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Auto / Vehicle / Motor Insurance Interview Questions & Answers - Learning Mode

Auto / Vehicle / Motor Insurance Interview Questions & Answers - Learning Mode

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. A motor insurance policy is a mandatory policy issued by an insurance company as part of prevention of public liability to protect the general public from any accident that might take place on the road. The law mandates that every owner of a motor vehicle must have one motor insurance policy. Motor insurance (also known as vehicle / car / auto insurance) is insurance purchased for cars, trucks, and other road vehicles. Its primary objective is to provide protection against physical damage resulting from traffic collisions and against liability that could also arise there-from.

Try Auto / Vehicle / Motor Insurance Interview Questions & Answers - Exam Mode


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Auto / Vehicle / Motor Insurance Interview Questions & Answers - Learning Mode
Try Auto / Vehicle / Motor Insurance Interview Questions & Answers - Exam Mode
Question: My car insurance advisor is keen i take a key replacement cover. I am wondering if it is useful or just a marketing gimmick?

Answer: Losing your ignition key can be a big problem. Car keys can be lost, misplaced or stolen. In any case with a standard insurance policy you do not get full replacement cover for the ignition keys. Keys today are automated and made with robotic engineering to offer greater security. The cost of key replacement can easily run into thousands. If you have a key replacement cover you can save yourself the high cost of key replacement with a small annual premium for the add-on. Source:
Question: Why is third party insurance cheaper than regular auto insurance?

Answer: Third party insurance is mandatory as per law and offers a basic vehicle insurance that covers all damages caused due to the fault of the individual driving the vehicle. A Comprehensive motor insurance cover on the other hand offers a more comprehensive protection covering the damages caused to the driver's vehicle as well as any third party vehicle and individuals, hence the added costs. Source:
Question: Is my car insurance premium related to the engine capacity of my car?

Answer: Yes the size and the power of your car's engine is one of the defining factors when it comes to calculating the car insurance premium. The higher the cubic capacity or cc value of your car engine, the higher will be the premium amount. As per the Indian Motor Tariff Act, the premium calculations based on cubic capacity of your car's engine divided into 3 slabs namely cars having a cubic capacity less than 1000cc, cars with cubic capacity between 1000-1500cc and cars with engine having a Source:
Question: Do car insurance policies cover engine protection by default?

Answer: Most car insurance policies do not offer protection for the engine and electronic circuit. This is because, most of engine related issues are covered by the manufacturer?s warranty. However, there will be some exclusion for manufacturer?s warranty.

It is a good idea to check with your car insurance service provider about the details of protective coverage before opting for a car insurance policy. In case if your insurance company is not offering coverage for engine protection, it is a goo Source:
Question: What is the difference between ?Third Party Insurance? and ?Comprehensive Insurance??

Answer: Car or vehicle insurance is very important today because of increased traffic and commute. It gives you peace of mind in case of any accidents or emergency. The major types of insurance are third party insurance and comprehensive insurance.

Third party insurance covers the damage or liabilities caused by your vehicle to any other vehicle. Third party insurance compensates your mistake caused inadvertently.

Comprehensive insurance covers everything, i.e. damage your vehicle, theft o Source:
Question: How much does the IDV (Insured Declared Value) of a car depreciates over time?

Answer: IDV calculation depends on the ex-showroom price for a new car. However as your car becomes old, the IDV takes into account the depreciation value of the car. IRDA offers a calculation chart for depreciation which is used by insurance companies to arrive at the IDV value for older cars. For cars less than 6 months old the Depreciation Percentage to calculate IDV is fixed at 5%. For cars between 6 months to 1 year the percentage is 15% and for 1 year to 2 years the percentage is 20%. Source:
Question: Does Third Party Insurance covers any car against theft?

Answer: If you take up just a third party insurance you are only safeguarding yourself against any bodily harm or injury caused to any third party or damages caused to the party's vehicle. You are not covered against theft.

Only if you opt for a comprehensive insurance plan does your vehicle gets covered for theft. Recently genera insurance companies have started offering theft insurance. So vehicle owners can now opt for theft insurance without having to take up whole comprehensive motor ins Source:
Question: Is it possible to get long term auto insurance for my bike?

Answer: Yes IRDAI has introduced long term auto insurance which gives you freedom to relax for a least the next 2 to 3 years on policy renewal. What's more you can also save on hike in annual premium charges each year for your policy renewal. For example the long term auto insurance policy of New India Assurance offers an assured discount of 30 per cent for three-year policy and 20 per cent for two-year policy. Source:
Question: My 2 wheeler insurance policy lapsed as I was out of town. I am now planning to renew it after a period of 15 days after the expiry date. Will this impact my NCB?

Answer: If you have failed to renew your 2 wheeler insurance in time you would be doing an illegal activity when you drive the vehicle in question. If you allow your two wheeler insurance policy to lapse for a period of more than 90 days, you will have to forfeit your no claims bonus. So in your case you can still avail NCB benefits but you will need to bring your vehicle to the insurance agent for physical verification to be able to get your insurance renewed. Source:
Question: I have heard getting a third party insurance is compulsory. Is it true?

Answer: Yes you heard it right. Third party insurance is mandatory as per law. Motor insurance is broadly classified as third party cover and comprehensive cover. Third party insurance is a basic vehicle insurance that covers all damages caused due to the fault of the individual driving the vehicle. A Comprehensive motor insurance cover on the other hand offers a more comprehensive protection covering the damages caused to the driver's vehicle as well as any third party vehicle and individuals. Anyo Source:
Question: What is IDV for car insurance?

Answer: If you ever have a total loss in an accident, IDV is the total compensation the insurance company will offer you calculated as per the cost of your car at the time of taking insurance. Insured declared value or IDV is the maximum amount that you can claim under a motor insurance policy. A new car just out of a showroom will therefore have a higher IDV than someone having the same car model but which has been on the road for say 6 months. Source:
Question: What are zones in India for Car Insurance? Do they have different premiums?

Answer: India is divided into 2 zones namely zone A and zone B depending on the risk faced by motorists. Zone A cities have a higher premium than cities in Zone B. Zone A includes Mumbai, New Delhi, Bangalore, Chennai, Kolkata, Ahmedabad, Hyderabad and Pune and Zone B includes rest of India.
Question: Do third party insurance premiums get revised each year?

Answer: Yes the insurance watchdog IRDA revises the rates of mandatory third party insurance annually. Since many insurance companies have been facing high third party losses IRDA has suggested a price hike of 3% to 30% across various vehicle categories this year. These rates get applicable from first day of the new financial year. Source:
Question: My car dealer is offering me a good car insurance plan for my new car? Should I go for it as I do not have time to hunt for one?

Answer: Let me first tell you that you are not alone. Many people in their quest to save time and get the compulsory insurance monkey off their back take the insurance offered by the dealer there and then. While people bargain long and hard with the dealer to reach a mutually acceptable price for the car, they end up talking the car insurance without much fuss. Dealers have a huge incentive or commission which they do not pass on to the customer. Taking an insurance from the car dealer must be avoided a Source:
Question: While buying a car, what kind of insurances are expected to be taken? Will it cover even if the car is stolen?

Answer: While buying a car, you can take a comprehensive insurance cover. It covers your car from accident, theft and self damage. It also provides the third party cover which is mandatory while you own a car in India. You can also enhance the car insurance cover with the help of available add-ons such as co passenger insurance, CNG kit insurance etc. The Insurance cover gets reduced every year to the value of car post depreciation. You are also entitled to no claim bonus (NCB) if you have not claimed f Source:
Question: What are the different types of car insurances available in the market?

Answer: It is very important to get the requisite insurance cover while you own a car. Car Insurance is mandatory in India as per the law. Basically there are two types of insurance available in the Indian market i.e.
- Third Party Insurance: It is a mandatory insurance for all the vehicles. In case your vehicle meets an accident and the other vehicle is damaged or person is injured, in such situation, the third party insurance provides financial compensation for such losses. The cost for this type o Source:
Question: Is theft not covered under a 3rd party insurance for bike or car?

Answer: Opting for just a third party insurance you are only safeguarding yourself against any bodily harm or injury caused to any third party or damages caused to the party's vehicle.
Hence, we must take insurance against theft for our vehicles. Source:
Question: Which is a better idea going to a large deductible or a small deductible when going for an automobile insurance?

Answer: Deductible is the initial amount that the car owner must pay after which all expenses would be borne by the insurance company. Usually car insurance seekers including first time car buyers opt for a small deductible to save some money. Opting for a small deductible may appear to be money saving proposition at first instance but opting for a higher deductible is not always a good idea.

You can lower the car insurance premium to be paid each year in case you opt for a substantial deductible Source:
Question: If I take comprehensive car insurance, will I get deduction in Taxable income?

Answer: In usual cases premiums paid for car insurance is not eligible for tax rebates. But if you are a business owner, and the vehicle is purchased for official purpose, and in your company's name or in your name if you are the sole proprietor, you can claim tax deduction for premiums paid against car insurance. This deduction is considered under Section 88 of the Income Tax Act and is not open for all.

If you are self employed and having a CA to manage your company taxes, you can take his Source:
Question: Is car insurance automatically transferred when I sell my car? What happens to the no claim bonus?

Answer: No your car insurance does not automatically gets transferred to the new buyer although you have a choice of transferring it in his or her name if requested. In case the buyer wants to transfer the insurance policy in his name along with the car, he will need to apply to the insurance company which in turn makes an endorsement to the policy. NCB is not transferred to the new buyer and is retained by the seller. On the other hand if you do not wish to transfer the car insurance policy to the new Source:


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