A FEW DRIVING PRINCIPLES

Vehicle insurance is mandatory and there are many additional features on offer, depending on the risks you want covered

MOTOR INSURANCE

After six years of driving a compact Wagon R, 37-year-old Noida resident Arvind Tripathi is planning a shift to Maruti Brezza. The crossover SUV costs about Rs 15 lakh and Tripathi is exchanging his old car for the new one, which knocks off a couple of lakhs from the price. His family is excited about the shift, his two children are eagerly looking forward to long drives in the new vehicle. "The funding for Brezza looks easy with a little down payment and exchange on my old car and some loyalty discount that the dealer offered, making the EMI affordable," says an excited Tripathi.

Tripathi is well aware that motor insurance can be transferred from an old car to the new one, and he plans to do just that with the 45 per cent NCB (no claim bonus) that he has accumulated on his Wagon R. The move will significantly reduce the premium outgo on the Brezza, which would otherwise work out to a little over Rs 20,000. "But, I am confused about add-on motor insurance that is being suggested," says Tripathi. For the uninitiated, add-on vehicle insurance is additional and specific risk cover that one can attach to their car insurance.

In India, every vehicle owner must have motor insurance. It has two components: liability cover and protection against own damage. The mandatory third-party liability insurance protects you against legal liabilities arising when an insured vehicle causes injury or damage to a thirdparty person or property or vehicle in an accident. The own damage insurance provides insurance cover against accidents that may require repair and replacement of parts to make the vehicle fit for use.