Buying a car is a big event for many Indian families. Just by celebrating, you should not forget to buy insurance under a good insurance plan. Just the kind of attention invested in buying a new car, the equal effort has to be taken in buying the right car insurance. Else you’ll end up with car insurance that might not fulfil your requirements.
An excellent way to know more about car insurance is by getting acquainted with the different types of car insurance policies available in the market. Knowing what each car insurance plan offers will help you choose a policy that covers all your concerns.
Let’s dive deeper into the subject of types of car insurance before you buy one:
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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. This is a standard and basic insurance plan that all car owners must have 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, the 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, 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.
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 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.
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 the 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 travelling 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.
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.
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© Ruchi Verma
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