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Everything About Bundled Plan for Brand New Car

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A car insurance plan is a mandatory document that every car owner needs to legally drive on the roads of India. Since it is an important investment, you must pick the one that best suits your needs. Choosing a comprehensive car insurance plan helps you get all the coverage under one single plan. A bundled car insurance policy offers comprehensive benefits with both own damage cover and third-party liability cover. This article will guide you through all the details of a bundled car insurance plan.

What is a Bundled Plan for a Brand New Car?

For all vehicles sold after 1st September 2018, bundled plans were introduced as there was a need for more affordable motor insurance plans. The IRDAI, Insurance Regulatory and Development Authority of India, instructed all general insurance companies to provide two kinds of policies

1. The bike or car owner could purchase a long-term insurance policy that was three years and five years of own damage coverage, respectively

2. The second option was bundled insurance. It comprised mandatory third-party liability insurance (3 years for four-wheelers and 5 years for two-wheelers) along with one year of own damage cover. The customer could renew the own-damage cover on a yearly basis.

When IRDAI made it compulsory for motor vehicles to have a minimum of 3-5 years of third-party liability at the time of purchasing, the vehicle not only made premiums costlier for vehicle owners but also created a loophole. Several insurance agents manipulated people regarding the motor insurance rules. A number of customers were made to believe that along with a mandatory third-party cover, an own-damage also needs to be purchased for a period of 3 years.

The IRDAI then stepped in and announced that from 1st August 2020, insurance providers will provide own-damage coverage for one year alone.

Note: There is no change in the mandatory 3-year third-party liability insurance for cars and 5-year third-party liability insurance for bikes.

The own damage coverage would be co-terminus with the third-party liability coverage. Here are the latest third-party liability insurance coverage rates:

The third-party premium for cars

The 3-year third-party premium for cars

The 3-year third-party premium for electric cars (EVs)

What is covered in a bundled insurance policy?

At the time of purchasing a new car insurance policy, it is quintessential to understand the coverage your car is eligible for. In case you do not understand any term or clause, you can always ask the insurance company executive/ agent to help you out. Here are some of the essential inclusions of the bundled car insurance plan:

1. Coverage for own damage

In case of any mishap to the insured vehicle, due to admissible reasons, the insurer is there to cover the losses. For instance, damage due to natural calamities, theft, fire, accidents, etc. is covered.

2. Third-party liability cover

Losses of third-party property or persons are also covered under the plan. In case of losses or injuries due to an accident, the insurer covers the loss. Death of the third-party person due to an accident, damage to the third-party property, or bodily losses are covered.

3. Personal accident cover

In case the driver/policyholder of the insured vehicle suffers bodily injuries during an accident, the medical costs are covered. Compensation is also offered to the family in case of the unfortunate death of the driver.

What is not covered in a bundled insurance policy?

Understanding the inclusions is important; however, it is not sufficient. Knowing the exclusions of a car insurance policy is equally essential. Here are some of the common exclusions of a bundled car insurance plan:

1. Any damage to own vehicle or third-party person or property outside the geographical limit of the insurance plan

2. Any damage caused to a third party due to illegal driving or driving outside the admissible limitations of driving

3. Damages caused to either party while driving without a license remain uncovered

4. Driving while intoxicated and causing damages or injuries are not covered

5. Damages or injuries caused due to nuclear weapon effects are not covered.

What are the benefits of a bundled insurance policy?

Various benefits of bundled car insurance are:

1. Convenience

The biggest benefit of a bundled policy is that you are free from legal mandates for a longer time. Once you invest in such a plan, for the next 3 years, you can be certain that your car is covered with compulsory liability coverage. There is less paperwork which makes insurance hassle-free and convenient.

2. An affordable option

A bundled motor insurance is a win-win purchase. On one hand, you get dual coverage, while on the other hand, you get affordable premium rates. Depending on your needs, you can choose a plan and pay the premium without worrying about high premium charges.

3. A combo plan

A bundled policy is comprehensive car insurance that offers your vehicle damage cover and third-party liability coverage. Hence, it is a combo plan. For one year, you get to enjoy your own damage cover along with third-party coverage for 3 years.

FAQ's

1. What do you mean by a bundled plan?

A bundled plan is a car insurance policy that offers both own damage and third-party liability coverage at affordable premium rates. If you are looking for affordable car insurance plans for your new car, this can be your ideal choice.

2. Is purchasing a bundled car insurance policy a good idea?

It depends on the requirements and preferences of the car owner whether or not they prefer bundled car insurance. However, being one of the popular, bundled car insurance provides both own damage and third-party coverage at affordable premium rates.

3. What is a zero depreciation cover?

Zero depreciation car insurance is an add-on cover that helps you skip the calculation of depreciation cost at the time of claim settlement. With a zero depreciation cover, the insurance company does not evaluate the depreciation cost of your vehicle, and thus, you get a higher claim settlement.

Conclusion

Purchasing new car insurance may appear to be a daunting deal since there are various options available. Since the IRDAI has introduced a practical solution in the form of a bundled policy, it has gained massive popularity. Along with comprehensive coverage, it also offers affordable premium and customisation options. So, know your needs and accordingly make the purchase.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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