What you gain from buying one policy for multiple vehicles

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 vehicles owned by the insured can be grouped into one motor floater policy. However, all cars need to be registered in the insured’s name.

How it works: If you have two vehicles or more, the car with the highest Insured Declared Value (IDV) typically becomes the primary vehicle, and the IDV of the primary vehicle becomes the floater sum insured for the policy. All other vehicles with IDV lesser than primary vehicles become secondary vehicles. “The premium of motor floater policy is calculated as per the premium of the primary vehicle, and the insurer applies a certain floater loading for every secondary vehicle,” said T A Ramalingam, chief technical officer, Bajaj Allianz General Insurance.

For instance, 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 based on the IDV of your primary vehicle, which would be the costlier Fortuner.

What happens if the policyholder buys the insurance covers on different dates for different vehicles? The floater policy addresses this problem. Sanjay Datta, chief—underwriting, claims and reinsurance, ICICI Lombard General Insurance, says, “The insurance cover start dates may be different for the vehicles added to the motor floater policy, but the end date for the policy is aligned so that poicyholiders can enjoy the convenience of one renewal date, one premium and one policy document from the very next year .”

Third-party cover: A motor floater policy allows the insured to opt for only motor own damage cover for multiple vehicles under a single sum insured. Therefore, the insurer calculates the third-party cover for each car independently, whether it is part of the floater policy or a different policy.

Datta said, “Third-party premium as provided by the regulator would be charged for each vehicle and shown separately, vehicle-wise, in the policy copy.”

Irrespective of the car variant, you can buy a motor floater policy for your diesel, petrol and electric vehicles. “You may require some additional add-on covers for your electric vehicles to protect the risk”, said Ramalingam.

Adding to it, Datta said, “Currently, according to the Insurance Regulatory and Development Authority (Irdai) guidelines, motor floater policy is available only for private vehicles and not commercial vehicles.” So, the floater policy is not applicable 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 since the earlier one is already insured? “Legally, one cannot have more than one motor policy for the same vehicle in the same policy period. Motor floater would in no way promote multiple policies,” said Datta.

Ramalingam said, “If this happens unintentionally, both policies may pay a rateable proportion of the total claim.” Thus, insurers can share claims from both policies, but it depends on the terms and conditions of both insurance companies. “However, you will not get any benefit whatsoever from covering one vehicle under multiple motor policies,” he Ramalingam.

PUC certificates: You need to have Pollution Under Control or PUC certificates for all the vehicles to be insured under the motor floater policy. “Insured has the responsibility to maintain valid PUC certificates for all the vehicles throughout the tenure of the policy,” said Datta.

Rakesh Goyal, director of Probus insurance broker, said, “You can renew your motor floater policy by filling out an online form available on your insurer’s website and attaching your PUC certificate with that.”

Benefits: You can save on premiums by purchasing a combined policy for multiple vehicles. Datta said, “It offers attractive pricing while preserving the features of a traditional motor insurance policy.” Such policies come with ‘no claim bonus’ benefits as well.

Exclusions: The exclusions under standard motor insurance policy also apply to a motor floater policy. Besides, any other add-on exclusion may also be applicable, and this varies from insurer to insurer. Some of the standard exclusions in the motor floater policy are general wear and tear to the vehicle, damage caused to the car while driving in a state of intoxication, etc.