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: If the insured has not made any claim during the policy year, then s/he will be eligible for No Claim Bonus, which is a discount that is given to the insured while renewing the policy.

Please do read the policy terms and conditions for details.

Ans: Hi Prasanna, long term insurance is only mandated for new vehicle as per IRDAI. In a long term policy, 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 a one year tenure motor policy, you will lose your NCB (no claim bonus) after claim which will increase the premium at the time of renewal.

Ans: There are certain factors to look at while choosing a company for term insurance as the company has to stay for 100yrs from today to give you benefit of your insurance.
You should look at the customer service history, solvency ratio, claim settlement ratio, etc
Term insurance cover should be decided on factors like your family's monthly expenses as in how much they would require every month to survive, your liabilities and your current liquid assets.
A person can get up to 30times of their salary depending on their age

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.