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Motor Blog
16 Nov 2024
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Contents
A third-party policy is a minimum required insurance cover for driving a vehicle legally in India. Failing to comply with the Motor Vehicles Act attracts penalties and steep fines. In addition to providing legal coverage, a car insurance policy also protects your finances in case of accidents and damages to your vehicle. Thus, skipping on solid insurance coverage may cost you in the future. Since car insurance is a legal requirement, car insurance companies are now facing the risk of fraudulent claims (that are used in a way to seek undue advantage of the insurance policy). For that reason, insurance companies carry out background checks before extending their coverage to any policyholder.
*Standard T&C Apply
When running a background check, the insurance company checks for not any one particular factor, but many factors at once, as seen below:
The identity of the policyholder is the first thing checked by the insurance company when extending their policy coverage. This check, just like any other financial business, is performed keeping in mind the KYC requirements. *
The credit score of the individual is a measure of their financial health and their prudent financial behavior. This is also used by insurance companies when performing a background check by the insurance company. *
A person’s driving history is a critical factor that is considered when extending car insurance coverage. The driving history helps the insurance company know about how safe the driver is and accordingly determines the car insurance prices. Other than driving history, the vehicle information is also a part of the background check for the insurance company to know before issuing the policy. This is generally done by way of vehicle inspection before issuing the policy coverage. * *Standard T&C Apply
To summarise, a background check is conducted by the insurance company valuing the policyholder’s privacy and keeping in mind the statutory requirements. It is carried out for all insurance plans, be it third party car insurance or comprehensive insurance covers. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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