If your household has multiple four-wheelers, you must opt for multi-car insurance rather than a separate policy for each vehicle. Four-wheeler motor insurance is a requirement that you cannot avoid. If you buy different policies, you will pay and renew several premiums. You may miss renewal deadlines leading to more hassles. With multi-car insurance, you can avoid these problems and also save on the policy premium.
Here are some benefits of multi-car insurance over a standard third-party long-term car insurance:
- Easy Purchase Process:
Multi-car motor insurance will save your time as you need not purchase separate insurance for your cars. It will also reduce documentation and the need to remember the renewal dates of several policies. There will be a single premium and renewal date.
- Usage-Based Premium Calculation:
Insurance companies have introduced features, such as car usage, distance covered, and the driver’s age and experience, to calculate the motor floater policy premium. If the insurer anticipates safe driving with a minimum risk of accidents, the premium will be less.
- Ease of Changing Details:
You can change multi-car policy details such as the address, etc., in a single step online. You do not need to change the details of individual policies.
In a motor floater insurance policy, you have the flexibility to add or reduce the number of cars. You can complete the entire process on your smartphone. You can also increase or decrease the extent of cover depending on your requirement.
- Simplified Documentation:
If you purchase or renew car insurance policies individually and offline, there will be plenty of paperwork. But, with the multi-car floater policy, there will be minimal paperwork and simple documentation.
- Better Pricing:
One of the main advantages of purchasing a motor floater policy is the premium discount. Usually, when you insure multiple vehicles under the same plan, the insurer gives a fair discount percentage. The insurer will offer discounts for each car added under the policy.
- No-claim Bonus (NCB)
If you claim for a particular car, it will not affect the NCBs of other vehicles. The NCBs for other four-wheelers would get accumulated as usual.
- Multiple addresses
Some insurers would provide a multi-car policy for cars that are not at a single household or address. For example, parents and children may stay in different places but can still cover all their cars under a floater motor policy.
Disadvantages of a multi-car insurance policy:
- High Premium Amount:
In a motor floater policy, the premium is high for luxury cars.
- Driver-Based Risk Assessment:
A multi-car policy considers driver behaviour while calculating the premium. So, for a high-risk category driver, the premium will also be high. High-risk drivers may be very old or young, within 18-25 years, and are vulnerable to accidents. Older drivers may not have good eyesight, have nerve problems, etc. On the other hand, younger drivers are more prone to rash driving, speeding, breaking the rules, etc.
- High overall interest
If you choose to pay a monthly premium, you end up paying more interest in a year.
- If you claim for one car, it will increase the overall premium of the policy.
- Policy expiry
Since there is only one renewal date, you must not miss the deadline as all your policies will expire together. You will lose coverage for all the cars at the same time. Consequently, you will not be able to take out any of the cars on the road unless you renew the policy. Also, you need to pay the renewal premium for all the cars together, so you need to allocate the required budget.
- Variation in discounts
Discounts vary between different insurance companies, and individual policies may have more of them than a multi-car policy. If you insure fewer cars (two or three), you will find this difference. For more cars, there will be more discounts but it depends on the insurer.
- Non-coverage for risk-prone drivers
Some drivers may have a history of getting fined or driving under the influence of alcohol or drugs. They may not get coverage from any of the insurers.
Before deciding to purchase a multi-car policy, you must compare the benefits and disadvantages. It would help in selecting a suitable plan.