Types of Car Insurance Coverages in India

A car is a significant investment that must be protected from unforeseen accidents. The right car insurance protects you against risks like vandalism, damage, or theft. However, navigating the various types of car insurance and their specific coverage options can take time and effort.

Car Insurance Coverages in India

So, if you are a car owner and need help understanding the different types of car insurance, this article is for you!

What is Car Insurance

In simple terms, car insurance is an agreement between the policyholder and the company. The policyholder agrees to pay the premiums regularly, and in return, the company assures them that it will take care of the car in case of any unforeseen accident.

However, the things covered under car insurance can vary depending on the insurance company you are considering for your policy.

Why Do You Need Car Insurance

The following section lists 5 important reasons why one should go for car insurance:

1. Protection: This protective feature is included in comprehensive car insurance policies, where the insurance company covers third-party damages and the insureds own damages.

2. Mandatory: Every vehicle running on Indian roads must have third-party legal insurance documents, per the Motor Vehicles Act of 1988. If somebody is caught without insurance papers, he or she is liable to pay a penalty.

3. Financial Support: Many insurance companies provide personal accident coverage with car insurance. This benefit is either paired with the car insurance or the policyholder has to buy it as an add-on.

4. Covers 3rd-Party Damages: Getting a third-party insurance policy will safeguard you from the expenditures of third-party damages. If some other person or vehicle gets affected in a car accident, the insurance company takes care of all the expenses related to your car accident.

5. Legal Costs: If you get stuck in legal procedures due to the accident, the case may take months or sometimes even years to resolve. In that case, the cost of lawyers and other legal procedures will be handled.

Types of Car Insurance Coverages

The various types of car insurance coverage are explained below:

1.Third-Party

Third-party coverage is mandatory car insurance as per the Motor Vehicles Act, 1988, for every individual buying or driving a vehicle. It provides coverages against any kind of accidental liability or financial loss.

• Mandatory: Yes

• Suitable For: As this is mandatory insurance, it has to be bought by every single individual.

• Benefits: Legal Coverage, Financial Assistance, Round-the-Clock Availability, Cost Effective, etc.

2.Comprehensive

Comprehensive car insurance covers all kinds of damage your car faces, not just collisions. These include damages from fire, riots, theft, and any sort of natural disaster. The best part is that you will get both third-party and own damage coverage of your car by choosing this type.

• Mandatory: No

• Suitable For: This is suitable for every car owner as it provides complete protection covering all expenses.

• Benefits: Claim Settlement, Convenience, Network Garages, Own Damage Cover, etc.

3.Own Damage

An Own Damage insurance policy covers all vehicle damages not covered by third-party liability. It is a fantastic option for car owners that helps them avoid unnecessary high costs incurred during unforeseen damages.

• Mandatory: No

• Suitable For: People who want to provide an extra layer of protection other than the third party.

• Benefits: Cashless Repairs, Add-Ons, No Claim Bonus, etc.

Which Type of Car Insurance Coverage is Suitable for You

The type of car insurance you opt for entirely depends on your cars model and specifications. However, comprehensive car insurance is a solution to all of this.

Comprehensive car insurance provides coverage against all types of damages, whether caused by you or a third party.

Apart from this, comprehensive car insurance also covers the expense of hospitalisation of the driver as well as the passengers if they are injured during the accident,

Where to Buy a Car Insurance: Online or Offline

Owing to technological advancement, buying car insurance has never been simpler. Contrary to previous times, nowadays, you don’t need to visit insurance companies to purchase one. If you want to buy insurance for your car, you just need to visit the official website of your preferred company and follow the process as directed.

However, some people might still like to do it the old way, such as visiting the branch office and manually filling out all the documents. Maintaining documents manually is tedious, and policyholders need to be very careful. They might need to visit the branch office more than once to complete their work.