Individuals owning multiple vehicles such as private cars as well as two-wheelers can opt for a motor floater policy for convenience, flexibility and lower premium as compared to standalone policies. Such a cover solves the problem of keeping track of the renewal dates of all separate policies and paying multiple premiums.
Like a standalone motor insurance policy, a floater policy covers third party liability, own accidental damage and personal accident cover of the owner-driver.
Insurers offer an option to insure up to five vehicles and policyholders can remove any vehicle which is sold or add a new vehicle purchased. If one of the vehicles covered in the policy is transferred, then the insurer will remove it from the cover and refund the applicable premium.
The vehicle with the highest insured declared value will be considered the primary vehicle by the insurer. This amount will be considered as the sum insured of the motor floater policy and the other vehicles covered will be treated as secondary vehicles under the cover.
Cost efficient
The premium for the cover is calculated based on the distance covered and the usage of the vehicles and the driving style and history of the driver. A policyholder can even turn on/off the coverage as per the usage of the vehicles, which will help reduce the overall premium.
Rakesh Goyal, director, Probus Insurance Broker, says a floater motor insurance helps an individual with multiple vehicles by providing coverage that extends across all his vehicles under a single policy. This simplifies management and offers cost-efficiency. “Pricing in a floater motor insurance policy is typically determined by considering factors like the total number of vehicles, their types, and usage. It can be more cost-effective than standalone policies for each vehicle,” he says.
In motor insurance, the third-party cover is mandatory. It only covers the damage done by the insured vehicle to other vehicles, property and people and the premiums are fixed by the government. In an own damage cover, the insurer pays for the costs of repair of the insured vehicle in case of an accident. Individuals must take a comprehensive cover, which will cover damages due to natural calamities, fire and acts of vandalism.
A floater motor policy will cover damages due to an accident, fire or any electrical component failure and natural disasters. However, policyholders must note that depreciation cost of a vehicle, mechanical breakdown and repair or replacement of any parts due to wear and tear will not be covered under such a policy.
Moreover, if the primary vehicle suffers a total loss or is stolen then the own damage cover of all the vehicles will be cancelled. Like a standalone policy, if claims are made during the policy year, then the insurance company will offer no-claim bonus which will be applicable on the premium at the time of renewal of the policy.
More cost-effective & convenient
- Insurers offer an option to insure up to five vehicles and policyholders can remove any vehicle which is sold off
- With a floater, you don’t need to keep track of the renewal dates of different policies or pay multiple premiums
- A policyholder can even turn off the coverage as per the usage of the vehicles, which helps slash overall premium
