Buying a motor insurance policy on your vehicle is not optional. More often than not, car owners end up buying a car insurance policy from the insurer recommended at the time of purchase. In subsequent years, however, one can club the policy with those of other vehicles. This facility offered by a few insurers is known as motor floater insurance policy.
It is a single motor insurance policy that covers multiple vehicles. This covers cars as well as two-wheelers owned by one owner.
This enables policyholders to get discount on premium since a policyholder can club insurance premiums on a number of vehicles and buy a combined plan. This not only turns out to be economical but convenient at the same time.
“It is advisable to buy a motor floater policy when you have more than one vehicle to be insured. It is better to insure all the vehicles under one plan as the premium of a motor floater policy turns out to be lower when compared to separate policies,” says Naval Goel, CEO and Founder of PolicyX.
However, some experts believe that despite offering administrative convenience, motor floater policy may deprive policyholders of buying individual policies from the lowest cost provider.
“The main advantage of a motor floater insurance is that the premium for all your vehicles is paid in one go. This is administratively easier than paying multiple premiums. The cost benefits of such a policy are not that much because you lose out on the opportunity to buy individual insurances from the lowest cost provider,” said Kapil Mehta. Co-Founder at SecureNow Insurance Broker.
Key features of motor floater policies:
Why motor floater: It is a single motor insurance plan that brings multiple vehicles owned by a single owner under one umbrella.
Number of vehicles. There is an option to insure up to five vehicles. One has the option to add and delete vehicles upon a new purchase or sale of vehicles. These include only private vehicles and not the ones used for commercial purpose.
Sum insured: The vehicle with the highest insured declared value is considered the primary vehicle, and this amount is considered the sum insured of the motor floater policy. The other vehicles are secondary vehicles.
The total premium is calculated by applying the appropriate rate against the individual sum insured. Total SI is the sum of all individual vehicle IDVs (insured declared value). With every claim, the total sum insured of the policy declines.
Insurance cover: The motor floater insurance plan provides several features such as damage cover and third-party cover.
Premium paid. Generally, premium for one motor floater policy is lower than multiple motor policies.
It is vital to note that motor floater policy is not offered by a large number of insurers. These are, however, some of such schemes offered by a few insurers which are as follows:
ICICI Lombard (Motor Floater add-on): One can pool family members' vehicles in a single policy and helps policyholders to keep track of all vehicles with one set of insurance policy document. One can also set individual sub-limits for each vehicle in the policy.
Reliance General Insurance: The policy offered is known as Reliance Floating Sum Insured cover (Multiple vehicles Insurance). This enables policy holders to provide coverage to all vehicles including private cars and two wheelers registered under single insured name under one policy barring commercial vehicle, if any.
