection you get for loss or damage to your vehicle. Details of this coverage are generally clubbed under ‘loss of or damage to the insured vehicle’ in your policy document. Reading this section is advisable both before buying the policy and before raising an insurance claim as it mentions which incidents that cause damage to your vehicle are covered and which aren’t. If the incident that damaged your vehicle is not mentioned or is excluded, then your claim is likely to be rejected.
Personal Accident Cover
A personal accident cover is a compulsory requirement under vehicle insurance. It provides compensation for injury or fatality caused during an incident. In your policy document, this section specifies the insurance amount, the nature of injuries covered, and the scale of compensation for each type of injury. For instance, while 100 percent compensation is paid for death, the figure for partial disability ranges between 40-70 percent. This is why you must read up the details to avoid confusion if and when you file a personal accident claim.
Inclusions and Exclusions
One of the most important components of your comprehensive car insurance policy is the list of inclusions and exclusions. It lays out what your car insurance policy covers (inclusions) and what it doesn’t (exclusions). For instance, most insurers tend to exclude loss or damage to the vehicle caused outside the geographical area of operation and loss or damage to the vehicle if it’s used for a purpose different from what’s mentioned in the policy.
Again, glancing over this list before you buy a policy or file a claim is advisable. If the list has too many exclusions or leaves out too many basic things, switch to another insurance provider.
Terms and Conditions
The terms and conditions section is the most overlooked of all sections, whether it relates to your insurance policy or when you sign up for a new app. But having a firm understanding of the terms and conditions can make your claims filing procedure hassle-free.
And though reading the fine print might sound tedious, it’s a duty that every consumer needs to perform to safeguard their rights. For example, certain insurers have a very complicated claims process, details of which are mentioned in the terms and conditions. If you find the steps too confusing, you can save yourself a lot of stress by going with a different insurer.
Nowadays, each car insurance component described here can be easily compared online. Instead of being at the mercy of agents and other middlemen to help choose the best car insurance policy for you, you can simply go online and buy a policy within 10 minutes. But before you click on the ‘Pay’ button, make sure to carefully read the important insurance components and clauses described here.