Everything about Multi-Cars Insurance

Multi-car Insurance may soon become a reality in India. With car per capita rapidly increasing in India, insurance companies, along with IRDAI (Insurance Regulatory Development Authority of India) is finding ways to make it less cumbersome for people who own multiple cars.

A multi-car insurance is a car insurance policy that provides a combined coverage for multiple cars registered on the same address. While there is no fixed limit but experts say that this policy would be available for at least two cars and may go up to 5 cars. It can also be known as the "Floater" car policy. The "Floater" policy option is available for health insurance currently where families are covered under a single policy. Though multi-car insurance is popular in the international market, it is yet to make its entry in India.

One question most car owners ask is how would the policy cover two cars with different renewal dates. The policy will work on a "specific" model where the renewal date of both the cars will be brought to the same time eventually.The yearlong policy would mostly start on the date when the last car insurance is due for renewal. Till that date, short term covers would be used for other cars in the policy. For example, if we have 2 cars to be insured with due dates in April and December, then the policy will start yearly from December for both the cars. The car with the due date in April will be given a short term coverage from April to December. The policy will then renew each year for both cars at the same time.

1. Offer Better Deals and Discounts:

2. Allow Different Drivers:

3. Hassle-Free Process:

1. The insurance company would surely offer discounts and better deals when getting a chance to insure multiple cars than a single one. It also enhances the chances of a long-term association with its customers.While nothing is final yet, but there may be the main driver and other drivers who can also drive the cars covered under the policy. Thus, any driver among the main and other drivers can drive the car, but all the cars would have to be registered under the same name.With a single policy for multiple cars, it will lead to lesser paperwork, and the process could be simplified for insurance companies as well as car owners. Since there would be a single due date for all the cars eventually, it will become easier for car owners to manage and renew the policy.

Before you decide to opt for a multi-car insurance whenever it comes, few limitations you need to keep in mind.

1. Financial Burden:

2. High-Risk Drivers:

3. Risk of Policy Lapse of All the Cars Under the Policy:

1. With a single renewal date, the payment would generally be in large amounts. This large sum of money can be a financial burden on your pocket in comparison to spreading out money evenly, for different policies.If any of your drivers in the policy are classified as high-risk drivers, there are chances that the premium of the policy will increase altogether. Hence, you will need to be assured of the driving history of all the drivers named in the plan, before opting for a multi-car insurance.Since there will be one renewal date for all the cars, there could be a risk of all the cars running out of policy if you forget to renew the policy on time. And if you cross the 90-day grace period after the renewal date, you stand a chance to lose out NCB on all the cars.

While these are a few important limitations, Insurance companies are working at ways that could negate these limitations such as easy payment options, better grace period, etc.

A multi-car insurance is beneficial for the customers as well as the insurance providers. You just need to make sure that the higher premium is not putting an additional burden on your pocket. If the premium can be managed easily, the entire family can go together with a single policy and enjoy the discounts and other benefits.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.