Going through policy wordings is the most boring but essential task you have to do while buying an insurance policy. Read through those asterisk marks and terms & conditions can be cumbersome and confusing. But that's the place that contains major exclusions in the policy and understanding them is extremely important. Let's look at these exclusions which we usually ignore will buying the policy
1. Your personal belongings
If your car is vandalized or damaged, then your personal belongings like a laptop, other valuable, etc will not be covered in case they are damaged or stolen. However insurer will cover the damages to your car. What is inside the car doesn't matter to insurers.
3. Timely Renewals
It's important to renew your motor insurance on time as you can lose a lot of accrued benefits with the insurer if your vehicle stays uninsured for a long time. For example, if your vehicle remains uninsured for more than 90 days, you will lose the No-claim bonus (NCB) benefit that can be as high as 50%. NCB benefit basically gives a discount on your premium for every claim free year and successive claim free years increase this discount. Another important aspect of missing your renewal deadline is that insurer will insist on a physical inspection of your vehicle before renewal. You will have to go through the hassle of arranging a physical visit by a surveyor from insurance company.
4. Benefits are tagged to policy holder, not the car
And also NCB is tagged to the policyholder and not to the vehicle. You can transfer it to a new vehicle which you have bought at any time. People assume that benefits will accrue to them if they renew an insurance on a newly bought second hand vehicle.
4. Accident Cover
Most policies comes with a basic accident cover for the driver of the vehicle. So in case of an accident, passengers other the driver are not covered. So be sure to get an extended accident cover for passengers if you need one. This becomes specially important if its a family with young kids or a chauffeur driven car.
5. Doesn't cover natural calamities
The act of Gods are not covered by insurance and come under permanent exclusions. In case your vehicle gets damaged during earthquakes, tornadoes, floods etc. insurance company is not liable for the payment of the damage caused. If you stay in a natural calamity prone area then do read policy document to see if they are covered or not.
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