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Know about the Exemptions of a Car Insurance Policy

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A car insurance company definitely tries to highlight what it will cover during in an insurance but often fails to mention explicitly what it will not cover. The exemptions are mentioned in the document of course but they are written in such a manner that the policyholder often misunderstands them or misses them altogether. It case the auto insurance covers third party motor insurance as well as own damages cover, then it is all the more important to go through the terms and conditions.

Here are the Exemptions of a Car Insurance Policy:-

  • According to Motor Vehicles Act, a third party insurance is mandatory for all vehicle owners and it covers only the legal liabilities for the damage that are caused due to a third party like physical injury, death and damage to third party property when the vehicle is in use. The third party cover does not pay for the repair of damage to the car or if one suffers any injury themselves.
  • Then there is the Own damage cover. Although it is touted as non- compulsory, it pays for the damage or theft to your own vehicle and so it is important to understand this clause properly. There are certain exemptions under this when the damages will not be paid.
  • The damages will not be covered when the policy is not in force and this is why it is important to renew the policy on time. It should be renewed without break as any damage that would occur after the policy has lapsed and before it has been renewed, would not be covered.
  • In case the insured person, or any of his acquaintance has been driving under the influence or alcohol or drugs, the losses would not be covered or in case the person driving does not have a valid license.
  • In case the engine was damaged due to oil leakage or in case of violation of the car manufacturer’s guidelines that has resulted in car failure.
  • Similarly, any damage to the car that has occurred due to deliberate manhandling of the car or damages caused by radiation, civil war, terror attacks, etc are also not covered. In case the damages had occurred as a consequence of some action of the policyholder or the third party, whether intentionally or accident, and not as an outcome of an uncertain event, will also not be covered. For example damage to the car that occurs during the water getting into the car in the monsoons is a common consequence of not parking the car in the right place.
  • The policy will also not cover any contractual liability that the insured person might have towards the asset. This happens when the insured person has entered into a written contract with someone for a time period, when the other person will be driving the car. In case any damages occur at that time, they will not be covered. However, if the damages occur when the insured person is himself driving the car, in spite of the liability, the damages would be covered depending on the other terms and conditions.
  • If the initial claim is rejected by the insured person and the matter is not taken up in court within the first 12 months, then the claim will never be recovered at any point after that and the matter would be closed for good.
Also Read:  Role of Deductible and Co-Pay in Health Insurance Policies

Shailesh Kumar

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