Ruchi Verma
Buying a car is a big event for many Indian families. It’s a milestone worth celebrating, but amidst all the excitement, don’t forget about one crucial step: securing the right insurance. Just as much attention should be given to your car insurance as to the car itself; otherwise, you might find yourself with a policy that doesn’t meet your needs.
An excellent way to know more about car insurance is by familiarizing yourself with the various types of car insurance policies available in the market. Understanding what each plan offers can make a significant difference in your choice. You want to find affordable car insurance that aligns with both your budget and your specific requirements. In some situations, like when you’re not using your vehicle, exploring options such as sorn insurance can also be beneficial to save costs. This type of insurance allows you to declare your vehicle as off the road, by doing so, you can reduce your insurance premium.
Let’s dive deeper into the subject of types of car insurance before you buy one:
Also read: Self-drive car rental in India on Budget
Third-Party Car Insurance
This type of insurance is made mandatory by the Indian Motor Vehicles Act. Third-party car insurance secures against any liability/damages caused to a third-party individual due to your vehicle’s fault. All car owners must have this standard and basic insurance plan before hitting the road. Failure to comply with it will attract heavy penalties from the concerned authorities.
Irrespective of your driving skills, the busy Indian roads can make you prone to accidents even because of the slightest mistake. In such cases, third-party coverage will come to your rescue. The only downside of this policy is that it doesn’t cover the owner’s damages. Read the next policy to escape the burden of paying out of your own pocket, and also read its wide range and benefits offered.
While choosing a third-party insurance cover, make sure you check the following:
- The process of policy renewal
- No-claim bonus benefits offered by the insurer
- IDV value and the premium amount
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Comprehensive Car Insurance
Unlike the third-party car insurance policy, comprehensive insurance covers you for both third-party liabilities and your own damages, making it an all-inclusive policy. This insurance plan is ideal for car owners who are looking for the best coverage, irrespective of the premium amount. Despite offering decent coverage in its standard plan, comprehensive insurance comes with customization features. If you feel the coverage could be better, you can purchase add-ons for an extra premium. Your car insurance broker should be able to advise you of the best policies for your needs at the best available prices.
The standard comprehensive car insurance plan covers the policyholder against damages caused to the vehicle because of theft, accidents, fire, or natural calamities. It even covers personal injuries caused because of road accidents and losses to a third party. But if you want coverage beyond these areas, you should look for the riders available with the plan and purchase the ones you feel would enhance the coverage, keeping you stress-free in the long run.
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Other Popular Car Insurance Coverages
While third-party and comprehensive car insurance plans are the most popular options available out there, you can also consider buying any of the following car insurance coverage, depending on your requirements:
Collision Coverage Insurance Plan
If you want to secure your car against damages caused because of collision, you can go ahead with the collision coverage insurance plan. However, it should be noted that the insurance company will only be liable for the repair costs of your vehicle if it causes damages because of a collision and not for any other reason.
Uninsured Motorist Protection Plan
If you ever met with a road accident because of the fault of another driver, you will be entitled to receive compensation for the damage caused to you and your vehicle. But if that driver doesn’t have any active insurance, you will end up paying the car repair cost and your medical cost from your pocket. You can get yourself covered under the uninsured motorist protection plan to save yourself from such financial strains.
Also, Read – Where should I buy my two-wheeler insurance? Online or Offline?
Personal Injury Coverage Plan
The personal injury coverage plan protects the owner-driver and other people sitting in the car against medical costs due to a road accident. If you take this insurance, the insurance company will look after the medical and hospitalization expenses of the policyholder or car owner and the passengers that were sitting in the vehicle during the road mishap.
Each of these three insurance plans offers very limited and specific coverage, so their premium is comparatively lower than the comprehensive insurance plan. Before you finalize any of these insurance plans, be sure to carefully read the inclusions, exclusions, and terms & conditions of each to avoid any unpleasant surprises during claim filing.
Commonly Available Car Insurance Add-Ons You Must be Aware Of
As mentioned above, add-ons can be purchased separately for extra coverage. Consider these add-ons as customization features that can be chosen as per your precise requirements to enhance your comprehensive insurance policy’s coverage. While different insurance companies may have different riders, the commonly available ones are:
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1. Zero Depreciation Cover
Tangible things tend to depreciate with every passing day, and your vehicle is no different. Depreciation refers to a reduction in value due to various reasons, wear and tear are the most common. Now, if you have taken a comprehensive policy with a zero depreciation cover, the insurer will calculate your claim request without considering depreciation, leading to higher claim reimbursement.
But if you haven’t upgraded your policy by purchasing a zero-depreciation car insurance plan, the insurer will deduct the depreciation amount before releasing your claim, which translates to a lower claim amount. Every car owner should get a zero depreciation cover to keep his out-of-pocket expenses to a minimum during any road mishap.
2. Engine Protection Cover
Not many know that any damage to the vehicle’s engine is classified as consequential damage, which is not generally covered under any comprehensive insurance plan. So if your vehicle meets with a road accident and the engine gets affected, your insurer won’t cover the damage or repair cost of your car’s engine.
To be able to get reimbursement for your vehicle’s engine repair cost, you must purchase the engine protection cover. The engine is a very crucial component, and its repair attracts a lot of money. If you don’t want to bear such expenses unexpectedly, it is best to give its responsibility to your insurer by buying the engine protection cover.
3. Roadside Assistance Cover
If there is one thing that car owners can need at any time during their travel, it is immediate roadside assistance. If your car suddenly breaks down, you can easily reach out to your insurer, asking them to send immediate roadside assistance. But if you don’t have this cover, you will have to find assistance yourself.
It can be really difficult at some places and times, especially when you’re traveling on a new route or a route where a repair shop cannot be located. Roadside assistance cover will give you extra comfort, as you can ask for help 24*7.
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4. Tyre Protection Cover
The standard insurance covers tyre damage costs if they are damaged due to a road accident. But if your car’s tyre bursts, gets damaged due to cuts, or has bulges for any other reason, you will have to bear its repair costs from your pocket. If you often drive on trails that are harsh on tyres, you should get the tyre protection cover to cover its repair costs.
5. Return to Invoice Cover
Every car owner exercises utmost care while driving, but the chance of encountering a road accident cannot be entirely ignored. If your car meets with an accident where the vehicle gets damaged beyond repair, you would want your insurance company to compensate for the loss.
If you want fair compensation, i.e., ex-showroom price or the last invoice value of the car, you must purchase a return to invoice cover. If you purchase this cover, you will also be secured if your car gets stolen.
6. Consumable Cover
While things like the vehicle’s engine, tyres, and other parts get a lot of attention, consumable parts like engine oil, grease, air conditioner gas, nuts, bolts, etc., get shadowed by other superiors’ tools. If you don’t want to spend a higher amount on maintenance, you should consider purchasing a consumable cover as the standard car insurance doesn’t include them in their coverage.
7. Passenger Cover
If you often drive with your family, friends, or colleagues around in your car, you must secure them against any unpleasant road mishap. Comprehensive car insurance only covers the owner-driver’s hospitalization and medical expenses and not the medical costs of other people sitting in the vehicle. The passenger cover add-on will ensure the insurance company pays for the medical and hospitalization expenses of the passengers too.
The number of add-ons can be intimidating, but their serviceability can save you during unfortunate times. With each rider, you add to the primary car insurance plan, the premium increases. So choose and add only those riders that you feel are extremely necessary and helpful.
Now that you know the A-Z of car insurance and the related add-ons, you shouldn’t face difficulty choosing the best insurance plan for your vehicle. If you cannot spend more on premiums, go ahead with liability-only car insurance that only covers third-party liabilities. But if you’re only concerned about you and your vehicle’s safety, irrespective of the premium amount, go ahead with comprehensive insurance. You can also purchase the add-ons, as mentioned above, for extra coverage.
Also read: Where should I buy my two-wheeler insurance? Online or Offline?
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© Ruchi Verma
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Having a car insurance is must. As you also mentioned that no matters how careful the driver is, but we cannot predict what is waiting for us. In such cases, having a car insurance works as a cushion.
Exactly and for all bad times we need to be ready and so car insurance is must !!
Ruchi, you said it right just buying the car is not the goal achieved, we need to find the right insurance for happy journey further. Thanks for the exhaustive list for us to consider pointers before purchasing the car insurance.
It’s really important to understand that insurance is not only important but also need to know what other options are available!!
Yes, we have just got a new car and then i came to know in detail about all the insurance plans. was stunned to listen to each of its benefits. thanks for this info
A very handy guide and an absolute read for every road-tripper !
Wow such an informative post ruchi. Yes car insurance is must for managing other expenses that can happen in future after buying car. You have explained all important pointers regarding this so well in this post. Indeed a useful post for those who are in process of buying car.
Not having a care is enough, insurance is the most important thing. We don’t know what may happen in future. So, being ready for any such situations is really a necessity.
This is the most in depth and comprehensive article about car insurance that i have ever read. You haven’t left out anything. Your effort and knowledge both are visible.
Thanks for this post. It is so important to have a good comprehensive insurances for the cars. It benefits in many ways and helps in emergency situations. I am planning to buy a car and this is so helpful.
It is important to get a good insurance for our cars. This guide will be very necessary whenever we are going to consider one.
A very useful article yet again. I generally opt for a zero depreciation cover while purchasing a car policy. I also make sure to opt for a vendor which provides me a hassle free experience in case I opt for using my car policy to get my car fixed. I don’t like to pay for damages first and then claim from the insurer. I’d rather let them take care of everything.
When the car insurance comes up for renewal, one is flooded with calls from companies. In such a scenario it can be challenging to choose the right policy. Your post is really useful in understanding the pros and cons.
Very comprehensive and well explained Ruchi. Yes car insurance is very important as when a situation arises, it can become expensive to pay from one’s own pocket so better get a cover and stay insured.
Car insurance is crucial and one must be well-informed about the available options and the points to be considered as well. This post is very helpful and has all the relevant information.
My father always taught us the importance of insurance since we were in college. The day we bought a car we knew how important it was to get it insured and searched for the best suitable option for us.
This is such an extensive post around car insurance policies. We have the car at home but was not much aware of these many policies. quite informative and helpful for one to take informed decisions while looking for policies related to car
Wow this is exhaustive list for us to consider pointers before purchasing the car insurance. This is must before buying any car .
Very informative, one must know all these details before investing in the vehicle. Through this post, I also learned different types and modes of car insurance.
Having a car insurance is definitely very necessary. No matter how carefully or beautifully the driver drive the car , noone knows when what will happen . You have explained so beautifully.
This is such a. helpful post for anyone looking for car insurance. It is always good to understand, do the research and be aware of all kinds of offers that can be beneficial to you.
This is very useful information. Thanks for sharing it. Car insurance is mandatory in India but very few people know about the different types of insurances.
This was really helpful
Well explained! We get so bogged down with no of insurance schemes available. Your post is a good guide on how to select the right one.
Very well researched insightful updates regarding car insurance. The car buying process starts from the survey of different brands of cars and eventually ends at having the right Car Insurance. It secures us from all the uncalled mishaps.
Something that is totally non negotiable. I also consider my own factors like whether I will be taking long road trips while planning for my insurance
Never knew there was a lot of things to consider for car insurance. ? ? post.
A very helpful and detailed post. Insurance is a must, and this guide would prove handy to someone buying a new car.
Thank you for the in-depth information about car insurance, Ruchi. I am so bad at this. I have to rely on someone to help me out. I will try to figure it out myself now.
This is bit difficult for me to understand as I these matters are not looked by me. I feel that you have explained well for those who are into it. May be useful for me in future.
A well-researched and comprehensive post. You have explained the terms really well. Most people are not aware of the jargon and end up being taken for a ride.
Quite helpful for car owners or those planning to buy one
This is full of knowledge and many pointers are not so commonly known. Thanks for sharing. I will be checking my policy against these highlighted points now. 🙂
This is a very helpful post for all car owners. We usually research for a month before taking our car insurance. Your post will be helpful in the future.
I work in an general insurance company and i have knowledge about all types of insurance policies and you have covered all the add on covers perfectly.
Good post. I have no idea about any insurance let alone car insurances. At least with these informative posts by well-informed bloggers like you, we know a little of everything.
An extremely useful, well-researched, and comprehensive post on Car Insurance. Bookmarking this one. #MyFriendAlexa #TinasPicks