Motor Insurance

Motor vehicle insurance, also called automotive insurance, a contract by which the insurer assumes the risk of any loss the owner or operator of a car may incur through damage to property or persons as the result of an accident. Having car insurance is essential because it covers your expenses in the event of vehicle damage or injuries to other drivers, passengers or pedestrians. All motorists must be insured against their liability to other people, as stipulated in the Road Traffic Act 1988.

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Type of Motor Insurance

Here are some common car insurance coverage options in India with their basic description.

Third Party Insurance or Liability Cover

  • Comes with low premiums
  • Allows for third party claims under 'no fault liability'
  • Covers bodily injury and accidental death caused by the policy holder
  • Also covers property damages caused by the policy holder

Comprehensive Vehicle Insurance Cover

  • Offers a wide range of coverage options
  • Covers accidental damages to self or third party
  • Compensate for more than just vehicular collisions
  • Covers for damages caused due to man-made and natural calamities

Add-on Insurance Cover for Vehicles

  • Personal injury protection cover
  • Roadside assistance
  • Engine replacement
  • Zero depreciation cover

Comprehensive Car Insurance Exclusions

Here are some common comprehensive car insurance exclusions:

  • Aging, wear and tear, etc. of the vehicle
  • Depreciation
  • Electrical or Mechanical breakdown
  • Damage to tyres and tubes. However if the vehicle is damaged at the same time, liability of the company will be limited to 50% of the replacement cost.
  • Damage caused by a person driving without a valid license.
  • Damage caused due to drunken driving or driving under the influence of drugs.
  • Loss/ damage caused by war, mutiny or nuclear risk.

Third-party Car Insurance Exclusions

  • Cost of damages to a vehicle or the belongings in the vehicle in case of an accident.
  • It will also not provide cover if your car or belongings are stolen or destroyed.

What Insurance Cover Is Right For You?

If what you are looking for is coverage for yourself and your vehicle, a comprehensive car insurance policy is what you need. It is a wider coverage plan since it has provisions for third-party as well. Comprehensive coverage policy is expensive as compared to just third-party insurance cover. In the end, choosing the right insurance cover comes down to your specific requirements. If you own a new, high-end car, it is a good idea to have a comprehensive cover that offers maximum protection for your vehicle. You can also choose additional covers like engine protection to ensure that your vehicle is well-protected. A standalone third-party cover could be opted for old vehicles that are no longer in prime condition.

It is better to be safe, than sorry. Accidents happen unexpectedly, and it can heavily weigh on your finances. There might be slight variations in the benefits and exclusions depending on the insurance agency and it is advisable to check the terms and conditions in detail before taking a policy. To attain peace of mind when it comes to getting the right coverage, take a third-party or comprehensive insurance that meets all your requirements.