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A Complete Guide How Motor Insurance Works?

When things go wrong while you are driving, motor insurance will be a lifesaver. It protects the driver from the financial loss that can occur during an unfortunate accident. Based on the coverage purchased, this can also extend to third party damage. Car insurance is essential and required by law to have, when operating a motor vehicle.

What Type of Coverage?

Going with the cheapest coverage won’t get you the best results.  Go through the coverage options and find out what you need the most. At the very least, damage to your vehicle should be minimum for motor insurance to cover. When going above the bare minimum, insurance covers third party damage, theft, and provides extensive personal accident coverage. Premium plans even go so far as to protect your car against natural disasters.

For vehicle insurance in India, natural disaster protection is strongly recommended. You never know when something will happen that could damage your automobile.

Things to Consider

A motor insurance policy will clearly outline things that are not covered under the current contract. Usually, that includes damage due to age, damage caused by an unlicensed driver and damage outside of India. That is a small sample, as each company will have their own set of rules listing requirements for coverage.

Go over this information carefully so that you do not have to spend out of your pocket for any untoward incident. Use a car insurance premium calculator to get a good idea of what you may pay for a policy. Use the final figure to narrow down the most important features of a motor insurance contract.

Reducing Your Premium

Several different things will decide the motor insurance premium. They are weighed differently, so one company may value one over another. Below are few things that contribute to a premium, so pay close attention when shopping for a new policy.

Vehicle Value – The more your car costs, the more your premium will be. This is logical, since any damage is going to be significantly higher with a more expensive vehicle. A high premium for an expensive car does not necessarily mean it has more coverage.

Claim History – If you have a history of bad insurance practices then your new insurance policy will be higher than the average. Keep a clean record to ensure that the cost of a new policy remains competitive.

Also Read: Make a Wise Choice for Car Insurance for Young Drivers


Motor insurance is a simple way to protect one of the most expensive purchases of your life. Don’t make the process complicated and stay away from insurance scams that are too good to be true. Read the contract thoroughly before signing the dotted line and you’ll be in good hands.

William Frazier has researched marketing and writing trends for several years. He believes that depth is the core of all writing, making the first layer just as important as the last. His primary goal is to transform viable research into easy to read subject matter.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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