All you need to know about a motor insurance nominee

Purchasing a vehicle is often a matter of pride for Indian families. It provides unlimited comfort, convenience and independence. Instead of relying on public transport, families and individuals can move around at liberty. A two-wheeler or four-wheeler also comes with significant responsibility. You must maintain your vehicle and keep it safe to prolong its life. After buying a car or bike, Indians must also purchase insurance to safeguard their vehicle and wallets. Let’s explore the need for motor insurance in India and better understand the nominee’s crucial role.

Motor insurance offers financial protection after an accident, natural calamity or theft. The insurance plan also has a personal accident component that covers the policyholder and their loved ones in case an accident causes significant injury or turns fatal. India made third-party liability insurance mandatory by the Motor Vehicles Act of 1988. The Insurance Regulatory and Development Authority of India (IRDAI) made personal accident coverage of at least Rs. 15 lakh compulsory for all owner-drivers from 1 January 2019.

The motor insurance nominee is the individual who receives the insurance payout if anything happens to the primary policyholder or car or bike owner. Declaring the nominee while purchasing insurance eases the claims process later. The nominee can file the claim on your behalf and receive the compensation stated in the policy. The nominee is especially crucial for personal accident coverage.

Vehicle owners and policyholders typically name their spouse or children as the nominee. Some may appoint their parents. However, the policyholder is free to name anybody as their nominee. Since the nominee becomes responsible for the insurance policy, some people may worry about what happens when the nominee is a minor. In such cases, the policyholder must also name a guardian or appointee. The individual manages the financial aspects, ensuring the nominee receives the benefits.

Naming a nominee is not mandatory in India. However, doing so allows for the following benefits:

Naming one of your dependents as a nominee helps support them should anything happen to you. Receiving the payout from the motor insurance personal accident cover provides financial stability during a difficult time.

The nominee can file claim requests on your behalf, allowing your loved ones to receive the claim settlement amount after an accident. When you do not name a nominee, your spouse or children must prove they are your legal heirs before completing the paperwork.

Ideally, you should add the nominee details when you purchase your motor insurance policy. However, if you missed adding them, you can request to change or update the nominee details. Visit the insurance company’s website and sign in using your policy number and password. You will see options to manage your policy and request changes from the dashboard. Select your motor insurance policy and opt to update your nominee details. You may have to upload a few documents to verify the nominee’s identity.

Choosing a nominee requires consideration. Evaluate the following factors before deciding.

You must select a nominee you trust wholeheartedly. Remember, the nominee can act on your behalf if something happens to you. You want somebody who acts honestly and morally.

The selected nominee should agree to take on the responsibility. Ask if they would be willing to act for you in your absence.

Ensure you correctly fill in the nominee details to prevent issues later. Pay special attention to the nominee’s address, especially if it is not the same as yours.

Your legal heir and nominee may not be the same person. In such cases, ensure you explain their rights and duties to each party to prevent conflict in the future.

A motor insurance nominee has another crucial responsibility - they must transfer the policy to their name or the legal heir’s name at the end of the policy year after something happens to the initial policyholder. We can understand this better with an example. Rahul purchased a motor insurance policy for his new vehicle in February 2014. He named his spouse, Kavita, as his nominee. Rahul maintained the policy for four years, renewing it annually in February. Unfortunately, he passed away in October 2018. The policy remained active until February 2019. However, Kavita had to apply to transfer the policy in her name for the following renewal. Now, Kavita is the policyholder. She has named her 10-year-old son, Ravi, the nominee and appointed her brother as his guardian.

Purchasing a vehicle is often a crucial milestone. Remember to protect your purchase with a comprehensive insurance policy. Your nominee plays a vital role, acting on your behalf if anything happens to you. At Zuno, we understand the crucial role the nominee plays. We encourage purchasers to select a nominee and provide their details while purchasing the policy, ensuring peace of mind and easy claims in the future. Visit the Zuno website today to browse our offerings and find your ideal motor insurance plan.

ARN: Zuno/Blog/All you need to know about Motor Insurance Nominee/05/24/03.

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