Types of Motor Vehicle Insurance

Motor vehicle owners in India can select between different types of motor vehicle insurance available here. The foremost objective is to protect vehicle owners against damage and accidents.

Motor insurance policies online are based on coverage refer to the type of insurance plan selected, which can be categorized into the following:

  • Comprehensive Insurance.
  • Third-party Liability Insurance.

Each of the categories has been discussed in detail in the following sections.

Comprehensive Insurance

A comprehensive vehicle insurance plan includes third-party liability as well as any expense incurred by the policyholder due to theft or accident of the vehicle. In case the policyholder is injured, the personal accident cover entitles the policyholder to claim compensation due to death or injury due to an accident.

The benefit of taking on a comprehensive motor insurance policy is that the add-on plans or riders extend added benefits to the policyholder without taking out multiple policies. Therefore, this type of insurance plan extends security and protection to the policyholder for almost any situation that they might encounter.

Benefits of Comprehensive Motor Insurance

Some of the benefits of selecting comprehensive motor insurance in India include:

  • Financial security to cover emergencies and peace of mind.
  • Covers lawsuits that include legal fees against policyholders due to the accident.
  • Comprehensive coverage protects policyholders and vehicles.
  • Damages to the vehicle caused by the policyholder are covered by this insurance cover.
  • If the policyholder is at fault for an accident then a claim can be made for an incurred loss.

These are some of the many benefits that a comprehensive plan offers to policyholders.

What is covered under a Comprehensive Insurance Plan?

 A comprehensive vehicle insurance plan, as the name suggests, provides wide coverage of every imaginable aspect related to the vehicle insured and the interests of the policyholder. However, it is ideal to know the different aspects that are covered under these insurance plans.

Some of the different aspects that are covered by comprehensive insurance include:

  • Damage caused by fire, severe weather, and natural disasters.
  • Damage caused by a third party or animal.
  • Damage caused to the vehicle due to civil disturbances like riots.
  • Theft and vandalism.

What a Comprehensive Insurance Plan Doesn’t Cover

However, policyholders must make a note that comprehensive plans do not cover the vehicle or policyholder in the following instances:

  • Damage caused to the vehicle due to drunken driving or the use of drugs.
  • Damage caused to vehicle when the person driving does not have a valid driver’s license.
  • Damage caused to the vehicle due to mutiny or war.
  • Mechanical or electrical breakdown, wear and tear of the vehicle.
  • Depreciation.

 A comprehensive insurance plan offers third party cover as well, making it quite exhaustive. To make it financially more viable, policy buyers can opt for monthly premium payments, allowing them to have a vehicle insurance cover which protects their interest by selecting this type of motor insurance policy.

Third-Party Liability Insurance

Third-party liability insurance is mandatory for every vehicle owner in India, by law. Essentially, these insurance plans protect the policyholder’s interests from damages caused to a property or an individual by the policyholder.

It can be said that a third-party cover helps lower the risk and liability of the policyholder in a number of situations. Also, this cover is recommended for inexpensive and old vehicles that are cheaper to repair.

Understanding How Third-Party Insurance Cover Works

The first step in understanding how a third-party insurance cover works are to make a note of the terminologies used. Some of the commonly used term associated with third-party cover includes:

First-party: Policyholder or person who has purchased an insurance policy

Second-party: Insurer or insurance company

Third-party: Claimant or person who raises a claim for damages caused by the first party

If the policyholder is involved in an accident with a third-party, then the policyholder is liable to pay for damages or injuries caused. When an accident takes place, the policyholder must inform the insurance company at the earliest and apprise them of the situation.

Also, it is essential that information is gathered regarding the accident and provided to the insurer with the following details:

  • Description of accident along with date and time.
  • Details of insurance and policyholders present during the accident.
  • Describe injuries sustained by driver, passengers, and/or to property or vehicle damaged.
  • Details of witnesses.
  • Weather and visibility condition at the time of the accident.
  • Photographs of evidence collected from the accident site.

In case the police enquire, furnish details of the insurance company and make a note of the First Information Report (FIR) number, if applicable. Additionally, if the accident was not due to the policyholder, then the claimant can raise a claim for the cost of hiring a motor vehicle, repair costs, and injury compensation as per the conditions stated in the insurance policy document.

Therefore, before buying a policy, policyholders should carefully read the insurance policy document to check what all get covered under the policy. 

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