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Types of Car Insurance

What are the different types of car insurances?

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What are the different types of car insurances?
4.5 (90%) 10 votes

Motor insurance is an assurance for an average vehicle owner as well as a legal mandate as per the laws of our land. You may face a huge wrath in the form of penalty if you are found without having car insurance or you may even face a disqualification. It is a known concept that motor insurance offers a sense of security from a financial loss or accidental damage due to road mishaps as vehicle repairs due to accidents absorb huge amounts of money these days. It is worth buying an insurance policy which can offer huge benefits, but people don’t buy just for the lack of time or lack of convenience. These days it has become very easy to buy insurance. You can even purchase a policy online or offline. You have online insurance websites or if you want to buy it offline, you can contact insurance agents. Insurance websites are even offering comparisons on different types of car insurance policies of various companies in India.

Different types of car insurances:

Comprehensive Car Insurance:

Comprehensive car insurance can be termed as the most beneficial insurance of all as it has the highest coverage to keep you at peace of mind. This insurance covers the loss or damage to the car, the individual as well as the third- party liability due to natural or unnatural incidents such as accidents, earth quakes, thefts, fire mishaps etc. The loss occurred to the driver along with the passengers inside the car at the time of accident is covered too.

What does it cover?

Comprehensive insurance provides maximum coverage as its premium is the highest one. In simple terms, the higher the premium, the better the coverage would be. The coverage is inclusive of accidental damage to the car irrespective of it being your fault or the opposite party’s fault.

What it doesn’t cover: 

Like every other insurance, even comprehensive insurance has its own limitations. If your car is driven by someone else, it doesn’t cover you for an accidental damage unless they are permitted to drive your car as per the policy. If a person under drug affect or alcohol affect over the legitimate limit drives the car and is responsible for an accident irrespective of being the driver or authorized person as per your policy, the comprehensive insurance doesn’t cover the damage. In addition to it, you should hold a proper driver’s license and your car should be road worthy to get the comprehensive insurance coverage. Different types of car insurance policies have different types of limitations as included in the policy norms.

Third party car insurance:

Third party insurance is the insurance coverage offered to a third party in case you are responsible for an accident and damage their vehicle or hurt them. This is a mandate as per Indian motor law and the comprehensive is your choice whether you want to opt for it or not. But the third- party insurance is must for every car.

A very recent order from Supreme Court says that all the vehicles purchased after September 1st, 2018 should have insurance coverage at least 3 years for two-wheeler and 5 years for cars as a mandate. Since it has now become compulsory, analyze both the comprehensive insurance and third- party insurance and choose the best for your condition as ultimately, it is meant to protect you against unforeseen odds in your life.

Importance of car insurance:

‘Prevention is better than cure’ applies on the car insurance also. Many try to find the possibilities of skipping investing in insurance although it is a minimal cost in comparison to the car price. However, this minimal payment may save you from huge charges at the time of emergency. Let’s find out the benefits of car insurance and why one should focus on getting the car insured.

Damages are compensated:

A mishap may damage your car badly and you may end up having to pay huge repair charges at such an instance. You don’t need to worry at such situations if you have an insurance policy. The damage charges are completely or partially compensated by your insurer if you purchase a policy depending on the policy terms.

Coverage on hospitalization bills:

Similarly, the hospitalization charges due to a road mishap may be partially or completely retrieved depending on the type of insurance policy you purchase.

Decreased liability:

It is compulsory in India to buy a third- party liability (TPL). The TPL saves you against legal litigations of an accident if you are responsible for it.

Support to family:

Any family would be devastated with the sudden demise of their loving family member. Although, no insurance policy can substitute an individual, there will be at least some help to the family financially when an earning member suddenly leaves the family.

Low policy price vs high benefit:

All the above benefits and the price you pay for it as premium is just nominal. Different types of car insurance policies offer different coverage but the benefits are always higher for the price paid.

Also read about how to check car insurance.

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