In India, most people prefer an annual or long-term policy and do not like to give insurance much thought. Temporary car insurance is still quite a new concept in India and many are unaware of it. A proposal has been made to the Insurance Regulatory and Development Authority of India (IRDAI) asking them to popularize and bring this policy into the mainstream market. In this article, we help you understand what short-term car insurance is and how it works.
Who Can Opt for Short-Term Car Insurance
● Individuals who are new drivers can use this during driving lessons. Since people who just start learning are more prone to accidents, they require this insurance
● A person who has hired a car for a short while can get this policy
● A person who rents a car during vacation can use this policy in case there is a sudden accident during the vacation rental.
● People who drive occasionally or those who are driving after a long gap
● Individuals who regularly buy and sell cars and do not have one car for a long time
● An individual who has just bought a car and is trying to choose an apt insurance cover can buy temporary car insurance until they zero down on a long-term insurance policy
Features of Short-Term Car Insurance
● A short-term car insurance policy can last from 1-6 months and will offer all the benefits that a comprehensive car insurance policy offers
● Some insurance companies allow policyholders to add vehicles to the short-term policy but, the premium to be paid will also increase accordingly
● Since this is not very common in India, it is hard to find insurance companies that provide this policy and mostly one may find that this is expensive when compared to the conventional comprehensive car insurance policies
● The IRDAI has mentioned no fixed premium rate for this kind of policy and the price differs depending on various factors and insurance companies. Some of the factors that are considered to fix a premium rate are:
o Place that the vehicle is used
o Mileage one achieves
o Purpose of use
o Driving License
o Make and model of the car
Benefits of Short-Term Car Insurance
● Coverage for third-party injuries or death of another individual
● Coverage for third-party property damage
● The policy is offered immediately
● Personal accident cover is offered in many insurance companies
● Some insurance companies offer to repair dents, scratches, alloy wheels, misfuelling, etc.
● 24x7 customer support
Types of Short-Term Car Insurance
GAP Insurance – Guaranteed Auto Protection insurance is for a car bought on a lease or loan
Rental Car Insurance – Covers accidental damage or injuries caused to a rental car and its passengers
Non-Owner’s Insurance – Similar to rental car insurance but, it is offered to private cars that are hired from a family or a friend
Car insurance is mandatory for all car owners and those who drive. Make sure you have either a comprehensive car insurance or own-damage car insurance for your vehicle. To know more about car insurance policies, click here. In case one does not depend on their car for the daily commute, or they do not drive often, a short-term car insurance policy can be taken for the time that the vehicle is used.