DIFFERENT TYPES OF CAR INSURANCE IN INDIA

You drive your vehicle to work or take your family out on trips and fun drives. Being a responsible car owner, you take care of your vehicle and ensure that it is in good condition. You obey all the road rules and main good driver etiquettes.

Despite all these precautions, your car can meet with unexpected events on the road such as minor accidents, tire bursts, man-made disasters, breakdowns and many more. And that’s why, when you buy a car, it becomes mandatory to buy car insurance.

In the market, you will come across many types of car insurance that are subjected to specific terms and conditions of your policy. These car insurances will offer protection for any financial loss during any unfortunate events with your car. When you meet with an accident, you should be focusing on your health and recovery from the trauma instead of stressing about the financial losses. To get over such episodes of anxiety, you should always have the correct car insurance.

Different Types of Car Insurance Plans Available in India

Insurance coverage is a kind of legal protection available for your vehicle. Along with basic coverage, the policyholder can also add various types of add-ons to enhance their protection under the policy.

Let's discuss some of the car insurance coverages available in India.

Zero depreciation insurance

This type of insurance cover is mostly used as an add-on with the various car insurance policies in India. Suppose you have damaged your vehicle and you need to replace the parts. The insurance company will consider the value of the parts for claim settlement.

A zero-depreciation cover will ensure that you get the full claim amount for your expenditure.

Third-party liability cover

With third party car insurance, you will get the following benefits:

The cost of repairs or replacement of the third party's damaged vehicle

Liabilities due to death of the third party

The total cost of hospitalization and treatment charges for the third party

According to the Indian Motor Vehicles Act, third party car insurance is mandatory to drive on Indian roads. The insured amount should be according to the driving conditions. The amount should be sufficiently high to avoid any hefty payments from the insurance holder's side.

Collision Damage or Own Damage cover

When you buy a collision damage car insurance plan, the expense of repairing your damaged vehicle gets reimbursed. To determine the total expense of collision coverage, the age and the insured declared value of the vehicle is taken into account while paying the premium. The insured declared value dedicated depends on the market value of the vehicle.

Then when you lodge a claim under the collision coverage policy, the maximum amount payable would be determined by the IDV. However, if you have purchased a vehicle on loan, you need to hold the collision coverage.

Comprehensive car insurance

This is the maximum level of protection you can get for your car. It covers damage to your vehicle, personal accident cover, liability for third parties and non-collision damage that includes fire, theft, floods and storms. You can also enhance the insurance policy with various add-ons.

Personal Accident Cover

If you want to protect yourself by opting for reimbursement of medical expenses after an accident, you can opt for the personal accident car insurance cover.

What Are the Various Car Insurance Add-Ons?

Some of the important add-ons with your car insurance policy is:

Zero Depreciation Cover: The market value of your vehicle drops with every passing day since it's purchased. This add-on cover ensures that your car value does not reduce, and the insurance company will not consider the depreciation during the final settlement.

Engine Protection Cover: This add-on cover is useful when you are stranded in the middle of the road due to a car breakdown. The Road Assistance or RSA will immediately come to your rescue and repair your car on the spot of accident or tow it to the nearest service station.

The Consumable Cover: This add-on covers the consumables of your car like lubricating oil, nuts, screws and bolts, etc

Tyre Protection Cover: Tyre damage does not get covered by your standard insurance policy unless it takes damage during an accident. This is why tire protection add-ons give the policyholder benefit to cover for tire damages. The various tire damages include bulges, cuts and tire bursts.

Passenger Cover: The add-on covers everyone present inside the vehicle against any emergency.

Return To Invoice Cover: This add-on ensures that in case of theft or loss of a vehicle, you get the total ex-showroom price of your car as compensation and not just the IDV value.

Which Is the Best Car Insurance?

Getting a comprehensive car insurance policy is always advised as it offers complete protection against third-party insurance, damages to your vehicle and the medical expenses related to the injury of the owner or driver.

FAQs

Q1. What are the 3 most common types of car insurance plans?

Ans. The three types of car insurance which are universally offered are collision insurance, liability and comprehensive car insurance.

Q2. What is basic car insurance?

Ans. Basic car insurance, which is also known as liability insurance, can be broken into two types of insurance cover- personal injury and property damage.

Q3. What is a CPA cover?

Ans. The compulsory personal accident or CPA is the stand-alone personal accident plan. It exclusively covers the owner or the driver of the insured vehicle.

Q4. What is IDV?

Ans. The insured declared value of a car or IDV is the maximum amount of money that your insurance company will pay for your vehicle if it is stolen or gets damaged beyond repair.