Different Types of Motor Vehicle Insurance In India

If you know anything about Motor insurance in India, you must be well-read on the fact that it is mandatory in India. It is one of the primary branches of insurance. It is a protective tool that you should always keep by your side. It safeguards your vehicle against the unpredictable mayhems that await ahead and combat the financial tension. In this section, we are going to discuss the different types of motor insurance policies in India. Let’s head to the section and read on. 

Types of Motor Insurance Policies

What is Motor Insurance?

Motor insurance, commonly known as vehicle insurance, is a type of insurance that offers protection to the vehicles that come under the attacks of unforeseen events such as road accidents, natural disasters (Floods, earthquakes etc.), theft or fire/explosion. 

It also provides medical coverage to the driver injured in the accident and offers cover for any damage suffered by third-party property, driver/pedestrian and legal consequences. This type of insurance includes all the vehicles such as cars, two wheelers and commercial ones.

Types of Motor Insurance Policies

Motor insurance policies come with different options based on the scope of coverage. While planning to buy a vehicle insurance policy, you should assess different types of insurance plans which will help you determine the perfect coverage that fits your requirements and budget. 

Here are the types of vehicle insurance policies which you should consider before calling it final:

1. Third-Party Insurance Policy

This type of vehicle insurance cover is a liability-only cover and is mandated by the Motor Vehicles Act 1988  in India. This basis and the cheapest plan out there protects the insured from any third-party financial liability. 

If your insured car has caused any third-party vehicle damage, injuries to the owner/driver or pedestrian, then you become liable to pay for the damage cover. Third-party makes sure you are not crunched by any financial burden when covering the damage.

Features of third-party insurance policy

  • This type of insurance policy is mandatory to have in India. If you are a vehicle owner without a valid third-party vehicle insurance cover then you will have to face legal penalties and cancellation (permanent or temporary) of your driving licence.
  • Third-party vehicle insurance policy protects you with the coverage against any damage suffered by third-party property, medical treatment of injured driver/pedestrian and legal charges.
  • It also provides compensation to the family of a third-party person in case of his/her death.
  • This policy only covers liabilities to third-party and does not include any own-damage cover.

2. Comprehensive Insurance Policy

Comprehensive vehicle insurance policy, the package policy, offers a set of both the third-party as well as own damage cover. This type of motor insurance coverage is, thanks to its scope of coverage, is a popular plan and is preferred by many. 

Features of Comprehensive insurance policy

  • Comprehensive vehicle insurance policy offers coverage against own-damage which includes road accidents, natural disasters (landslides, earthquakes, floods etc.), man-made disasters (riots, strikes etc.), theft and fire/explosion.
  • It provides coverage to third-party damage and loss which includes property damage, bodily injuries, death and legal charges.
  • This type of motor insurance policy also offers personal accident cover to the owner. 

Add-On Covers for Vehicle Insurance

Now that you know about third-party and comprehensive vehicle insurance policy, it is time to catch up on the add-ons. The additional cover offers coverage to enhance your insurance policy. These add-on covers must be purchased from the same insurer by paying an additional sum of premium amount. 

Here are some of the most popular add-on covers

This type of add-on cover offers coverage to protect yourself from paying the depreciated value which is deducted from the settlement amount. When you have this add-on, the depreciation on your vehicle goes considered by the insurance company and thus, the amount of deductibles doesn’t go high.

  • No Claim Bonus Cover

While you can only earn no claim bonus when you don’t make any claim during your policy tenure, this type of add-on cover gives you the privilege of making claims and still being able to use no claim bonus during the renewal of your policy.

  • Consumables Cover 

This type of vehicle insurance add-on cover takes care of minor services such as nuts and bolts, engine oil, screen washers etc. which are not included in a policy.

  • Return to Invoice Cover

Is your vehicle lost or damaged beyond all the possibilities of getting repaired? If yes, then this add-on is a boon for you. Using this you can claim the invoice value of your vehicle in case of loss or irreparable damage.

  • Engine Protection Cover

A comprehensive vehicle insurance policy won’t cover the engine-centric or mechanical problems in your vehicle. Therefore, buying this additional vehicle insurance cover is a good idea if you want to protect your engine against problems like waterlogging. 

Apart from these add-ons, you can also buy roadside assistance to enjoy services in the time of emergency such as taxi, towing etc. Insurance companies also provide add-on covers for key replacement, personal belongings, personal accident cover etc. 

Also Know: Why Car Insurance is Important

Takeaways

If you are not buying a motor insurance policy just for the sake of following traffic rules but also to avail protection to your vehicle, yourself and even third-party property/person then you may buy a comprehensive insurance policy. You should check out policies offered by different insurers online based on rates, add-ons and overall coverage and compare them in order to see what is compatible with your needs. You can do this much.