A Guide To Different Types Of Car Insurance Policies
Updated On Oct 16, 2023
Appropriate knowledge of car insurance policies is crucial and helpful for all car owners. There are many different policies that are offered in our country having differentiable terms and conditions.This article covers the types of policies that are offered in India and what are the terms covered in these policies respectively.
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Car insurance is an agreement between the insurance provider and the car owner wherein the car owner pays premiums in return of which the insurance company promises to cover the loss or damage caused due to the insured’s car. So it is extremely important to make a well-informed decision when it comes to purchasing car insurance.
Owners of four-wheelers should be aware of the different types of policies that exist and what are the terms and conditions applied. The government of India has also mandated some policies for all the motor vehicle owners in the Motor Vehicle Act. This guide would ensure that you are well-versed with all the aspects of car insurance policies and make your decision without any doubt.
Different Types Of Car Insurance Policies
Being aware of the policies and what all these policies cover is a mandatory step before buying car insurance. The following are the three types of policies that are offered in India -
Comprehensive Car Insurance Policy
This policy covers damages caused to your car by theft, accidents, natural calamities, etc. Six factors that can affect your standalone car insurance policy are the age of the car, insured declared value, fuel type, car model, car safety, and geographical location. In case of third-party property damage, it offers coverage up to a maximum amount of 7.5 Lakh. Several add-ons cover such as Zero depreciation cover, GAP value cover, Roadside assistance cover, Consumable covers, etc. are available alongside a comprehensive motor insurance policy in exchange for an additional premium. A car owner under this plan will receive compensation if the car suffers damage while being parked and the cause of damage cannot be proven. Third-party property damage, third party physical damage, and own damage, all this is covered in the comprehensive insurance policy but it does not cover the depreciation of the vehicle over time, an accident occurred while the vehicle was being driven by someone without a valid driving license, an accident occurred while the vehicle is driven by someone under the influence of intoxicants, etc. In addition to that, the No Claim Bonus or NCB is offered on the own-damage cover within the plan. Thus, comprehensive insurance is an essential plan to provide basic coverage to your car.
You may also like to read: No Claim Bonus in Car Insurance: Know More?
Third-Party Car Insurance Policy
A third-party insurance policy is motor insurance coverage that covers you against all the third-party legal liabilities which can arise due to any mishap like a road accident involving your vehicle. With third-party motor insurance, the insurance firm is susceptible to provide you with financial assistance for your liabilities towards a third party for their injuries, death, and property damage in case of a car accident. As per the Motors Tariff Act 2002, every vehicle owner in India must have a minimum of third-party automobile insurance. Third-party automobile insurance cover holds a limited coverage that includes Third Party Property Damage up to 7.5 lakhs and Third-Party Death/Bodily Injury. A third-party motor insurance policy is cheaper as compared to a comprehensive insurance plan. Thus, besides being a compulsory requirement third-party insurance is an essential plan to provide basic coverage to your car.
Standalone Own-Damage Car Insurance Policy
Standalone own-damage insurance covers damages such as accidental damages, damages due to transit, theft or vandalism, natural calamities, etc., regardless of the premium paid. However, the limit to the compensation that you receive depends on the Insured Declared Value or IDV which is determined by the car's age. Add-on covers like Zero Depreciation Cover, Roadside Assistance Cover, Engine Protector Cover, etc., with an own damage motor insurance provides you with the flexibility to reinforce the coverage of your automobile insurance policy and supply you extra support by investing a little extra premium. Standalone own damage policy and third-party liability cover separately, make motor insurance policy affordable for all four-wheeler owners.
Choosing a suitable car insurance policy can be a tiring task but having accurate information regarding the existing policies helps you to make an intelligent decision. Having an insurance policy is beneficial for every vehicle owner and it provides protection to the policyholder from varied legal liabilities.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.