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Car insurance policies are a must if you own a car. The Motor Vehicles Act, 1988 lays down the traffic rules which are to be followed by vehicles that run on Indian roads. One such rule imposed by the Act is the requirement of a valid car insurance policy. So, besides needing a driving license to drive, you also need a valid car insurance plan.

Car insurance types

There are two types of car insurance policies which are available in the market. These are as follows:

• Third-party policies which cover only the third party liabilities which you face if your car causes any third party damage. This damage includes physical and bodily injury to third parties as well as property damage. coverage is the mandatory coverage for cars as specified under the Motor Vehicles Act, 1988.
• Comprehensive policies which have two coverage benefits. They cover the mandatory third-party liability as well the damages suffered by the car itself.

Most important 5 Benefits of car insurance policies

Besides being a mandatory legal requirement, car insurance policies also give you the following benefits –

1. If any individual dies in an accident involving your car, you face unlimited financial liability. You might have to pay a huge amount of compensation to the bereaved family which would create a financial crisis for you. Car insurance policies cover this liability and pay the compensation on your behalf freeing you from the financial crisis which you might face otherwise
2. Even in case of injuries suffered by individuals or any property being damaged, you are required to compensate for the financial loss caused. The car insurance policy covers this compensation as well as giving you financial relief
3. If you buy a comprehensive car insurance policy, you also get coverage for the damages suffered by your car. So, the repair costs are paid by the policy and you don’t have to shoulder the burden yourself
4. If your car is stolen, a comprehensive car insurance plan pays you a lump sum benefit which allows you to bear the financial loss that you suffer
5. There are useful add-ons under comprehensive car insurance plans which, when opted, promise assistance in case of car-related contingencies. You are, therefore, assured of help in case of car-related contingencies which makes it easier for you to face emergencies

Car insurance plans are, therefore, beneficial. If you have a policy on your car, you would also be saved from high legal fines and/or imprisonment if you are found to drive your car without a valid cover. So, you should invest in a car insurance policy for your car.

Car insurance premiums depend on these 7 factors:

When you buy a car insurance policy, you have to pay premiums on the same. The premium of your car insurance policy depends on the following factors –

1. Make, model and a variant of the car which determines its value. The more expensive the car is the higher would be the premium. 
2. Age of the car which reduces the value of the car due to depreciation. The older the car the lower would be its value and also the premium of the car insurance policy.
3. The type of policy you buy – third party plans have cheap car insurance premiums while comprehensive policies are expensive.
4. Fuel type of the car as the fuel variant determines the car’s value. Higher the value, higher would be the premium.
5. City of registration – cars in metropolitan cities have higher premium rates compared to non-metro cities
6. Add-ons selected – each add-on has an additional premium. If you select one or more add-ons, the premium would increase.
7. Policy discounts – there are different types of policy discounts available in car insurance plans. The higher the discounts that you can claim the lower would be the premium of the car insurance policy.

Top #7 Tips for cheap car insurance

Now you know how the premiums of car insurance policies are calculated but do you know you can reduce them?

Yes, there are ways in which you can reduce the premiums of your car insurance policy to avail a cheap car insurance plan. These ways are as follows –

1. Avoid making small claims in your policy. When you don’t make claims you earn a no claim bonus. This bonus starts at 20% and keeps increasing after every successive claim-free year. You can get a maximum no claim bonus of 50% which allows you a premium discount. However, when you make a claim, the bonus reduces to zero and you don’t get the discount. So, if you have small claims, pay them yourself rather than losing your accumulated no claim bonus.
2. If you are a member of an approved automobile association, you can get a premium discount.
3. If you install safety gadgets in your car, you can get a premium discount and enjoy cheap car insurance coverage.
4. If you use your car sparingly or if the car is very old, you can opt for only third party liability cover. Since the third party allows cheap car insurance cover, your premiums would be very low.
5. Choose only those add-ons that you require. For instance, if you don’t take your car on road trips, roadside assistance cover would not be required. Similarly, if you live in an area which has no water-logging problem in monsoons, avoid engine protect add-on. When you choose only the necessary add-ons, you can cut down on unnecessary additional premium payments and enjoy cheap car insurance cover.
6. Choose a voluntary deductible if you are a safe driver. The voluntary deductible represents the part of the claim which you are willing to cover yourself. When you choose a voluntary deductible, you lower the claim burden of the insurance company. Due to the reduced burden, the company offers you a premium discount.
7. Always compare and buy car insurance policies. Comparing lets you check the coverage details vis-à-vis premium rates of different car insurance plans. Through comparing you can get the cheapest car insurance policy for your car without compromising on the coverage.

Turtlemint is an online platform which lets you compare car insurance plans. Through Turtlemint you can compare the best policies and choose the cheapest car insurance plan as per your coverage needs.

List of the 10 best and cheapest car insurance plans

Here are a list showing the best and the cheapest car insurance policies available in the market –

1. HDFC Ergo Car Insurance PlansHDFC Ergo offers a range of car insurance policies for different coverage needs. There are long term plans as well as annual and bundled car insurance plans. The features which make HDFC’s car insurance plans one of the best include the following –
   
   • There is a network of more than 6800 cashless garages all over India
   • You get a range of add-ons to enhance your coverage
   • The company promises overnight car repair services in 13 main cities of India

1. TATA AIG Private Car Package PolicyTATA AIG is also a leading name in the insurance industry which offers cheap car insurance plans. The features of TATA AIG’s car insurance plans are as follows –
   
   • There are 13 car insurance add-ons which promise to provide an exhaustive coverage
   • The premium rates are low and affordable 
   • The company promises 24*7 assistance in case of claims

1. ICICI Lombard Car Insurance PlanICICI Lombard’s car insurance plans have the following features which make them popular –
   
   • There are more than 3900 cashless garages tied-up with the company
   • Even lapsed car insurance plans can be renewed instantly
   • The company offers comprehensive roadside assistance coverage in its car insurance plans

1. Royal Sundaram Car Shield PlanRoyal Sundaram also offers cheap car insurance policies which have the following benefits –
   
   • Free roadside assistance cover is allowed under the policy
   • There is an add-on cover which offers 100% purchase price to be paid in case of theft of the car or total loss
   • The company is tied up with 4600+ garages across India for easy cashless claim settlements

1. New India Private Car PolicyNew India is a public sector general insurance company which has a large customer base. This allows the company to offer cheap car insurance plans which have the following benefits –
   
   • Long term, annual and bundled car insurance plans are sold by the company 
   • There are different add-ons to make the coverage comprehensive

1. Bharti AXA Car Insurance PlanBharti AXA offers both comprehensive as well as third party plans. Its car insurance policies have the following benefits –
   
   • A range of add-on covers are available under Bharti AXA’s comprehensive policy
   • A network of 4500+ garages make availing cashless claims easier
   • The company offers round the clock claim related assistance

1. Reliance Car Insurance PolicyAnother leading name in the general insurance industry, Reliance offers a multitude of car insurance policies for its customers. The features of Reliance’s car insurance plans include the following –
   
   • The policy is issued and delivered within 10 seconds
   • There is a free roadside assistance cover under the plan worth INR 500
   • The company has a tie-up with more than 4450 garages all over India. This makes claim settlements easier

1. Bajaj Allianz Car InsuranceBajaj Allianz offers cutting edge yet cheap car insurance plans. The features of the company’s car insurance plans include the following –
   
   • The company offers 24*7 spot assistance in case of claims
   • The Motor-on-the-spot feature allows you to make a claim through videos and images right from the spot of the accident
   • There are more than 4000 cashless garages which are tied-up with the company

1. IFFCO Tokio Car Insurance PolicyIFFCO Tokio offers some of the best benefits in its car insurance plans which include the following –
   
   • There is unlimited zero depreciation cover which allows you to make multiple zero depreciation claims under the plan
   • 24*7 roadside assistance is provided by the company
   • There is a network of more than 4300 garages in India for cashless claims

1. United India Motor Insurance PoliciesUnited India is another public sector general insurance company which offers both comprehensive and third party plans. The company offers cheap car insurance plans which have the following features –
   
   • Premiums are low and affordable 
   • There are a range of premium discounts which further lower the premium
   • Inbuilt as well as optional coverage benefits are available under the plan

Top #4 points to consider before investing in a Cheap Car:

These are some of the best plans which are also cheap. However, before investing in a cheap car insurance policy, the following points should be remembered –

1. Skimping on the coverageIf the premiums are very low, the coverage benefits would be limited. You would get what you pay for. The policy might not offer value-added benefits which provide better coverage. So, don’t skimp on coverage just to lower the premium rates otherwise you would suffer huge claims which would prove financially disastrous.
2. Ignoring add-onsYou might choose to ignore the add-ons to save on the premium cost. Add-ons, however, are quite beneficial as they provide unmatched coverage and increase the amount of claim payable. So, don’t avoid add-ons which are necessary.
3. The flip side of deductiblesIf you are availing a premium discount by choosing a voluntary deductible, remember that you would have to foot the amount of deductible that you have chosen. There is already a component of the compulsory deductible under car insurance plans which you have to pay in a claim. Choosing voluntary deductible would increase your claim burden. So, always weigh the savings in premiums to the cost that you would be born. Choose voluntary deductibles only when it proves economical.
4. Claim processAlways check the claim process of the insurance company before buying the plan. If the company is offering cheap car insurance but has a complicated claim settlement process, you would eventually suffer. So, pay heed to the claim process and choose an insurer which has a simplified process.
   Car insurance plans are mandatory but they don’t need to be expensive. Know how car insurance premiums are calculated and use the afore-mentioned tips to lower the premiums. You can check all the car insurance plans on  https://advisor.turtlemint.com/profile/190918/junja-ram and then choose the one which best suits your needs. Buy a car insurance policy from the best companies and enjoy cheap car insurance plans with the best coverage benefits.

Motor Insurance-Overview

Today, having your own vehicle and commuting using your own vehicle has become a necessity rather than a luxury. Short distance commute can be done easily by motorbikes and other two-wheelers whereas long-distance commute needs a four-wheeler. Travelling by a two-wheeler is advantageous in case of heavy traffic and it is also fun, especially for the younger generations; whereas commuting by a four-wheeler gives comfort.

However, several risk factors are associated when you are commuting either by motorbike or by a car on the Indian roads. So, it is necessary to ensure the protection of your vehicle against any such risk factors and this can be feasible by vehicle insurance or motor insurance.

Vehicle insurance or motor insurance is an agreement between the insurance provider and you for ensuring the protection of your vehicle in case of an unprecedented incident on the roads. Vehicle insurance is a mandate for all vehicles that are being used on the Indian roads. The main objective of vehicle insurance or motor insurance is to ensure the protection of your vehicle against any damage caused by natural or man-made calamities. With the recent amendments made to the Motor Vehicle Act, 2019 it has become extremely important to know about the different aspects associated with Motor Insurance.

Importance and benefits of buying a vehicle insurance policy:

So, why do you need motor insurance or vehicle insurance? Let us find out the major reasons and benefits of having vehicle insurance.

1. Reduces liabilities
   Third-party liability insurance coverage is mandatory in India. In case of an accident caused by you, the third-party liability insurance will cover all the expenses incurred in the treatment or repair of the third party person or vehicle.
2. Payment for damages 
   The cost incurred in repairing vehicles i.e. a car or a motorbike is always high. There might be accidents and your vehicle will need repairs. In such a case, if you have vehicle insurance you will not have to pay the expenses from your pocket.
3. Hospitalization expenses 
   Some road accidents can be major incidents and can cause serious injuries. The treatment and hospitalization expenses incurred can be too high. If you have vehicle insurance or motor insurance, you do not need to worry about these expenses and can focus on your treatment.
4. Compensation for your family 
   There can be some very serious road accidents in which the owner of the vehicle passes away. This would be a matter of financial emergency for the family members of the demised person. By vehicle insurance, the insurance provider can provide compensation to the family of the demised person.
5. Online vehicle insurance
   When you buy online vehicle insurance, then it is usually cheaper as there is no commission that needs to be paid to the distributors.
6. Reduced stress level
   Vehicle insurance will reduce your levels of stress and you would be able to enjoy peace of mind.

Reasons to buy motor insurance with a number of road accidents

The deteriorating condition of the Indian roads, increase in the number of vehicles on the roads and the negligent attitude of the young drivers towards traffic rules are the major reasons for the increase in the number of accidents in India.

Due to these reasons, many insurance providers in India have included several benefits along with the motor insurance policy.  Facilities like cashless claims at garages which are included in the network of the insurance company, towing facility, roadside assistance, invoice protection cover, accident cover; consumables cover, etc. are being offered as add-ons to vehicle owners for ensuring all-round protection of their vehicle.

According to a global report on the statistics of road accidents by WHO,

1. The number of road accidents in India was 129,965.
2. The number of road accidents in China was 80,500.
3. The number of road accidents in the USA was 60,780.
4. The number of road accidents in Russia was 40,890.
5. The number of road accidents in the UK was 7689.

 This data, when represented in the form of a pie-chart, shows that the highest percentage of road accidents occur in India. The need for road safety awareness and vehicle insurance is most required in India.

Different Types of Motor Insurance Policies in India:

Here is a list of different types of motor insurance policies that are available in India:

1. Third-Party Vehicle Insurance Policy
   Third-party vehicle insurance policy is mandated by the Government of India to ply the vehicles on the Indian roads as per the Motor Vehicles Act, 1988. A third-party liability only insurance policy provides coverage for the damages and the loss that has been incurred by a third-party person, property or vehicle by your vehicle.
   This is an insurance policy which saves the owner from all legal liabilities in case of an accident. The insurer bears the expenses arising out of the eventuality as long as the owner has a valid third-party motor insurance policy at the time of the accident.
   A third-party vehicle insurance policy covers any damage done to a third person’s property or vehicle or any bodily injury to a third-person resulting in death, disability or dismemberment or any legal liabilities arising from the same towards the owner.
2. Comprehensive Vehicle Insurance Policy
   A comprehensive motor insurance policy provides for complete protection of the vehicle towards damages done for own vehicle along with third-party coverage. This complete coverage includes any damage that has been caused to the car which is insured, any third-party liabilities and personal accidents.
   The different types of comprehensive vehicle insurance policies are:
   
3. Private Car Insurance
   Private Car insurance Policies will cover any damages caused to your own car or a third-party car because of accidents occurred. To obtain a good car insurance policy, you should compare car insurance policies online and select the best one.
4. Two-wheeler Insurance
   Two-wheeler insurance provides coverage for any damages caused to scooters or motorbikes and its riders during accidents. It also covers any damage caused to two-wheelers due to natural calamities or man-made disasters like theft, riots, etc. Generally, there are two types of two-wheeler insurance policy i.e. Comprehensive two-wheeler insurance policy and liability-only two-wheeler insurance policy.
5. Commercial Vehicle Insurance
   Those vehicles which are used for business purposes are known as Commercial vehicles. Commercial vehicle insurance is available for vehicles such as buses, taxis, ambulances and other vehicles like shovels, tractors, etc. By commercial vehicle insurance, coverage is provided by the insurance provider for damage caused to the vehicle due to accidents.

Comprehensive Vehicle Insurance Policies can be of the following types:

1. New vehicles bought after 1st September 2018 have the following 2 options:
   1. Long term third-party + Long term own-damage coverage:
      1. Car: 3 + 3, i.e. 3-year Third-party + 3-year comprehensive coverage plans
      2. Two-wheeler: 5 +5, i.e. 5-year Third-party + 5-year comprehensive coverage plans
   2. Long term third-party + one-year own-damage coverage:
      1. Car: 3 + 1, i.e. 3-year Third-party + 1-year comprehensive coverage plans
      2. Two-wheeler: 5 +1, i.e. 5-year Third-party + 1-year comprehensive coverage plans
2. Vehicles purchased before 1st September 2018 have the following 3 options:
   1. Long term third-party + Long term own-damage coverage:
      1. Car: 3 + 3, i.e. 3-year Third-party + 3-year comprehensive coverage plans
      2. Two-wheeler: 5 +5, i.e. 5-year Third-party + 5-year comprehensive coverage plans
   2. Long term third-party + one-year own-damage coverage:
      1. Car: 3 + 1, i.e. 3-year Third-party + 1-year comprehensive coverage plans
      2. Two-wheeler: 5 +1, i.e. 5-year Third-party + 1-year comprehensive coverage plans
   3. One year third-party + one-year own-damage coverage:
      1. Car: 1 + 1, i.e. 1-year Third-party + 1-year comprehensive coverage plans
      2. Two-wheeler: 1 +1, i.e. 1-year Third-party + 1-year comprehensive coverage plans

Top 4 Inclusions of Motor Insurance Plans in India:

Let us know about the damages which are covered under motor insurance or vehicle insurance.

Any damage caused to the vehicle due to riots, strikes, accidents, floods, storms, earthquakes, fire, burglary, etc. are covered under vehicle insurance.

1. The loss or theft of the vehicle that has been insured is covered under vehicle insurance.
2. Any third party liabilities incurred by the third party person or vehicle during an accident is covered under vehicle insurance.
3. Vehicle insurance or motor insurance provides personal accident cover for the insured vehicle’s driver.

Top 5 Exclusions of Motor Insurance Plans in India:

The below-mentioned damages caused to a vehicle are not covered under vehicle or motor insurance.

1. Any damage caused to a vehicle due to the effect of alcohol or drugs on the driver.
2. Damage caused to the vehicle due to wear and tear, ageing of the vehicle.
3. Any damage caused to the vehicle being driven by a driver without a valid driving license.
4. Any electrical or mechanical breakdown of the vehicle.
5. Any damage caused to the vehicle outside the boundary of India.

List of Top 5 most common add-on covers in comprehensive motor insurance:

There are several add-on plans which can be included in your motor insurance policy to enhance the coverage provided. Some of these add-on covers can be mentioned below.

1. Zero depreciation cover
   When a policyholder opts for this add-on, it means that the policyholder will receive the total claim amount on the value of the parts which have been replaced.
2. Key replacement cover
   In case of a key being lost, the policyholder will be eligible to claim reimbursement for the cost of the substitute key.
3. Roadside assistance cover
   Roadside assistance cover helps in assisting at remote locations in case of issues like flat tires, fuel issues, battery problems, etc.
4. NCB protect cover
   In case of no claims made by a policyholder during a policy term, the policyholder is rewarded with this cover. This helps in reducing the premium of the motor insurance policy as a discount offer.
5. Engine protection cover
   By the engine protection cover, if there is any damage caused to the vehicle’s engine then the repair or replacement cost will be covered by the insurance provider.

Different plans offered with features and coverage

As there are several insurance providers providing various motor insurance policies in India,
let us list down the major ones.

1. Tata AIG Motor Insurance Policy
   Some of the motor insurance plans offered by Tata AIG are mentioned below.
   

• Auto Secure Two-wheeler package policy
• Long Term Two-wheeler package policy
• Auto Secure –Private car package policy
• Auto Secure commercial vehicle package policy
• The major features of the motor insurance plans offered by Tata AIG are as follows.
  
• Personal accident covers for owner and driver
• Coverage against third party liabilities
• Coverage against loss or damage caused to the insured vehicle by any natural or manmade calamities.
• Inclusion of several add-ons for providing comprehensive coverage to policyholders.

1. Reliance General Motor Insurance Policy
   Reliance Insurance provides various plans related to motor insurance such as two-wheeler insurance policy, Private Car Insurance policy, Commercial vehicle insurance policy, etc. The major features associated with Reliance motor insurance policy are as follows.
   

• Coverage against damage caused to the vehicle due to natural calamities like fire, lightning, flood, earthquake, flood, cyclone, etc.
• Coverage against damage caused to the vehicle due to manmade calamities like theft, riots, strikes, terrorism, malicious activities, etc.
• Instant purchase of policy online without any hassle and paperwork.
• Cashless access to garages that are covered under the network of Reliance India Co. Limited.
• Motor insurance renewal can be done online without any paperwork.
• 24×7 roadside assistance add-on covers for the policyholders.
• Discount up to 70% on insurance premium for both car insurance and two-wheeler insurance policies.
• Very quick claim settlement for the policyholders.

1. HDFC Ergo General Motor Insurance Policy
   HDFC Ergo is one of the popular motor insurance providers in India. Some of the car insurance policies offered by HDFC Ergo are Long Term comprehensive car insurance, Third-party liability car insurance, Single year comprehensive car insurance, Long term comprehensive two-wheeler insurance plan, Two-wheeler liability only insurance, Standalone motor own damage cover-two- wheeler, etc.
   

• HDFC Ergo vehicle insurance policy provides coverage against accidental damages, thefts, and other manmade calamities.
• Coverage against third-party liabilities incurred for both i.e. person and vehicle.
• HDFC Ergo vehicle insurance policy provides personal accident cover.
• Add-ons coverage such as NCB cover, Engine protects cover, Key replacement cover, Emergency assistance cover, return to invoice cover, etc.
• Customer support is available always 24×7 for efficient query resolution of customers.
• Paperless and boundless work procedure.

1. Bajaj Allianz General Motor Insurance Policy
   Bajaj Allianz offers vehicle insurance policies for two-wheelers, four-wheelers, commercial vehicles, etc. The major features and benefits offered by Bajaj Allianz’s vehicle insurance policies are mentioned below.
   

• Instant online insurance policy purchase and renewal.
• Policyholders can avail NCB cover for around 20%-50% discount on insurance premiums.
• 24×7 customer support to assist in claim settlement and other issues related to the motor insurance policy.
• Cashless claims can be made at garages that come under the network of Bajaj Allianz.
• Several add-ons, emergency assistance cover, and good quality services.

1. Royal Sundaram Motor Insurance Policy
   Royal Sundaram is a popular name in the motor insurance market of India. Vehicle insurance policies such as two-wheeler insurance policy, commercial vehicle insurance, car insurance, etc. are some of the eminent insurance policies offered by Royal Sundaram.
   

• Coverage against natural calamities like a landslide, floods, fire, terrorism, etc.
• Coverage against accidents and other manmade calamities like terrorism, theft, burglary, malicious acts, etc.
• Personal accident cover is provided to the policyholders.
• Coverage for any third-party liabilities incurred.
• Cashless claims in network garages

Parameters that help you decide the premium:

Certain eminent parameters which help in determining the premium of your vehicle insurance are mentioned below.

1. Make, Model and age of the Vehicle
   The premium of the vehicle depends on the make, model and the age of the vehicle. The premium for motor insurance policy varies from one vehicle to another depending on the make of the vehicle. Since the models of vehicles are different from each other, the insurance premium is also different.
   Even petrol and diesel variants of the same vehicle have different insurance premiums.
2. IDV
   The Insured Declared Value or the IDV is the market value of a vehicle. The insurance premium is high for those vehicles which have a higher IDV.
3. Geographic location
   The insurance premium for vehicles belonging to those locations is higher where there are more risks associated with natural and man-made calamities.
4. Add-ons selected
   Additional covers increase the scope of coverage of the motor insurance plan. So, if you opt for add-ons, your vehicle insurance premium would increase.

How to reduce the premium for a motor insurance policy?

Let us have a look at some of the easy methods to reduce the premium for a motor insurance policy.

1. Installing anti-theft devices in vehicles
   By installing anti-theft devices in your vehicle, you are reducing the chances of theft of your vehicle. As your vehicle is not exposed to the risk of theft, your insurance provider will charge a lower premium from you.
2. No claim bonus (NCB)
   There are several discount options available on the premium of vehicle insurance. When you have a good claim history and you are selecting a comprehensive motor insurance policy, you obtain a maximum of 50% no-claim bonus (NCB) which helps you to reduce your premium.
   Tip: Do not claim for smaller claims, but save your NCB so that your overall premium would reduce.
3. Deductibles
   You can also choose to opt for the voluntary deductible as it will decrease your premium amount for a motor insurance policy.
4. Opting for riders carefully
   You should be wise while selecting your riders for the vehicle insurance. You should only choose those riders which will be helpful to you actually rather than selecting any random rider.
5. Compare policy online
   YYou should compare vehicle insurance policies offered by different insurance providers online to have an idea of the benefits offered by different policies and the premium prices.
6. Membership of AAI or WIAA
   If you are having a membership in AAI (Automobile Association of Upper India) or WIAA (Western India Automobile Association), you will have an opportunity to avail discount on vehicle insurance premiums.

With globalisation making the world small, businesses have crossed the geographical boundaries. Nowadays, businesses are not localised in nature. Manufacturers are selling their goods in other countries and exploring new markets for their products. That is why the transportation of goods from one place to another has become a common practice for almost all businesses. This is why cargo insurance becomes of utmost importance to most businesses.

Though transportation of goods helps businesses expand their market, the risks associated with such transportation cannot be ignored. If the goods are damaged in transit, the business incurs a heavy loss. To cover such losses suffered by businesses, marine insurance policies are available. These policies cover the damages suffered when goods are transported from one place to another.

Marine insurance is broadly divided into two parts – cargo insurance and hull insurance. While cargo insurance covers the goods being transported, hull insurance covers the transportation vehicle. Cargo insurance is relevant for businesses transporting goods and is, therefore, very popular. Let’s understand what cargo insurance is all about –

What is cargo insurance?

Cargo insurance is a type of marine insurance policy which covers the goods which are transported from one place to another. A cargo insurance policy usually covers the goods from their place of transport to the destination. The policy, thus, safeguards the business from the loss suffered if the goods being transported are damaged before reaching their destination.

Covered transportation under cargo insurance

A cargo insurance policy covers transportation through the following means –

• Water
• Air
• Road
• Rail
• Registered postal parcel
• Courier

You can also buy a policy for covering transport by more than one of the above-listed means.

Who can buy cargo insurance?

Cargo insurance can be bought by the following –

1. Merchants involved in importing and exporting of goods
2. Buyers of goods
3. Sellers of goods
4. Buying agents
5. Banks
6. Contractors, etc.

What is covered under cargo insurance?

Coverage under a cargo insurance policy is determined by the Institute Coverage Clause (ICC) which you buy with the policy. ICC is the standard coverage under cargo insurance which is accepted by all marine insurance companies. There are three types of ICCs which are as follows –

1. Institute Coverage Clause ‘C’This clause gives the basic coverage under a cargo insurance policy. The coverage includes only named perils which are as follows:
   
   1. Fire and/or explosion
   2. Overturning, collision or derailment of the transportation vehicle
   3. Jettison
   4. Discharge of the cargo at a point of distress
2. Institute Cargo Clause ‘B’This clause is wider than ICC ‘C’ as it covers the damages suffered due to the following perils:
   
   1. Perils covered under ICC ‘C’
   2. Earthquakes
   3. Lightning
   4. Volcanic eruptions
   5. Water seepage into the transport vessel or storage area
   6. Losses suffered when loading or unloading the goods
3. Institute Cargo Clause ‘A’This is also called ‘All Risk Cover’ as it includes all the perils due to which the goods can be damaged. The coverage includes the following perils:
   
   1. Perils covered under ICC ‘C’ and ICC ‘B’
   2. Loss due to rainwater
   3. Theft, pilferage or any other type of malicious damage
   4. Shortage, breakage or any type of partial loss
   5. Any other losses suffered by the cargo other than the excluded ones

You can choose any type of coverage clause but ICC ‘A’ is better because of the comprehensive scope of coverage that it provides.

Exclusions under cargo insurance

Though cargo insurance policies provide quite a comprehensive scope of coverage, there are some perils and instances of loss which are not covered by the policy. Common exclusions under marine cargo insurance policies include the following –

1. Damages suffered due to negligence and/or wilful misconduct
2. The loss suffered due to delay in transportation
3. Damages which occur when goods are not properly packaged
4. Perils like war, riots, civil commotion, strike, etc.
5. Costs incurred in removing the wreckage after a damage
6. Damages suffered due to biological, nuclear or chemical weapons
7. Damages due to radioactive contamination
8. If the charterers, managers, owners or operators of the vessel become financially insolvent and are unable to transport the goods, the consequent losses would not be covered
9. Inherent vice in the cargo which is certain to cause damage
10. Normal loss in weight of the cargo and leakage or breakage of goods
11. If the transportation vehicle is unseaworthy, i.e., not fit to transport the goods, but the vessel is used for transportation, consequent losses would not be covered

Important terms associated with cargo insurance

Marine cargo insurance policies have some technical terms associated with them which might confuse you. So, here are some common technical jargons simplified –

1. EXW (Ex-Works)The full form of EXW can be Ex-works, ex-warehouse, ex-place, etc. Under EXW cargo insurance plans, the buyer is supposed to collect delivery of the goods from the seller. Any damage to the cargo before the buyer collects it would be the liability of the buyer. As such, the buyer buys a cargo insurance policy on EXW to insure his liability.
2. FOB (Free on Board)FOB means Free on Board. FOB policies make it the seller’s liability for loading the goods on the ship. If the goods are damaged before they are loaded on the vessel, the seller would face a loss. That is why the seller buys a FOB cargo insurance policy for covering his liability. The seller’s liability is over once the goods are loaded. The buyer then needs to buy another policy to cover the risk of damage during transportation and unloading of the goods.
3. CFR (Cost and Freight)The full form ofCFR is Cost and Freight. If the seller pays the freight charge for booking the transportation vehicle, he incurs an additional cost. To cover this cost the seller buys CFR policy which pays the loss of freight in case the goods are damaged.
4. CIF (Cost, Insurance, Freight)CIF means Cost, Insurance Freight. If the buyer asks the seller to buy a marine cargo insurance policy from the seller’s warehouse to his warehouse, the seller can buy a CIF policy. This would be a single policy covering all the risks from the origin to the destination. The policy would belong to the seller until the goods are loaded onto the transportation vehicle. Once loaded, the ownership of the policy would change and the buyer would become the policyholder. Thus, a single policy would cover the risks faced by the buyer as well as the seller.
5. DDP/DAP (Delivered Duty Paid / Delivered at Place)DDP/DAP meansDelivered Duty Paid / Delivered at Place. These contracts are applicable if the buyer has superiority over the terms of transportation. Usually, in such situations, the sellers are required to transport the goods to the buyer’s place. Thus, the seller faces the liability of loss if the goods are damaged until they reach the buyer’s place. To cover this liability the sellers buy a DDP/DAP cargo policy and the buyers are not required to buy any plan since they don’t face any risk of loss in transportation.
   Cargo insurance plans can be a bit complicated if they are not understood properly. So, understand the policy in detail, its coverage clauses, perils covered and the important terms associated with it before you buy so that you know the coverage inside out.

Frequently Asked Questions:

1. Who is responsible to buy cargo insurance?A cargo insurance policy is to be bought by the buyer or seller depending on the liability faced by them.
2. Is inland transportation covered under cargo insurance?Yes, transportation of goods within India is also covered under cargo insurance.
3. What is the Institute Cargo Clause (Air)?This coverage clause is applicable if the goods are being transported by air.
4. Do cargo insurance policies provide extensions?Yes, coverage extensions are available under marine cargo insurance policies. Common extensions include the following –
   
   1. Costs incurred on loading and unloading of goods
   2. Customs duty
   3. Removal of debris after the loss has incurred, etc.

A two-wheeler insurance policy is a mandatory requirement if you own a bike. This mandate was passed under the Motor Vehicles Act, 1988 and includes all the vehicles running in India. So, if you own a bike, you are required to own a valid insurance policy on it too. Though a bike insurance policy is mandatory, there are ways in which you can keep premiums affordable. However, before going into the premium of two-wheeler insurance, let’s have a look into the types of policies available and the coverage that they provide –

Types of two-wheeler insurance plans

There are two types of coverage options which are available under two wheeler insurance plans. These are as follows –

• Third party liability coverage
  

Under this cover, the third party financial liability is covered which is incurred when you damage someone’s property or if any individual is physically hurt due to your bike. Third party liability coverage is the cheapest two wheeler insurance policy which is also mandatory as per law.

• Comprehensive package coverage

Under comprehensive coverage, there are two coverage components. One is the mandatory third party liability coverage which covers third party financial liabilities. The other is the  cover for the damages suffered by the bike itself. It is called own damage cover and it covers the cost of repairs incurred in getting the damage repaired.

In both the policies, there is also a personal accident cover which is also mandatory as per law. Under personal accident cover, accidental deaths and disablements suffered by the owner/driver of the bike are covered. In case of accidental death and disablement, a lump sum benefit is paid under the cover.

Additional coverage benefits in two wheeler insurance by add-ons

In comprehensive bike insurance plans, there are optional coverage benefits which are called add-ons. These add-ons help in increasing the scope of coverage of the policy. You can choose one or more add-ons as per your requirement. 

The popular add-ons which are available under two wheeler insurance plans include the following –

1. Zero depreciation  add-on

This add-on removes the deduction for depreciation in own damage claims. When you make a claim for damages suffered by your bike, the insurance company reduces the claim by the expected depreciation on the parts of the bike which are repaired or replaced. This reduces the overall claim amount. However, with the zero depreciation add-on, you can get full coverage without depreciation

1. Roadside assistance add-on

If your bike breaks down and needs assistance the insurance company promises this assistance any time under the roadside assistance add-on. You can get assistance for flat tyres, empty fuel tank, jumpstarting the battery, etc.

1. No claim protection add-on

A no claim discount is allowed if you don’t make claims in a policy year. This discount also accumulates with every claim-free year. However, if a claim is made, the entire accumulated no claim bonus is lost. The no claim protection add-on protects the bonus even if a claim is made

1. Personal accident cover for rider

This add-on extends the personal accident cover to the pillion rider as well

1. Medical expenses add-ons

Under this add-on medical expenses incurred in case of a road accident involving the bike are covered

Now that you know the coverage aspects of two wheeler insurance policies, let’s understand the premium aspects of the plan.

How are two wheeler insurance premiums calculated?

Premiums for two wheeler insurance policies are calculated using the following parameters –

1. Step 1: The type of policy selected

As stated earlier, third party plans are cheap bike insurance plans. They have limited scope and their premiums are determined by the Insurance Regulatory and Development Authority of India (IRDAI). So, if you choose third party plans, the premiums would be low. Comprehensive plans, on the other hand, have higher premium rates because they have a wider scope of coverage

1. Step 2; Make, model and variant of the bike

The make, model and variant determine the value of the bike. Higher the value, the higher is the premium rate and vice-versa

1. Step 3: Year of manufacturing
   

The year of manufacturing determines the age of the bike. As the bike ages, its value reduces and the premiums go down. Thus, older bikes have lower premiums than newer ones

1. Step 4: Location of registration

The place where your bike is registered also affects the premium rates. Premiums rates are higher if the registration is done is metro cities than in non-metro ones

1. Step 5: Status of an existing policy

If you are renewing your two wheeler insurance plan, the premium would depend on the status of your existing policy. If your policy has expired, the premiums would be high.

1. Step 6: Premium discounts available

There is a range of premium discounts in two wheeler insurance plans. These discounts affect the premium. The higher the discounts available the lower would be the premium payable. The discounts can be for choosing a long term policy, for installing safety devices in the bike, for choosing a voluntary deductible or if you have a no-claim bonus in your policy.

How to get cheap bike insurance premiums?

Now that you know how premiums are calculated for two wheeler insurance policies, there are ways in which you can opt for cheap bike insurance plans. Let’s understand how –

• Look for discounts

As mentioned earlier, premium discounts are available in two wheeler insurance plans. Look for these discounts and try to opt for as many discounts as you can. The higher the discounts that you avail the cheaper your bike insurance premium would become.

• Use your no claim bonus discount

If you have not made claims in previous policy years, you are eligible for a no claim discount. No-claim discount ranges from 20-50%.

• Don’t make small claims

Claims wipe out your no claim bonus which gives you a discount on the renewal premium. So, if possible, try and avoid claims which are of a small amount. Pay for these claims from your own pockets to get cheap bike insurance premiums.

• Choose voluntary deductible

Voluntary deductible is the part of the claim which you opt to pay yourself. In case of a claim, you would have to pay the chosen limit of voluntary deductible and the insurance company would pay the rest. Since voluntary deductible reduces the burden of claim from the insurance company the company offers a premium discount. So, if you are a careful driver and don’t face too many accidents, choose a voluntary deductible to lower the premium.

• Opt for a suitable type of policy

Comprehensive plans are the best for an all-round coverage for your bike. However, if you don’t use your bike very often or if the bike is very old you can opt for only a third party liability cover. Since the cover gives you the cheapest two wheeler insurance premium you would be able to save money

• Choose add-ons which are useful

Bike insurance policies have a lot of available add-ons which you can choose from. Though the add-ons increase coverage too many of them would unnecessarily increase the premium. Assess your coverage needs and then select only those add-ons which you require.

• Renew on time

Expired policies are always dearer to renew than in-force ones. So, don’t let your existing two wheeler insurance policy lapse. Renew your policy on time every time so that you get low premium rates.

• Compare before buying

More than a dozen general insurance companies offer two wheeler insurance plans and each plan has a different premium rate. So, always compare the plans before buying. Compare the coverage vis-à-vis the premium and choose a plan which offers the best coverage features at the lowest premium rates.