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Sanjib

Sanjib Jha  | Answer  |Ask -

Insurance Expert - Answered on Feb 02, 2023

Sanjib Jha is the CEO of Coverfox Insurance. His expertise includes health and auto insurance. He has over 22 years of experience in the financial sector. He has completed his post-graduation from the Institute of Company Secretaries of India.... more
Prasanna Question by Prasanna on Jan 18, 2023Translate
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Dear Sanjib, why do motor insurance companies insist on buying three and five year cover instead of one year? How do consumers benefit from ling-term vehicle insurance? If one buys 5-year cover and files for claim in the 2nd year then how is claim settled and after that does cover remain valid for the next three years? Regards

Ans: Hi Prasanna, Long Term insurance is only mandated for new vehicle as per IRDAI.
In Long Term policy (3+3), a standard agreement is signed due to which the policy's premium will remain unchanged whether you claim in the policy or not.
However in single year motor policy, you will lose your NCB (no claim bonus) after claim which will increase the premium at the time of renewal.
If a person claims in a five year tenure policy, the process of claim will be standard. Post claim, the coverages & premium will remain unchanged.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Sir, my question is regarding auto insurance. What is the difference between comprehensive cover and non comprehensive cover in auto insurance? Which insurance should I buy? Which insurance will take better care of my vehicle insurance needs?
Ans: To help you understand the difference between comprehensive and non-comprehensive (commonly known as third-party) auto insurance, and guide you which auto insurance might be more suitable for your needs, here are some points to consider.

Comprehensive Cover:

• Coverage: Comprehensive insurance provides coverage for a wide range of incidents, including damage to your own vehicle due to accidents, theft, natural disasters (like floods or earthquakes), fire, vandalism, and other non-collision events.

• Third-party Coverage: In addition to covering damages to your own vehicle, comprehensive insurance also includes third-party liability coverage. This means it provides protection against any damage or injury caused to third parties (other people or their property) by your vehicle.

Non-Comprehensive (Third-Party) Cover:

• Coverage: This type of insurance primarily covers damages and injuries caused by your vehicle to third parties. It does not cover damages to your own vehicle in the event of an accident or other non-collision incidents.

• Legal Requirement: In many places, having at least third-party insurance is a legal requirement. It ensures that if you cause harm to others or their property, there is coverage to compensate for those damages.

Choosing the Right Insurance:

• Comprehensive Cover: If you want more extensive protection for your own vehicle and want coverage for a broader range of events, comprehensive insurance is the better choice. It provides peace of mind knowing that you are covered not only for accidents but also for theft, natural disasters, and other unforeseen circumstances.

• Non-Comprehensive (Third-Party) Cover: If you are looking for a more budget-friendly option and are willing to bear the cost of repairing or replacing your own vehicle in case of an accident, third-party insurance might be suitable. However, it's important to note that this option doesn't provide coverage for damages to your own vehicle.

Ultimately, the choice between comprehensive and non-comprehensive insurance depends on your individual needs, budget, and the level of coverage you desire. If you can afford it, comprehensive coverage is generally recommended for more comprehensive protection. Always review the policy terms, conditions, and coverage limits before making a decision. Additionally, consider consulting with insurance professionals or agents to get personalised advice based on your specific situation.
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I'm contemplating a career change in my late 30s, earning Rs 14 lakhs annually. How can I navigate this transition while ensuring financial stability and working towards long-term goals such as retirement?
Ans: Transitioning to a new career in your late 30s while maintaining financial stability and planning for long-term goals like retirement requires careful consideration and planning. Here are some steps you can take to navigate this transition effectively:

1. Assess Your Skills and Interests: Reflect on your skills, interests, and values to identify potential new career paths that align with your strengths and passions. Consider seeking career counseling or taking career assessment tests to explore different options.

2. Research Potential Careers: Conduct thorough research on the industries and roles you're interested in pursuing. Look into job market demand, salary potential, and growth opportunities to ensure your chosen career path is financially viable.

3. Skill Development and Education: Determine if you need to acquire new skills or education to transition into your desired field. This could involve enrolling in courses, obtaining certifications, or pursuing higher education such as a degree or specialised training programme.

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7. Health Insurance and Benefits: Evaluate the health insurance and other benefits offered by your new employer, if applicable. Ensure you understand the coverage provided and any associated costs. If transitioning to self-employment or freelancing, research options for obtaining health insurance coverage independently.

8. Networking and Building Connections: Network with professionals in your desired industry to gain insights, advice, and potential job opportunities. Attend industry events, join professional associations, and leverage online networking platforms like LinkedIn to expand your network.

9. Side Hustle or Freelancing: Consider starting a side hustle or freelancing in your desired field while maintaining your current job. This can provide additional income, valuable experience, and a smoother transition into your new career.

10. Evaluate Risks and Rewards: Assess the risks and rewards associated with your career change, including potential income fluctuations, job stability, and work-life balance. Be prepared to adapt and make adjustments as needed throughout the transition process.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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