Introduction
When you buy or renew car insurance, you’ll ask what is sum insured. A lot of people just skip past it without knowing how important it is. Simply put, sum insured is the highest amount your insurer will pay if your car gets stolen or badly damaged. Knowing how this number works helps you make sure you’re properly covered — not paying too much, and not getting too little protection.
How the Sum Insured Is Decided
1. Based on your car’s market value
The amount is mostly based on your car’s current market price when you buy or renew your policy.
Older cars drop in value every year, so the value goes down too. Things like brand, mileage, and condition also matter.
2. Depends on the type of policy you have
- Comprehensive insurance covers full repair or replacement costs, up to your sum insured.
- Third Party, Fire & Theft (TPFT) only covers losses from fire or theft, not accident damage.
3. Affected by extra factors
Accessories, modifications, or upgraded parts can increase the total insured value. Some insurers even let you include these add-ons with a small extra premium.
Why the Sum Insured Matters
If the coverage amount is too low, you’ll end up paying part of the repair cost yourself.
If it’s too high, you’re just paying extra for nothing.
The right balance makes sure you’re fully covered — and that your insurer pays a fair amount if your car’s a total loss or gets stolen.
Conclusion
Understanding sum insured amount isn’t just insurance jargon — it’s about knowing how much protection your car really has. Always check your car’s current value before you renew, and update the figure if needed. A little attention now can save you a big headache later.
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