WHAT IS A PACKAGE MOTOR INSURANCE AND WHAT ARE ITS BENEFITS

As the term “Package” suggests, Package Motor Insurance is a type of insurance plan that covers two types of insurance together encapsulated in one. It comprises third-party insurance and personal insurance. It is mandatory to have at least third-party insurance as per law while driving on Indian roads and hence most people buy it adhering to regulatory requirements. However, a package motor insurance covers damages to one’s own vehicle in addition to third-party damages and liabilities.

Attractive Benefits of a Package Motor Insurance

Extensive Coverage: A package motor insurance provides protection to the insured’s own vehicle, and personal injuries to oneself including the passengers. It even incurs the damages caused due to natural calamities such as floods and earthquakes. In case, the vehicle owner is devoid of third-party insurance then the person is not eligible to bear expenses arising out of these unforeseen events and has to spend from their own pocket.

Value for Money: Getting two insurances in just a single package is quite beneficial for any customer or vehicle owner. The vehicle owner doesn’t need to fret over huge expenses on repairs or any other denting work. Everything is borne out by the insurance policy company under this Package motor insurance.

Relevant Add-ons: Unlike any third-party motor insurance that gives the applicant limited coverage on their vehicle, Package Insurance offers enhanced coverage options. For the customer’s satisfaction and needs, it offers add-on covers such as zero depreciation cover, roadside assistance, engine protection, passenger cover etc.

Option to Customize IDV(Insured’s Declared Value): IDV is the current market value of any vehicle. A lower IDV can result in a lower premium with less benefit and can be exempted from expenses on thefts or natural calamities like events. So it’s suggested to take an adequate cover while availing of Package Motor Insurance.

Inclusions under a Package Motor Insurance

Accidental Damage: In case the rider hits up any road accident and damages oneself and the vehicle both together, then the expenses on medical treatments and repairing of the vehicle are borne out by the insurance company.

Vandalism Caused due to Riots: Due to the political instability in certain areas of the country, often, vehicles tend to sustain damages in the event of riots or violent protests. All these types of damages are covered under a package policy.

Fire: Destruction to the car caused by fire can be recovered by opting for a package insurance policy. Such covers reimburse damages caused due to garage fire, engine fire, and fire caused due to mechanical dysfunction.

Damage Caused by Natural Calamities: Unprecedented natural disasters such as flood, earthquake, cyclone etc. can ruin any vehicle and the expenses can be covered under a Package scheme. People who live in disaster-prone areas can benefit a lot by opting for this policy.

Exclusions of a Package Motor Insurance

There are certain situations or events which are not covered under Package Motor Insurance. Let’s have a look at some of these:

Unlicensed Driving: In case someone is found driving without any license card then the losses caused by this act shall not be borne out under this Package Motor Insurance by the insurance company.

Drunk Driving: This package shall not incur any expenses in case the rider is found driving while in drunken mode. Everything will be borne out of one’s own pocket money.

Electrical or Mechanical Breakdown: Generally, under the standard motor policy, a mechanical and electrical breakdown is not covered unless the insured can prove that damage was caused due to any natural calamities.

Wear and Tear Damage: The package motor insurance does not cover any loss or damages to the tyres of your vehicle unless it is directly caused by any accident.

Loss caused due to nuclear weapons or war: It does not cover any loss or damage caused to the vehicle as a result of war, mutiny, nuclear weapon or other such dangers.

Key Takeaways

In case the insured person (policyholder) ends up injuring another person on the road due to any negligence, then a Package Insurance Policy guarantees the coverage of the loss caused to the third party. It even covers the non-criminal liability expenses in case the insured is proven faulty and has caused bodily or property damage to the third party. In short, this Package Insurance Policy is a good one-time investment for any frequent traveller.

FAQs - Frequently Asked Questions

Q1. What is not available in Packaged Insurance Policy?

Ans: Commercial package policies can't include certain items like workers' compensation or directors-and-officers insurance. Workers' compensation insurance is required by law and must be purchased as a separate policy. Directors-and-officers policies are necessary for non-profit organisations.

Q2. What benefits does a Packaged Insurance Policy offer?

Ans: Despite the extensive coverage a package motor policy offers, you may still wonder if you should opt for a package cover or stick to only a third-party cover. It is more effective to have package motor insurance for a relatively new vehicle as the market value would be high, and any potential damage can result in a huge financial burden.

Q3. How can the insurers track their Packaged Motor Insurance claims?

Ans: Once the insurer is informed and the claim form is submitted along with the required documents, the claim is processed. The insured can track their claim status on the insurer’s website or a designated portal