If you have more than one vehicle or you are planning to buy another vehicle in your name, you can opt for motor floater insurance policy. Only a few insurers, including ICICI Lombard and Bajaj Allianz General Insurance, sell such policies. However, before you look into such a policy, you should read the terms and conditions carefully to avoid any confusion at the time of claim settlement.
Motor floater insurance: In the traditional approach, one needs to buy a separate insurance policy for each vehicle owned. In a motor floater policy, all the vehicles owned by the insured can be grouped into a single motor floater policy. However, all the cars are required to be registered in the name of the insured.
How it Works: If you have two or more vehicles, the car with the highest Insured Declared Value (IDV) usually becomes the primary vehicle, and the IDV of the primary vehicle becomes the floater sum insured for the policy. All other vehicles with IDV less than the primary vehicles become secondary vehicles. TA Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance said, “The premium for a motor floater policy is calculated as per the premium of the primary vehicle, and the insurer applies a fixed floater loading for each secondary vehicle.”
For example, if you have an Alto K10 and a Fortuner, you can buy a single-motor floater policy to cover both your cars. The premium for your motor floater policy will be determined on the basis of the IDV of your primary vehicle, which will be the costlier Fortuner.
What if the policyholder buys the insurance cover for different vehicles on different dates? The floater policy addresses this problem. Sanjay Dutta, Head – Underwriting, Claims & Reinsurance, ICICI Lombard General Insurance says, “The commencement dates of insurance cover for vehicles added to a motor floater policy may be different, but the expiry date of the policy is aligned so that The policyholder can enjoy the convenience of one renewal date, one premium and one policy document from the next year onwards.”
Third-party cover: A motor floater policy allows the insured to opt for only motor own damage cover for multiple vehicles under the same sum insured. Therefore, the insurer independently calculates the third-party cover for each car, whether it is part of a floater policy or a separate policy.
“The third party premium provided by the regulator will be charged for each vehicle and will be shown vehicle-wise separately in the policy copy,” Dutta said.
Irrespective of the type of car, you can buy a motor floater policy for your diesel, petrol and electric vehicles. “You may need some additional add-on covers for your electric vehicles to protect against the risk”, Ramalingam said.
Adding to this, Dutta said, “At present, as per the guidelines of Insurance Regulatory and Development Authority (Irdai), motor floater policy is available only for private vehicles and not for commercial vehicles.” Therefore, the floater policy does not apply if you have one. Private and one commercial car.
What if you already have an insured car and bought a new one with a floater policy? Can you cover one vehicle under two motor policies as the former is already insured? “Legally, there cannot be more than one motor policy for the same vehicle in the same policy term. Motor floater will in no way promote multiple policies,” Dutta said.
“If it happens unintentionally, both the policies may pay a rateable proportion of the total claim,” Ramalingam said. Thus, the insurers can share the claims from both the policies, but it depends on the terms and conditions of both the insurance companies. “However, you will not get any benefit from covering one vehicle under multiple motor policies,” said Ramalingam.
PUC Certificate: You must have Pollution under control or PUC Certificate All vehicles will be insured under motor floater policy. “The insured has the responsibility to maintain a valid PUC certificate for all vehicles during the entire term of the policy,” Dutta said.
Rakesh Goel, Director, Probus Insurance Broker, said, “You can renew your motor floater policy by filling the online form available on your insurer’s website and attaching your PUC certificate with it.”
Benefits: You can save on premium by buying a combined policy for multiple vehicles. “It offers attractive pricing while preserving the features of a traditional motor insurance policy,” Dutta said. Such policies also come with the benefit of ‘No Claim Bonus’.
Exclusions: The exclusion under the standard motor insurance policy is also applicable to the motor floater policy. In addition, any other add-on exclusions may also apply, and this varies from insurer to insurer. Some of the standard exclusions in a motor floater policy are general wear and tear in the vehicle, damage caused to the car while driving while intoxicated, etc.
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