Motor insurance protects one from the losses one might incur to oneself or one’s vehicle while driving. The losses in this case might either be due to an accident or a theft. To buy a motor insurance, the premium you have to pay depends on the Insured Declared Value or IDV of the vehicle. High IDV means a higher premium and a low IDV means a lower premium.
Benefits of Car Insurance
Coverage against loss or damage to the insured vehicle
- Coverage against loss or damage to your vehicle caused by accident, theft, fire, explosion, self ignition, lightning, riots, strikes or act of terrorism, natural calamities
- Coverage against financial liability caused by injury/death of a third party or damage to the property
- Personal accident cover
Types of Car Insurance
Car insurance is of 3 types – Third Party Liability Coverage, Collision Coverage and Comprehensive Coverage.
Third Party Liability Coverage
Third Party Car Insurance covers you against any legal/financial liability to a third party resulting when you are driver at fault. It covers the damages caused by you to the third party’s property and it also covers injury caused by you to another person. A Third Party Liability cover is legally mandatory in India under the Motor Vehicles Act.
Collision Coverage financially protects the insured against damage to his/her own car. It pays the insured for damage caused by collision. Damage/loss due to theft or vandalism or any other forms is not included in collision coverage.
A comprehensive package car insurance policy the most extensive and the most preferred choice among the various insurance options. The comprehensive coverage policy covers damage or theft of vehicle, third party legal liability and also personal accident. The policy coverage usually has add-ons like accessories cover, engine protector, zero depreciation cover, medical expenses, etc.
What is not covered by the Car Insurance?
- Gradual wear and tear of car and its parts
- Loss or damage to vehicle when driven by person without valid driving license
- Loss or damage to vehicle as a result of intoxication due to drugs, alcohol etc.
- Loss or damage to engine as a result of oil leakage
- Loss or damage to vehicle as a result of abuse of car manufacturer’s guidelines
- Loss or damage if a policy is not in force