IRDAI’s new rules would reduce your out-of-pocket expenses. Here’s how

Health insurance plans prove to be a blessing in times of medical emergencies when expensive treatments and hospitalisation might blow a hole in your finances. Health plans cover your hospitalisation expenses as well as the costs of treatments sparing you the financial burden. 

The Insurance Regulatory and Development Authority of India (IRDAI) constantly makes changes in the rules and regulations governing health insurance plans to make the plans more customer-friendly. Recently, IRDAI has made new guidelines for the concept of ‘proportionate deduction’ which is applicable under plans with room rent sub-limits. Before having a look into the recent changes made by the regulator, let’s understand the concept of proportionate deduction and how it works.

Sub-limits on room rent

Under many health insurance plans, especially when the sum insured is up to INR 5 lakhs, there are sub-limits on room rent covered under the policy. This sub-limit is expressed as a percentage of the sum insured and ranges between 1% and 2% of the sum insured. For example, if the sum insured is INR 5 lakhs and room rent sub-limit is 1% of the sum insured, the applicable limit would be INR 5000/day.

Proportionate deduction – the concept

Many hospitals have preferential pricing for treatments and doctor’s fee depending on the type of room that they are admitted. If you are admitted to a suite room and undergo an appendectomy, its cost would be higher compared to the same treatment taken in a normal room. So, since hospitals price their costs based on the room rent, health insurance companies do not want to pay higher claims for rooms with higher room rents especially when there is a specific sub-limit on the rent under the plan.

The concept of proportionate deduction, thus, becomes applicable if your actual room rent exceeds the specified limit. If your actual room rent is higher than the allowed limit, the insurance company does not pay the full cost of inpatient hospitalisation. It reduces the bill proportionately to the cost which would have incurred had you taken treatments in a room within the allowed room rent. Let’s understand with an example –

Say for a plan with a sum insured of INR 5 lakhs, the room rent limit is 1% or INR 5000. If you seek treatment in a room whose rent is INR 6000 and incur a total hospitalisation bill of INR 1.5 lakhs, the claim payable would be calculated as follows –

INR 1.5 lakhs * (5000/6000) = INR 1.25 lakhs

Thus, even if the claim is within the sum insured, the amount would be proportionately reduced to arrive at a figure proportional to the allowed room rent. Any excess costs incurred, i.e. INR 25,000 in the above example, would be borne by you and become your out-of-pocket expenses.

What has changed?

IRDAI has made two important changes in the concept of proportionate deduction in health insurance plans. These changes are as follows –

  • Costs included under proportionate deduction

    Earlier, health insurers considered the total inpatient hospitalisation bill when calculating the proportionate claim payable. However, in the recent guidelines, IRDAI has eliminated some medical costs from the purview of proportionate deduction. The following costs would now no longer be considered in the hospitalisation bill when doing proportionate deductions – 

    • Pharmacy costs
    • Costs of medical implants and devices
    • Cost of diagnostic tests
    • Consumables 

    Other hospitalisation costs would be considered when calculating the proportionate amount of claim thereby reducing your out-of-pocket expenses.

  • Non-applicability of proportionate deduction 

    According to the guidelines specified by the IRDAI, if hospitals do not have different room rents for different rooms, the concept of proportionate deduction would not apply. In that case, if the actual room rent is higher than the sub-limit, the total inpatient hospitalisation claim would be paid by the insurance company without any deduction.

Furthermore, if the insured is admitted to the ICU, the concept of proportionate deduction would not be applicable because ICU rent is fixed and does not change with the type of room you are admitted into.

Implementation of the change

These changes would be made effective for all new health insurance plans bought on or after 1st October 2020. For existing policies bought before 1st October 2020, the changes would be effective from 1st April 2021.

What the changes mean for you?

As specific costs are being excluded from the computation of proportionate claim, you would get full coverage for such costs irrespective of the room rent. Moreover, if you seek admission at hospitals where there are no different room rent categories or in case of ICU admissions, proportionate deduction would not apply. All these aspects would increase the claim amount payable and reduce your out-of-pocket expenses thereby making health plans more pocket-friendly.

The rules are, therefore, a welcome change for health insurance customers and might even drive the sale of new health plans. Your health plan has just become better and you should know these changes to know the expected out-of-pocket expenses when claims occur.

Now get reward points in your Health Insurance plan for staying fit

The trend of healthy living has gone viral. Many of you opt for organic food, go for walks, practice Yoga, Zumba or Pilates and/or opt for a balanced and nutritious diet. While healthy living helps you stay fit, now, you can also get rewards in your health insurance plans for your heathy efforts.

Earlier, some health insurance policies were rewarding you for practicing healthy habits. For instance, HDFC Ergo Health’s Optima Restore and Easy Health Plans have a Stay Active Benefit which gives you a premium discount if you take a specified number of steps in a policy year. Now, the Insurance Regulatory and Development Authority of India (IRDAI) has asked all health insurance providers to design health plans with wellness benefits. IRDAI has asked companies to reward their customers for practicing a healthy lifestyle. Let’s have a look at what the IRDAI guidelines state –

Health rewards being promoted by IRDAI guidelines

IRDAI has asked insurance companies to provide one or more of the following benefits to policyholders –

  • Cover for preventive healthcareCosts included in preventive healthcare are usually incurred on an outpatient basis. They include doctor’s consultations, health check-ups, pharmaceuticals, diagnostic tests as well as outpatient treatments. IRDAI has asked insurance companies to offer coverage for these OPD costs so that customers can track their health regularly. Insurers might offer such coverage at networked or empanelled hospitals. Alternatively, rather than covering such costs insurers can also allow discounts on the expenses if the same are incurred at specific hospitals.
  • Wellness benefitsHealth insurance companies can issue vouchers to customers that can be redeemed on health supplements or on buying memberships of fitness clubs and centres. Moreover, if the insured member practices a wellness program during the policy tenure, a premium discount might also be allowed at the time of renewals.
  • Coverage for excluded costsSome medical costs are not covered under inpatient hospitalisation which incurs out-of-pocket expenses for customers. IRDAI has urged insurance companies to cover such excluded costs as a part of a wellness program which they might start in their plans.

Insurance companies are free to choose the wellness benefit which they want to offer their customers. IRDAI has asked companies to mention the details of their wellness programs in plan brochures so that customers can find out the wellness rewards when buying the policy. These wellness benefits can also be offered either as an inbuilt benefit or as an add-on depending on the insurer’s practices.

Objective behind the new guidelines

In these new guidelines being pushed by the IRDAI, there are two main objectives. The first one is to promote the concept of healthy living among individuals. With the incentive of the reward program, IRDAI believes that policyholders would become mindful of their health to avail wellness benefits from their health insurance plans.

The second objective is to improve the claim experience of the insurance company. As individuals start practicing healthy living and take care of their health, the probability of claims due to illnesses would reduce. This would help insurance companies reduce their claim liabilities and improve their profitability. This improved profitability would, in turn, allow insurance companies to offer cheaper premium rates and more benefits to policyholders.

Thus, IRDAI’s benefits are beneficial for you, the customer, as well as the insurance company. In fact, you would become more health-conscious and start taking care of your health as health plans promote wellness benefits. Your lifestyle would improve and you would also get additional benefits from your health insurance plan. So, while the new guidelines are good for the insurance company, they are better for you, the customer, as they give you better benefits and might also reduce your health insurance premiums.

Complete Information on How to Transfer Vehicle Ownership

Are you looking to sell off your car and buy a new one? You are aware of whom to contact for selling but not sure about how the Transfer of ownership will take place? Is it something which is very difficult? Well, certainly not, the process of Transfer of ownership is simple and easy and all you need to know is why it is important and under what circumstances with the procedure of doing the same. Transfer of ownership of vehicles or a Registration Certificate Transfer is significant as it safeguards the vehicle and all the lawful obligations are being shifted to the purchaser. Transferring of the ownership would imply shifting the car owner’s name from your name to the buyer’s name or transferring the title of the vehicle from one owner to the other owner Transfer of ownership is obligatory under Indian law of Motor Vehicle Act, 1988. A transfer of ownership of the vehicle is indispensable to avoid any problems and complications in future about vehicle registration, insurance policies, etc. Transfer of ownership helps both the seller and the buyer or in some cases only the buyer to have a clear Registration Certificate book with no disputes. Hence, you must abide by this law of transfer of ownership, follow the necessary process or steps without fail to have a smooth sail of the vehicle. There may be several situations (discussed as below) where the ownership of the vehicle needs to be transferred from one person to the other. Let us have a comprehensive view of the process of transfer of ownership of vehicles or the two-wheeler.

You must remember that when you are selling your vehicle, it consists of two parts and hence

  • The 1st one is Transfer of ownership of the vehicle
  • The 2nd part is Transfer of the vehicle insurance policy- This is important as because you will not be in a position to claim insurance if need be in future

Situations for where Transfer of ownership is required:

  1. Transfer of ownership when you are selling off the car to another buyer

    As soon as the vehicle is sold off, the name of the buyer is recorded as the registered owner instead of the earlier registered owner and this is the process called and named as the transfer of ownership.

  2. Transfer of ownership upon the death of the owner of the vehicle

    As soon as the registered owner of a vehicle dies, transfer of ownership is effective in the name of the legal heirs of the expired registered owner and the usage of the vehicle can be for a period of 90 days within 30 days from the date of death of the owner.

  3. Transfer of ownership in auction

    When a vehicle is sold in public auction, the name of the buyer is recorded as a registered owner instead of the earlier registered owner and once again this is the process called and named as the transfer of ownership.

Process of Transfer of Ownership of vehicle or the two-wheeler

The steps of how to transfer vehicle ownership can be summarized as below:

⮚ If you are a buyer you will have to submit the application form for transfer of ownership of the two-wheeler at the same RTO department where from the vehicle or the two-wheeler was earlier registered when you bought it the first time

⮚ You will then have to submit the form no 29* and form no 30** at the Directorate of Transport office with additional documents in original like the insurance details, RC, receipts of tax paid, address proof of the seller, photograph of passport size, etc.

⮚ After all the necessary inspection is completed by the RTO, the ownership and insurance-related papers of the vehicle will be transferred to the new buyer within 14 days

⮚ If the buyer and the seller are from the same state, the buyer will provide all the required details of the transfer to the registration office within two weeks’ time. On the other hand, if the buyer and seller are living in different states, then the buyer will have to notify the registering authority within 45 days about the forms and related documents for the transfer of vehicle

⮚ If the seller of the two-wheeler dies the buyer of the vehicle must inform the authority of registration with the necessary forms and related documents for the transfer of vehicle with the certificate of death. of the buyer can now go ahead and apply for the transfer of ownership within 3 months of the death of the seller.

Now that we have understood the process of Transfer of Ownership, let us see the related documents which are needed for this process and also the other additional documents needed under various situations as mentioned above

List of documents required for Transfer of Ownership

The below list of documents is mandatory and is needed to complete the Transfer of Ownership properly:

  1. Certificate of Registration:

    This is a compulsory document for the Transfer of Ownership process. The seller has to give this certificate of registration to the buyer. This document basically confirms and endorse the fact that the vehicle belongs to the seller.

  2. Pollution Certificate or PUC:

    Again, a compulsory document to confirm that vehicle or the two-wheeler has followed all the necessary rules related to the pollution control and is PUC**** certified.

Certificate of Insurance: A mandatory document for all the vehicles. The RTO office will not allow any registration without a valid Certificate of Insurance. The insurance policy will also have to be transferred in the buyer’s name and to complete the process of transfer the insurance certificate is essential. And while buying the vehicle, the insurer should be communicated so that the insurance policy can be transferred in the buyer’s name

List of other documents essential for Transfer of Ownership in case of a usual buying and selling:

We know by now that there are 3 mandatory documents needed for Transfer of Ownership, however, there are other documents as well which are needed when you are buying or selling the vehicle. Let us have a look at the below documents which are required under various situations of Transfer of Ownership

  • Original Registration Certificate
  • Form no 29* filled and signed by the seller of the vehicle
  • Form 30 **
  • If the buyer and seller are living in different states, then at that time, you will have to provide the No Objection Certificate of the entry tax for that state. An important point to note is that in the case of moving the vehicle from state to the other, the vehicle should not be more than 30 months old
  • If the seller had bought the vehicle through a loan, and the loan is continuing at the time of selling the vehicle, then a No Objection Certificate or NOC from the lender will also be required. The respective bank or the financial institution should issue the No Objection Certificate which is needed to be submitted to the registering authority at the time of transfer
  • Copy of the attested certificate of insurance
  • Copy of the attested address proof of the purchaser
  • Attested Certificate confirming about the vehicle or the two-wheeler’s pollution clearance status
  • Fee for transfer of ownership
  • Copy of attested PAN Card or Form 60 and 61 as appropriate

Documents to be submitted in the case of Death of the Owner:

If the of the vehicle dies, the buyer will have to submit the documents as mentioned below for the transfer of ownership

  • Form number 30- application for notification of transfer has to be completed carefully with the correct details with a chassis label
  • Form number 31 application for transfer of ownership in case of the death of the seller
  • Form TCA, TCR (for only transport vehicle)- TCA- This is an intimation of transfer by the buyer and TCR- An intimation of transfer by the seller. Since the seller has died, the buyer has to submit the death certificate to the RTO
  • If the owner has expired, then a certificate of death needs to be presented
  • Important documents, for example, a succession certificate, affidavit from the former owner of the vehicle or the two-wheeler and the No Objection Certificate from financier is needed as well
  • Documents or receipts related to the fee for the registration of the vehicle or the two-wheeler
  • Original RC, emission test for pollution, documents for insurance, receipts of tax payment, photographs- passport size, proof of address of the seller, etc.

How to transfer Insurance Policy after the vehicle is transferred?

By now, you must have got clarity about Transfer of Ownership, how the process flow is and the documents related to it. Your next question: how should I transfer insurance? Are there any legal implications if I miss transferring the insurance? Well, it is very crucial that you transfer the insurance as well to avoid any kind of dispute in case of an accident, otherwise you will not get the claim. The steps are simple and easy to follow:

Step 1- Intimation to the insurance company and obtaining a No Claim Bonus Certificate

Once you inform the insurance company about the selling of your vehicle and transfer of ownership, the insurance company will proceed to transfer your insurance. Remember, that you must get an NCB retention certificate from the insurer in case you have no claim bonus in your name and you can still retain the bonus while selling off your vehicle thereby using the same for your new car. You need to submit certain important documents mentioned below:

Ø A request letter for cancellation of the insurance policy

Ø Policy Document in original

Ø Insurance certificate

Ø Form 29*

Ø Form 30**

Ø Registration Certificate copy

Ø Proof of delivery to the buyer

Step 2- Transfer of the insurance policy

After the 1st step, you need to submit the following set of documents for transferring the policy

Ø The modified Registration Certificate with form number 29*

Ø Policy document

Ø No Objection from the seller which is you

Ø Application form for the new policy

Ø Copy of the inspection report which is done by the insurer

Ø The variance between the original premium and the new premium post no claim bonus

You must be wondering about the charges for transfer of ownership which needs to be paid to the RTO. Here is a quick view of the same.

Two-wheeler ownership transfer fees:

Type of Vehicle

Amount (INR)

Light Motor Vehicles for Transport

500

Light Motor Vehicles for Non -Transport

300

Medium Goods for passenger vehicles

500

Medium Goods for passenger vehicles

750

Medium Vehicle for goods

500

Heavy Vehicle for goods

750

One can know the vehicle transfer status easily from the site named  https://parivahan.gov.in/rcdlstatus/ by just putting the registration number and entering a code for verification.

Always remember to transfer the vehicle ownership together with insurance while selling the car, this is not only mandatory as per the law but also advantageous to you if you are selling the buyer as well as the buyer. Let us have a hassle-free and a smooth possession of vehicles and drive freely and safely

FAQs

  1. I have bought a car lately but the insurance of the car expired before transferring the ownership in my name? What should I do now?

    You need to renew the insurance policy in the name of the initial or the first owner and then put an application for transfer of the RC after which when the RC will reflect your name, then only you can transfer the insurance.

  2. I am from Mumbai and I want to purchase a used car from another state? Will I be able to buy it?

    Yes, you can, however, you will need the No Objection Certificate from the preset RTO where the initial registration has taken place with the seller agreement, form 29 * and form 30** signed by both buyer and the seller.

  3. I purchased a car a year back. The first owner in the same State has also given the No Objection Certificate, but I missed transferring the same in my name. Now I want to sell off the car, can I do that?

    No, you will not be allowed to do that. You need to have the transfer done in your name for you to sell the car.

  4. Is a No Objection certificate needed if I wish to transfer the ownership within the same RTO?

    The initial and the first owner’s No objection Certificate will be needed to do the transfer of ownership in the same RTO.

  5. What is the time frame for transferring vehicle ownership?

    The time is usually 10-15 working days after all the necessary documents are submitted.

Complete Information on How to Transfer Two-Wheeler Ownership

Buying a second-hand bike is quite common in today’s age. A second-hand bike is more affordable and it also fulfils your conveyance needs. That is why the used vehicle market is growing as sellers sell off their existing bikes to buy newer models or to invest in a car and buyers looking for affordable options buy them. While buying and selling used bikes has become easy in today’s times, you should know the process of transferring the ownership of the bike. As long as the used bike is not transferred from the name of the seller to the buyer, the purchase process is not complete. Thus, it becomes necessary to understand how the ownership is transferred if you sell or buy a used bike.

A transfer of ownership not only completes the process of buying a second-hand two-wheeler, but it is also essential to avoidany future problems and difficulties concerning registration of the vehicle, insurance policies for the vehicle, etc. Moreover, the Motor Vehicles Act, 1988 also mandates the transfer of ownership if the bike is bought and sold second hand. So, let’s understand the process of Bike Ownership Transfer in detail.

Process of Bike Ownership Transfer

For the purpose of Bike Ownership Transfer, you should take the following steps –

  • If you are the buyer you are required to submit an application form for transferring the ownership of the two-wheeler. This form should be submitted to the same RTO office where the two-wheeler or bike that you are buying was previously registered
  • You are, then, required to submit two forms at the Directorate of Transport office. These forms are Form 29 and Form 30. Form 29 is a No Objection Certificate which should be signed by the seller stating that the seller has no objection in transferring the ownership to the buyer. Form 30 is the report or intimation of transfer of ownership. This form should be filled by you, the buyer as well as the seller and it would contain the signatures of both parties. Along with these forms, you would also have to submit certain documents like tax paid receipts, insurance, RC, proof of address of the seller, a photograph of passport size, etc. All these documents should be submitted in original
  • Once all the necessary verification process has been done by the RTO, the ownership documents and the insurance documents of the two-wheeler would be transferred to the buyer within 14 days
  • If the buyer and seller of the bike live in the same State, the buyer would have two weeks’ time to submit the forms and documents for transfer to the concerned RTO. On the other hand, if the buyer and the seller live in different States, the forms and documents for the transfer of the vehicle should be submitted within 45 days
  • If the seller of the two-wheeler dies, the buyer should inform the RTO about the death of the seller. The death certificate should be submitted along with the forms and documents of transfer of ownership. The buyer can, then, apply for Bike Ownership Transfer within 3 months of the death of the seller.

Documentation required for Bike Ownership Transfer

To complete the process of transfer of ownership of the bike, the following documents would have to be submitted –

  1. Certificate of Registration:
    This is a compulsory document for the transfer of ownership to be effected. The seller should give the certificate of registration to the buyer of the bike. This document confirms and endorses the fact that the bike or the two-wheeler belongs to the seller.
  2. Pollution Certificate or PUC:
    Once again, a mandatory document which states that the two-wheeler has followed all the rules relevant to pollution control and is PUC certified.
  3. Certificate of Insurance:
    An insurance cover on the bike is necessary as per the Motor Vehicles Act, 1988. Due to this rule, the bike, which is being bought, would have an insurance cover on it and the policy would be in the name of the seller. This insurance policy would also have to be transferred in the name of the buyer and for the transfer to take place the certificate of insurance would be required. At the time of buying the bike, the insurer would have to be informed of the sale of the bike so that the insurance cover can be transferred in the name of the buyer.

Other documents required for Bike Ownership Transfer

The above-mentioned documents are the three important documents which would be required in all cases of buying a second-hand bike. Besides these three mandatory documents, there are other documents too which are required to be submitted when you are buying or selling a second-hand bike. These documents depend on how the bike is being bought or sold second hand. So, let’s have a look at the documents required in different instances of bike ownership transfers –

  1. In case of standard purchase and sale of a second-hand bike:

    If you are buying or selling a second-hand bike under normal circumstances, the following additional documents would be required to be submitted –

    ⮚Form number 29, which is the No Objection Certificate and which has been filled and signed by the seller of the bike

    ⮚If the two-wheeler is being bought or sold within the same State, a No Objection Certificate from the RTO would be required. If, however, the two-wheeler or bike is being transported from a different State, then you would have to provide the No Objection Certificate or NOC of the entry tax for that State. However, in the case of transporting from another State, the bike should not be more than 30 months old.

    ⮚Original RC book of the bike

    ⮚Receipts of road tax paid on the bike

    ⮚Passport-sized photographs of the seller

    ⮚If the seller had bought the two-wheeler through a two-wheeler loan and the loan has not been repaid fully at the time of sale of the bike, then a No Objection Certificate or NOC from the lender would also be required. The bank or the financial institution from where the loan was availed should issue a No Objection Certificate on the transfer of the bike. This certificate is also needed to be furnished to the RTO at the time of transfer

  1. In the case of Death of the Owner:

    If the owner of the bike dies, the buyer would have to submit the below-mentioned documents for transferring the ownership of the bike in his/her name –

    • Form number 30, which is the notice of transfer, has to be filled appropriately with the accurate details of the bike. The chassis inscription of the bike should also be attached with the form when it is submitted.
    • Form number 31 which is the form for transfer of ownership of a vehicle in case of death of the seller
    • Form named TCA which is the intimation of transfer by the buyer and TCR which is the intimation of transfer by the seller,
    • Since the seller has died, the death certificate of the seller would be required to be submitted to the RTO
    • Other important documents like the succession certificate, affidavit from the preceding owner of the vehicle and the No Objection Certificate from the financial institution or the financer (if the bike was financed) are also needed.
    • All the documents pertaining to the vehicle together with the fee for registration. As per Rule 81 of the Central Motor Vehicles Rules 1989, the fee will be charged as appropriate.
  1. In case of the auction of the bike:

    If a bike is being bought at an auction, the following documents would be required –

    1. Form number 32 which is the application for transfer of ownership of the bike when the bike is bought at a public auction
    2. PAN card of the buyer of the bike. If, however, the buyer does not have a PAN Card, Form 60 should be filled and submitted
    3. Vehicle’s Chassis and Engine pencil print
    4. Proof of date of birth of the buyer
    5. Proof of address of the buyer
    6. An undertaking by the buyer
    7. Passport size photographs of the buyer of the bike
    8. Tax clearance certificate
    9. A certificate which certifies that the vehicle or the bike is sold to the new owner in an auction which is being directed by the Central Government or the State Government
    10. A certificate which confirms that the auction has been directed by the Central Government or the State Government

Two-wheeler ownership transfer fees

To get the ownership transferred in your name, you would have to pay a transfer fee to the RTO. This transfer fee is equal to INR 30.

So, if you are buying a second-hand bike, do know the process for the transfer of the bike and the documents which would be needed for such transfer. Only when the process is followed and you submit all the relevant documents would you be able to become the owner of the second-hand two-wheeler that you buy. So, remember the process, arrange for all the relevant documents and buy that second hand bike which you need.

Frequently Asked Questions

  1. How can I get the insurance policy transferred in my name?

    Only transferring the ownership of the bike is not enough, the insurance policy on the bike should also be transferred. To transfer the insurance policy, you should inform the insurance company of the purchase of the second-hand bike. You would, then, have to submit the new RC book which contains your name as the owner of the vehicle, original policy document, your address proof and passport-sized photographs. Once the documents are submitted, the insurance company would verify the documents and transfer the insurance policy in your name. You might be required to pay a fee for transferring the insurance policy in your name. This fee would depend on the insurance company and would be communicated to you when you request for transfer of the policy.

  2. Within how much time should the insurance policy be transferred?

    The insurance policy should be transferred within 14 days of buying a second-hand bike.

  3. I am buying a second-hand bike from another State. Where should I apply for transfer of ownership?

    The application for transfer of ownership of the bike would have to be made in the State where the bike is registered. 

  4. I am selling my bike second hand. Would I lose the accumulated no claim bonus on my bike insurance policy when I transfer it to the buyer?

    No, the no claim bonus remains with the seller when the bike insurance policy is transferred. So, you would be able to retain the no claim bonus when you transfer your insurance policy to the buyer of your bike.

  5. If the insurance policy has lapsed on the bike, can the transfer of ownership be done?

    Usually, the bike insurance policy would have to be renewed when the bike is being sold second hand. When the policy has been renewed by the seller then the process of transfer of ownership can be done.

How to Check VIN /Chassis Number?

If you have a vehicle, you would have probably heard about “chassis”, “vehicle identification number “etc. However, are you aware of what exactly they are or where you can find them on your vehicle? Read on to know more about it.

What is a VIN or a Chassis Number?

A Vehicle Identification Number or a VIN or the Chassis number is an exclusive identification number allotted to all the vehicles and it is through this number the relevant authorities check registration by chassis number in India. Each and every motor vehicle has a 17 digits VIN number which is treated as the only identity of the vehicle. 

There are quite a few reasons why you may want to know your vehicle’s VIN Chassis number. The VIN number implies the place of manufacture of the vehicle, manufacturing year and other important statistics and information about the vehicle. You may also want to know the VIN number if you want to place an order for certain parts of the vehicle and is eager to see the precise built and the model of the respective vehicle. 

Why is a VIN or a Chassis Number important?

A Vehicle Identification Number is a globally acknowledged and recognized standard to classify different categories of motor vehicles as well as commercial vehicles and also private vehicles like cars, trucks, buses, and motorcycles. Interesting to note here is that a Vehicle Identification Number has a sequence of letters and numbers where each and every character implies a definite data and information about the motor vehicle. The VIN is critical as it is the finest and a safe way of tracking the exact distinctiveness or identity of the vehicle. Usually, the vehicle registration establishments and the car manufacturers have the necessary records with VIN numbers since it empowers them to authenticate the identity of the vehicle appropriately and accurately by merely plugging in the VIN number. Hence, to check registration by chassis number in India, VIN or the chassis number is very crucial

Different ways on how to check your vehicle’s Chassis number:

Now the obvious question is how to check your vehicle’s Chassis number. You may be able to see the VIN number on the plates occupied to the chassis or the frame of the motor vehicle. A VIN is usually stamped on the chassis or can be seen on the vehicle compliance fixed plate or at the bottom angle of the windscreen. VIN or the Chassis number is also revealed in the receipt and the Registration Certificate of the motor vehicle. In case of any problems in tracing the VIN number, a vehicle expert mechanic will be able to find the same. You might ponder as to how to find chassis number from registration number In-Vehicle Identification Numbers or VIN. Well, the answer is very simple; the chassis number is defined as the last 6 digits and needless to say that it is important to find the VIN to know the chassis number. The VIN is placed differently in cars and motorcycles and hence tracing the VIN is dependent on the category of vehicle one has. An engine number is a specific number which is imprinted on the motor vehicle’s engine. 

Let’s have a look at the few common places to check your vehicle’s Chassis number.

  • From the documents related to a vehicle like registration card, insurance documents, reports of body repair, the title of the vehicle etc.
  • From the Dashboard -This is the simplest way to track the VIN is right on the down left corner of the dashboard. You should be in a position to read the VIN number by watching through the windshield which is on the driver’s side of the car
  • Door on the driver’s side- The VIN can also be sited in the driver’s side door. If you open the door on the driver’s side and look at the ends of the door jamb for a small white label, you will be able to see the VIN
  • Open the hood- You can just open the hood and have a look at the front of the engine to view the VIN number
  • Front Frame- VIN is also written in the front side of the motor vehicle’s frame near the windshield gasket fluid container
  • Spare Tyre-You may look in the area where the spare tyre is generally kept to see the VIN

Why is it important to check the VIN before purchasing or selling a car?

Let us now understand the reason as to why VIN check is important before purchasing or selling a car. Like it is important to check the date when we buy packaged food from any departmental store to ensure that it’s not very old and also to know till when we can use it with other important information as well. 

Likewise, a VIN is not just a casual grouping of several characters which gives details of the vehicle or used to check registration by chassis number in India but also acts as an evidence to any illegal or criminal records or any robbery cases of the vehicle together with all the details related to insurance of the vehicle. Vehicle history information guarantees the authenticities and realness of the vehicle. Within a few seconds one can know the microscopic details of the vehicle starting from the history of ownership till the last step. If you are interested in selling off the car, you can check whether all as stated in the VIN check report is reasonable or not. After the validation, if all is found, to be honest then you might move ahead and can use it to your benefit for selling the motor vehicle to the respective customer with genuineness and faith while selling the car.

Components of the 17 characters VIN Number

It is interesting to know about the components of VIN Number and also you must know about the same. As mentioned above, a Vehicle Identification Number has 17 characters. This prearrangement of numbers was initiated from the ISO Standard 3779 in the year 1977 and the same was updated in the year 1983. 

However, different vehicle manufacturers in different locations have different interpretations of the VIN, which are compatible with the ISO Standard ones and have been adopted by the United States of America and the European Union respectively. Hence the VIN of different places may have certain different attributes but the most common components have been listed in details below.

For example a sample Chassis Number is 

sample Chassis Number

It has the below following significant sections:

  1. World Manufacturer Identifier or WMI: The 1st 3 characters in VIN number are the symbols for the original country and the manufacturer.
    The first digit is where the vehicle was built and the next 2 letters denote the vehicle manufacturer. In the above example, ‘1’ denotes that the vehicle was built in the US and HG is a Honda Vehicle.

    So, if the chassis number was 2HG or 3HG then it would have denoted a Honda vehicle manufactured in Canada or Mexico.

    Thus, the first 3 alphanumeric characters are called the World Manufacturer Identifier to understand who had actually manufactured the vehicle and in which country it was originally manufactured. There is a complete list to identify the same.

    For example WAU= An Audi(AU) manufactured in Germany (W)

  2. Vehicle Description Section or VDS: The next alpha-numeric 6 characters in VIN number signify other significant details of a vehicle:
    • 4th character: The 4th character characterizes the class of the vehicle.
      Example Suzuki has the below codes to spot vehicle type like C for a scooter, G for manifold cylinder sports/street etc.
    • 5th character: The 5th character in the VIN number gives the engine movement. All manufacturers might have diverse codes to recognize the engine dislocation of the vehicle.
      Example Suzuki follows B means 50 CC to 69 CC, E means 90 CC to 99 CC etc.
    • 6th character: The 6th character signifies the type of the engine.
      Example Suzuki follows the various numerical codes signifying the type of the engine. Example 2 – 2 means stroke twin-engine, 4 – 4 means stroke single engine etc.
    • 7th Character: The 7th character in the Vehicle Identification Number displays the sequence of the design for any vehicle
    • 8th Character: The 8th character denotes the vehicle version
    • 9th Character: The 9th character is the VIN accurateness check digit
    • 10th character: A 10th character is a number that says the year of the vehicle manufacturer
    • 11th character: The 11th character in a VIN symbolizes the code of the plant where the motor vehicle was manufactured
  3. Vehicle’s Serial Number: The 12th to 17th characters in the VIN is the serial number allotted to a particular vehicle and that is usually numbers.

    It is definitely an added bonus for you to know about your VIN Chassis number. You can help your friends and relatives as well in finding the same if you know where to find. Though each vehicle has a different structure and hence the VIN Chassis number also varies from one vehicle to the other, however, some common places always remain the same in most of the vehicles.

FAQs

  1. Can you tell me whether VIN and chassis numbers are the same?

    A vehicle’s VIN number is at times called a chassis number. Vehicle Identification Number is usually stamped to the chassis of the vehicle and so it is fixed to that model.

  2. How can l find the engine number on my vehicle Nissan Legrand 2000?

    You can find the engine number on a Nissan Legrand under the hood right next to the wiper system’s pipes.

  3. How do I check my motorbike’s VIN?

    Your motorcycle’s Chassis number is embossed to the frame of your vehicle and is also available in the vehicle’s Registration Certificate. The Chassis number will have the following parts:

    • WMI or the World Manufacturer Identifier
    • VDS or the Vehicle Description Section
    • Other 9 characters which indicate the vehicle type, the displacement, type of engine, sequence of the design, version of the vehicle, manufacturing year, and the code of the plant
    • Vehicle’s serial number
  4. How can I have the manufacturing date from my vehicle’s VIN number?

    The VIN of your vehicle can only tell you in what is the sequence of your vehicle that was manufactured, and not the date when your vehicle was built.

  5. Will the VIN number tell you the options are there in your vehicle?

    The VIN does not state what the options are there in your vehicle which is outside of the size of the engine and other components. Other aspects like leather, stereos and sunroofs, are not shown by the VIN number on most of all vehicles.

IRDAI makes Insurance plans more customer friendly in times of crisis

The Coronavirus pandemic is the first of its kind to grip the whole world in its clutches. Besides causing medical complications and health issues, the pandemic has also caused financial problems for many. Loss of job, pay cuts, business interruption are some of the problems which people are facing in these trying times. At the same time, insurance policies have become the need of the hour for financial security. Thus, to make insurance plans more customer-friendly and easy to buy, the Insurance Regulatory and Development Authority of India (IRDAI) has made various changes in the insurance industry. These changes have been done to make insurance plans easily accessible and affordable for all. Let’s have a look at the top six changes brought about by IRDAI in current times –

Change #1 – Launch of COVID specific health plans

As the threat of COVID became a real concern, IRDAI proposed the launch of COVID specific health insurance policies which would cover COVID cases comprehensively. Though normal health plans covered COVID related hospitalisations, they excluded the cost of consumables which was considerable in COVID related claims. Thus, to provide individuals with an all-inclusive coverage against COVID, Corona Kavach and Corona Rakshak health insurance plans were launched. Both these plans are short term health plans covering only COVID related claims. Corona Kavach is an indemnity health plan which covers the actual costs of hospitalisation while Corona Rakshak is a fixed benefit plan which pays the sum insured in lump sum if you are hospitalised for COVID for 3 days or more. Both these plans meet the immediate coverage needs of individuals as they cover COVID after a short waiting period of 15 days. Moreover, there are no deductibles making these plans ideal tools to safeguard against the financial strain of Coronavirus infection.

Change #2 – Inclusion of telemedicine

As COVID required individuals to practice social distancing and to stay at home, doctor’s consultations went online. Telemedicine became popular which involved medical consultations on a virtual basis without the doctor and patient meeting physically. To make health insurance plans more comprehensive, IRDAI asked insurance companies to include coverage for Telemedicine if their plans allowed coverage for doctor’s consultations. Thus, health insurance plans have become more inclusive and have started covering the costs of Telemedicine.

For a detailed understanding please check out our youtube video below:

 

Change #3 – Online sales and KYC verification

To allow individuals to buy insurance in a safe manner even when the country was under lockdown, IRDAI promoted online sale of insurance plans. It has allowed insurance companies to sell their policies online so that policyholders can easily make purchases from their own homes. Moreover, the KYC verification process has also been made virtual wherein the KYC details are verified online either through a video call with the policyholder or by asking the policyholder to upload the KYC documents online. So, you can, now, buy insurance policies with a minimal fuss and also while practicing social distancing norms.

Also check out how digitization is making your life easy while buying insurance

 

Change #4 – Payment of health insurance premiums in instalments

To make health insurance plans affordable for policyholders, IRDAI has allowed the instalment payment mode. Now, you can pay health insurance premiums in instalments through the monthly, quarterly, half-yearly or annual mode rather than paying it in lump sum. This change is expected to make health plans affordable and popular among individuals.

IRDAI has also announced changes in the life & motor insurance category to make the buying process convenient and faster, these changes are listed below.

 

Change #5 – No need for physical signatures for life insurance plans

To ease the buying process of life insurance plans, IRDAI has done away with the need of physical signatures on the proposal forms. Now, you can fill up the proposal form and submit it online to buy a life insurance policy. The company would send the completed proposal form to your email wherein you can verify and declare the details of the form either by clicking on the confirmation link or by sharing the OTP sent by the company. Life insurance companies can then send you electronic policy document thereby overcoming the problem faced in printing and sending the policy bond during these times.

Change #6 – Withdrawal of long term motor insurance plans

To make motor insurance plans more affordable, IRDAI has withdrawn long term comprehensive motor insurance plans which had high premiums. Now, new cars and two-wheelers would have to buy a long term third party coverage while the own damage coverage would be on an annual basis. This would make motor insurance plans affordable and also prevent miss-selling in the insurance market.

For more details please check out the our youtube video below:

 

The IRDAI continuously makes changes in insurance plans so that they fulfil the changing need of policyholders. In these trying times when individuals are facing financial difficulties as well as restrictions on free movement, IRDAI has introduced the above-mentioned changes so that insurance plans can provide the solution to these challenges. With these changes effected by the IRDAI, insurance plans have become inclusive, more customer-friendly and even affordable. So, what are you waiting for? Invest in a suitable insurance plan and secure yourself financially in this crisis.

Save your Health Insurance premium and make your plan more pocket-friendly

Having a health insurance policy with a sufficient sum insured is needed. How else would you be able to meet the expensive treatment costs of a medical emergency?

When you opt for an optimal sum insured level for complete coverage, you cannot overlook the premium associated with it. If a high sum insured is chosen, the premium, invariably, becomes high. In such cases, you have to choose between an optimal coverage and an affordable premium and the choice is not very easy. What if you can make your health insurance premiums affordable?

There are many ways in which you can save on your health insurance premiums. Let’s find out what these ways are –

  • Following a healthy lifestyle

    Your health insurance premium is directly proportional to your health and your lifestyle habits. If you practice healthy living and choose healthy lifestyle habits, your premiums would be lower and vice-versa. So, you should maintain your health as premiums for healthy individuals with no medical complications tend to be lower than premiums for individuals suffering from medical problems. Similarly, if you smoke and/or drink, your health insurance premiums would be high as these habits impact your health negatively. That is why health insurance companies charge lower premiums from non-smokers than smokers.

  • Wellness benefits offered by insurers

    The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurance companies to include wellness benefits in their health insurance policies to promote healthy living. These benefits offer premium discounts if you are healthy or if you practice regular exercising and adopt healthy habits. These benefits also offer discounts on medicines and wellness programs at merchants partnered with the insurer. When buying a health insurance plan, look for these wellness benefits available in the policy and use these benefits to reduce your premium amount.

  • Premium discounts

    Health insurance plans also allow different types of premium discounts in the policy for making the policy more pocket-friendly. Some of the commonly available discounts include the following –

    • Family discount for covering 2 or more members under the policy
    • Discount for buying a long term plan for a period of 2 or 3 consecutive years
    • Discount for buying the policy online
    • Discount for choosing voluntary co-payment under the plan

    You can hunt for these discount in the policy and use them to reduce your premium outgoes.

  • Avoiding small claims

    When you don’t make claims in a policy year, you earn a no claim bonus. This bonus either increases the sum insured free of cost or it allows a discount in the renewal premium. So, during the policy year, if you incur small medical expenses, don’t make claims for such expenses. Avoidance of claims would help you avail no claim bonus and either get a higher sum insured at the same premium or a premium discount on renewal.

  • Splitting the premium between spouses

    Health insurance premiums are allowed as a deduction from your taxable income up to INR 25,000 under Section 80D of the Income Tax Act, 1961. If, however, your health insurance premium is more than INR 25,000, you can split the premium with your spouse and claim double tax benefits. This splitting is allowed if the premium of the policy is paid through two bank accounts. In that case, the insurance company might issue two tax certificates allowing you and your spouse to claim a deduction from your respective taxable incomes. For instance, say your aggregate health insurance premium works out to be INR 35,000. In this case, you can pay INR 25,000 from your bank account and ask your spouse to pay the remaining INR 10,000 from his/her bank account. This way, you can claim a deduction of INR 25,000 under Section 80D from your taxable income and your spouse can claim a deduction of INR 10,000 from his/her taxable income. This splitting would, therefore, give you higher tax deductions and reduce your tax liability.

    Premium splitting might or might not be allowed by insurance companies. So, find out from your insurer whether it would allow such splitting and provide you with two tax certificates so that you can claim dual deductions on a single policy. (Source ET article)

  • Choosing a super top-up plan

    To enjoy a high cover at a low premium you can opt for a super top-up health plan. The plan comes with a sum insured and a deductible limit. If the aggregate claims made in a policy year exceed the deductible limit, the excess claims are paid by the super top-up plan. A super top-up policy can act as a supplemental coverage on an existing plan. The deductible of the plan can be taken to match the existing coverage of your policy so that claims up to the deductible get paid by the existing health plan and excess claims get covered by the super top-up plan. A super top-up plan, therefore, is a good choice for increasing your coverage while reducing the premium cost.

Which of these ways would you choose to reduce your health insurance premium?

You can choose one or all of the ways mentioned above but do be smart about buying your health insurance policy. A high sum insured doesn’t always mean a high premium and you can use the above-mentioned steps to reduce the premium effectively. To enhance the sum insured, opt for super top-up plans and get comprehensive coverage which is also light on your pockets.

Watch the below video to find out more ways on how you can lower your health insurance premiums.

IRDAI’s efforts towards a healthier India through wellness benefits in Health Insurance plans

The Insurance Regulatory and Development Authority of India (IRDAI) has always ensured that health insurance plans adapt to the changing trends of the modern society. Gone are the days when health insurance plans offered vanilla coverage benefits against medical costs. Today’s health plans have become multi-dimensional in their scope. They offer new-age coverage benefits as well as value-added services so that policyholders can get something extra from their health insurance plans. IRDAI has also promoted the evolving changes in health insurance plans and one such change, in recent times, is the inclusion of wellness benefits in health plans.

Wellness and preventive healthcare can go a long way in taking care of your health and reducing the probability of health insurance claims for insurers. As such, some insurers offered incentives to policyholders for adopting a healthy lifestyle. Wellness benefits, which were previously offered by few health insurers, have been made universal by the recent IRDAI guidelines. These guidelines are asking insurance companies to include wellness related benefits in their health plans so that India can practice healthy living.

IRDAI guidelines – the talking points

IRDAI issued a set of guidelines for inclusion of wellness benefits in health insurance plans. These guidelines asked insurers to include the following benefits in their health insurance costs –

  • Coverage for preventive healthcare

    To motivate policyholders to track their health on a regular basis, IRDAI asked insurance companies to allow policyholders coverage for preventive healthcare costs. Under preventive healthcare, insurers have been asked to provide coverage for the costs incurred in the following –

    • Health check-ups
    • Pharmaceuticals
    • Outpatient treatments
    • Diagnostic tests

    The coverage can be offered as a part of the policy benefits or insurance companies can offer discounts to policyholders on these costs. The coverage would, however, be provided if such costs are incurred at networked hospitals or empanelled hospitals of the insurance company.

  • Benefits for wellness and healthy living

    Many individuals practice a healthy lifestyle and maintain their health. Insurance companies have been asked to reward such policyholders through wellness benefits in health insurance plans. This reward can be in the form of gift vouchers which policyholders can redeem on –

    • Health supplements
    • Sports club membership
    • Fitness centre membership
    • Gym membership
    • Yoga membership, etc.

    Furthermore, if policyholders practice healthy living during the policy tenure and fulfil the conditions of a wellness regime stipulated by the insurance company, they can be rewarded at the time of policy renewals. Insurers can offer such policyholders a discount in renewal premium or a free increase in the sum insured. 

    A very common example of this benefit is the ‘Stay Active’ benefit in HDFC Ergo Health plans. Under many of the company’s plans, if the insured takes a specified number of steps during the policy tenure, a premium discount is offered on renewal. 

  • Coverage for excluded hospitalisation costs

    When you are hospitalized, your health insurance policy does not cover all the costs of such hospitalisation. However, IRDAI, in these guidelines, asked insurers to provide coverage against such excluded costs as a part of wellness related benefits.

IRDAI guidelines – the objective 

The primary objective of issuing these guidelines for inclusion of wellness benefits was to promote healthy living. Today, individuals are becoming increasingly conscious of their health and try and maintain a healthy life to keep illnesses away. With the introduction of wellness benefits in all health plans, IRDAI aims to –

  • Increase the collective consciousness about healthy living among policyholders
  • Motivate policyholders to look after their health to gain additional benefits from their health plans
  • Reward those who practice healthy living
  • Make health plans wellness-centric

IRDAI guidelines –the terms and conditions

While the afore-mentioned inclusions would considerably improve the scope of health plans and make wellness important, IRDAI also stated some terms and conditions associated with the coverage. These include the following – 

  • The main objective of the afore-mentioned benefits should be to promote healthy living
  • Insurance companies can set eligibility parameters for providing such wellness benefits. Policyholders would fulfil the parameters would be eligible to avail the wellness coverage benefits offered by the company
  • Providing the wellness benefits would be the choice of the insurance company. The benefits can be inbuilt in the health plan or offered as an add-on
  • Insurers can offer a range of wellness benefits and ask consumers to choose the benefits that they want
  • The details of service providers tied-up with insurance companies to offer wellness benefits should be disclosed by the company on its website
  • In case of family floater health plans, the plan should clearly state the members who can avail wellness benefits
  • Many plans also offer the benefit of carrying forward the unused wellness coverage to the next year. If such a benefit is offered by a health plans, its terms and conditions should be clearly stated

The modern-day mantra is healthy living and IRDAI intends to make this mantra more popular by introducing wellness rewards in health insurance plans. This move would not only enhance the scope of health plans, it would also make them relevant in today’s times when health has become a priority. So, the next time you are on the lookout for a health insurance policy, find out the wellness benefits which different plans have to offer. Change your lifestyle to practice healthy living and get dual benefits – a fitter you and a rewarding health insurance policy.

Return to Invoice Cover in Car Insurance Plans

A car insurance policy is a must if you wish to drive your car in India. The Motor Vehicles Act, 1988 mandates a third party policy on every car which is running on Indian roads. Though the third party policy fulfils the legal requirement, it has a limited scope of coverage. It does not cover the damages suffered by the car itself which also incurs considerable financial costs. This is where a comprehensive car insurance policy comes into the picture. A comprehensive car insurance policy provides an inclusive scope of cover which covers both third party legal liabilities as well as the damages suffered by the car itself. Moreover, comprehensive car insurance plans also have optional add-ons which help in enhancing the scope of coverage further. One such add-on, offered by a comprehensive car insurance policy, is Return to Invoice Cover. Let’s understand what return to invoice is –

What is Return to Invoice cover?

Return to invoice cover is an add-on cover which enhances the claim payable under the car insurance plan if the car is stolen or if it is damaged beyond repair. Under the cover, in case of constructive total loss or theft of the car, the invoice value of the car is paid as claimed. Thus, the return to invoice cover bridges the difference between the Insured Declared Value (IDV) of the car insurance policy and the invoice value of the car and pays a higher claim to policyholders.

How does return to invoice insurance work?

When you buy a car insurance policy and choose the return to invoice cover with the basic comprehensive cover, the add-on becomes effective. Thereafter, if your car suffers a constructive total loss where it is beyond repairs or if the car is stolen, the invoice value of the car is paid as claimed.

Return to invoice vis-à-vis Insured Declared Value (IDV)

After you buy a car, its value starts depreciating as it ages. Thus, under a comprehensive car insurance policy, the coverage limit of the policy is calculated after considering the depreciated value of the car. The coverage level of a car insurance policy is called the Insured Declared Value (IDV) and it is calculated as the ex-showroom price of the car less depreciation. The ex-showroom price of the car does not include the registration charges and road tax that you pay on the car. Moreover, with every passing year, the rate of depreciation on the car increases and the IDV reduces. In case of total loss or theft of the car, the applicable IDV is paid as a claim which is quite lower than the actual price paid for buying the car.

Invoice value of the car, on the other hand, is calculated by adding the ex-showroom price of the car, registration charges and the road tax paid. In other words, it is the on-road price of the car less insurance cost. The invoice value of the car is, therefore, higher than the IDV of the car insurance policy. When you choose the return to invoice cover and the car is completely damaged or stolen, you get the invoice value of the car and not the IDV and thus you get a higher claim in your car insurance policy.

Comparison of a car insurance policy with return to invoice cover and without

The afore-mentioned difference between a return to invoice cover and IDV can be better explained with an example. Let’s assume that a car insurance policy is bought on a new car where the IDV is INR 5 lakhs and the invoice value of the car is INR 7 lakhs. Here’s how the policy would differ if the return to invoice cover is availed in one instance and if the cover is excluded in the other –

Policy with return to invoice cover

Policy without return to invoice cover

IDV of the policy would be INR 6 lakhs

IDV of the policy would be INR 6 lakhs

The premium of the policy would be higher because an additional premium would be paid for choosing the return to invoice cover

The premium of the policy would be lower because the return to invoice cover is not chosen

In case of theft or total loss of the car, IDV would be paid which is INR 5 lakhs after deducting the market value of the car with age-based depreciation

In case of theft or total loss of the car, the invoice value of the car would be paid which is INR 7 lakhs. The depreciation of the car due to its age would not be considered 

The policyholder would suffer a loss of INR 2 lakhs because the cost of the car was higher than the claim received

The policyholder would not suffer any financial loss as he/she would get the cost of the car compensated by the return to invoice cover. The policyholder can, therefore, easily buy a new car to replace the old one

The road tax and registration charges paid on the car would not be compensated by the car insurance policy

The road tax and registration charges paid on the car would be compensated by the return to invoice cover availed with the car insurance policy

Benefits of return to invoice insurance cover

Choosing the return to invoice cover as an add-on with your car insurance policy is beneficial because of the following reasons –

  1. Better scope of coverage 

    If you opt for the return to invoice cover, you get a better scope of coverage in your car insurance policy.

  2. Higher claim payment

    In case of total loss of the car or theft, you get the invoice value of the car paid as claim. This value includes the registration charges paid as well as the road tax thereby enhancing the claim amount that you receive.

  3. Beneficial in case of high-end cars

    If you buy your dream luxury car after saving for it for many years, total loss or theft of the car would be a considerable financial loss. Though your car insurance policy would compensate you for the loss suffered, the IDV paid would be considerably lower than the cost of the car. In such cases, having a return to invoice cover is a blessing. The cover would pay you the invoice value of the car which is much higher than the IDV thereby reducing your financial loss and enabling you to replace the damaged luxury car with a new one.

Applicability of return to invoice add-on

Here are some instances wherein you can choose to buy the return to invoice add-on and where the add-on would work –

  1. The return to invoice add-on would be available for cars which are up to 5 years old. Some insurance companies restrict the coverage for cars up to 3 years old too. So, compare the available car insurance plans to find out the maximum age of the car for which the return to invoice add-on is allowed by the insurance company.
  2. The return to invoice cover works only in cases of theft of the car
  3. If the car suffers total constructive loss which is beyond repair, the return to invoice add-on would be applicable. The car can be damaged in a fire, natural calamity or man-made calamities or accidents.

Non-applicability of return to invoice cover

The return to invoice add-on would not work in the following situations –

  1. If your car is 5 or more years old, the add-on would not be available
  2. If you suffer a partial damage which can be repaired, the return to invoice cover would not be applicable
  3. If the vehicle is stolen but you don’t file a police FIR, the claim would not be admissible. In such cases, the return to invoice add-on would not be applicable
  4. If you suffer a third party claim, return to invoice add-on would not be applicable

Return to invoice vis-à-vis zero depreciation 

When it comes to choosing add-ons, a car insurance policy provides a range of add-ons to choose from. Besides the return to invoice add-on, another popular add-on is the zero depreciation cover which also enhances the claim payable by nullifying the effect of depreciation on the parts of the car. While both return to invoice and zero depreciation are popular add-ons which enhance the scope of coverage, they are quite different from one another. So, let’s understand the similarities and differences between these two add-ons –

  1. Similarities between return to invoice and zero depreciation add-on
    • Both add-ons enhance the claim amount 
    • Both add-ons are available on cars up to 5 years old
    • Both add-ons require an additional premium
  2. Differences between return to invoice and zero depreciation add-on

    The differences between return to invoice and zero depreciation add-ons can be understood from the following table –

    Return to invoice add-on

    Zero depreciation add-on

    It is applicable in case of total loss or theft of the car

    It is applicable in case of damages suffered by the car which are repairable

    The add-on bridges the gap between the invoice value of the car and the IDV of the car insurance policy

    The add-on bridges the gap between the actual cost of a car’s part and its depreciated value 

Cost of return to invoice add-on

Being an optional add-on, the return to invoice cover comes at an additional premium. The actual cost of availing the add-on depends on the insurance company and its pricing policy. However, generally, the return to invoice add-on involves an additional premium of 10%. This means that if the basic comprehensive car insurance policy costs INR 100 without the return to invoice add-on, by choosing the return to invoice add-on you might be required to pay INR 110.

Who should choose return to invoice?

The return to invoice add-on should be chosen by individuals who –

  1. Have bought an expensive car and cannot bear the loss in case of theft or total loss of the car
  2. Live in an area where car thefts are common
  3. Have bought a new car and want a complete protection on it
  4. Live in an area where damages to the car can be severe. For instance, in earthquake prone areas, the car can be damaged severely
  5. Use their cars frequently for long commutes and, therefore, face a higher probability of accidents

The return to invoice insurance cover is a valuable addition to your car insurance policy if you have invested in a brand new car. At a small additional premium you can get comprehensive cover for your car which would compensate you for the cost of buying the car in case your car is damaged beyond repairs or is stolen.

Frequently Asked Questions

  1. How is IDV calculated?

    IDV is calculated by deducting the market value of the car with depreciation based on the car’s age. The rate of depreciation is as follows –

    Age of the car

    Applicable depreciation 

    Up to 6 months

    5%

    More than 6 months but up to one year

    15%

    More than one year but up to 2 years

    20%

    More than 2 years but up to 3 years

    30%

    More than 3 years but up to 4 years

    40%

    More than 4 years but up to 5 years

    50%

    For cars aged 5 years and above, the IDV is decided mutually between the insurance company and the policyholder.

  2. If I add accessories to the car, would their value be covered under the return to invoice cover?

    No, the value of additional accessories is not covered under the return to invoice add-on. Only the invoice value of the car would be covered which excludes the value of accessories.

  3. Are other add-ons available if the return to invoice add-on has been selected?

    Yes, you can opt for as many add-ons as you want even after choosing the return to invoice add-on.

  4. What is the coverage duration of return to invoice?

    The return to invoice add-on is applicable for a period of one year. After the year is completed, you would have to choose the add-on again when renewing the policy.

  5. I am buying third party coverage for my car as I use the car sparingly. Can I buy the return to invoice add-on with the policy?

    No, return to invoice cover is available only with comprehensive car insurance plans. If you are buying only a third party liability policy, you would not get the return to invoice add-on with it.