What is car insurance?
Car insurance is an insurance policy which protects you, your car and an affected third party from financial losses arising out of an unforeseen incident.
As per the Motor vehicle act , it is mandatory in India to have at least a third party car insurance to drive vehicle on road. Having this valid mandatory car insurance prevents you from the hefty fines as well.
There are several optional covers to choose from in a car insurance policy. These are zero depreciation cover, engi
Types of Car Insurance in India
While planning to buy car insurance , you can choose from different types of car insurance.
1) Comprehensive Car Insurance
Comprehensive car insurance includes the third party liability and damages caused to the car and the owner of the car.Comprehensive car insurance can be opted with various add-ons such as Zero depreciation cover, Engine protector cover, Return to invoice, Key replacement and roadside assistance. These add-ons are very popular options as these provide a complete protection from financial losses.
2) Third Party Car insurance
Third party car insurance covers the third party liability which arises in the event of car accident. In this type of policy only the death, disability and injury liability of third party is covered. Third party cover is mandatory in India while driving the vehicle as per Motor Vehicle Act. In this way, this cover only protects you from the financial liability towards third party.
Difference between Comprehensive and Third party Car Insurance
Following table summarizes the coverage of Comprehensive and Third party Car Insurance
Coverage
Third Party
Comprehensive
Damages to Third-Party Vehicle
YES
YES
Damages to Third-Party Property
YES
YES
Personal Accident Cover (Optional)
YES
YES
Injuries/Death of a Third-Party Person
YES
YES
Damages/Losses to own car in case of a natural calamity
No
YES
Damages/Losses to own car in case of fire
No
YES
Damages/Losses to own car due to an accident
No
YES
Theft of your car
No
YES
IDV Customization
No
YES
Coverage against depreciation
No
No
Extra protection with customized add-ons
No
No
What are Car Insurance Add-ons?
Add-ons in the comprehensive car insurance are the extra safeguards for your private car by paying the extra premium.
Following are some of car insurance add-ons.
1) Zero Depreciation cover in Car insurance
Zero depreciation cover also known as Nil Depreciation or Bumper to Bumper car insurance policy is a car insurance policy which protects you from claim on deprecation value basis. It means that in the event of car accident, the comprehensive car insurance only covers the depreciated value of the car but when you opt for zero depreciation cover , it provide the full coverage irrespective of depreciation. Most of the insurance companies provide zero depreciation cover till the five years.
2) Zero depreciation with Consumables cover in car insurance
Certain parts, as well as components of your car, are subject to wear and tear in the normal course of their use. These parts and components are classified as consumables as they can be used only for a certain period. Therefore, consumables meaning in car insurance is that these components are being used up by the car and cannot be reused. In other words, such parts become useless after they are used once or the car is dismantled for some reason. These consumables include the brake pad, engine oil, lubricants such as grease, nuts, bolts, screws, washers, oil filters, radiator coolant, etc.
3) Return to invoice cover in Car insurance
Return to Invoice (RTI) insurance is an add-on cover that can be included in your car’s comprehensive insurance plan. It allows you to receive compensation in full (your car’s invoice value) if your vehicle is damaged beyond repair or stolen. This means going back to your car’s original value indicated on the invoice.
4) Engine Protection Cover in Car insurance
Engine protection cover in car insurance provides you the coverage for engine and gear box for any consequential damages. This could happen due to water regression, leakage of engine oil and undercarriage damages.
5) Road Side Assistance Cover in Car insurance
Road side assistance cover in car insurance provides the benefits of taking help in case of vehicle breakdown.
6) Tyre Protect Cover in Car insurance
Generally, the tyre damage isn’t covered in comprehensive car insurance unless the damage takes place in an accident. Tyre protect cover gives you the benefit to cover the tyre damages sucha s tyre burst, bulges and cuts.
7) Key Protection cover in Car Insurance
Key protection cover in car insurance provides the cover in the event of loss of keys or replacement of keys. This cover is also covers the cost of repairing the keys and key slot.
What is covered in Car insurance policy?
As per the standard car insurance policy, following cause of losses covered.
Damages or loss to the car that arises through accidents.
Covers the losses of incurred due to the theft of the car.
Damages or losses due the accidental fire.
Damages or losses that arise through the natural calamities such as floods, cyclones etc.
Personal accident cover
Third party Losses such as damages to the third party vehicle or property.
What’s not covered in car insurance policy?
As per the standard car insurance policy, following cause of losses not covered.
Damages or losses arising due to war and similar conditions.
Damages that arise when driving under the influence of alcohol.
Damages that arise when driving without a valid license.
Damages that arise when car insurance policy is not active.
Regular wear and tear.
How to select the best car insurance for your car?
Factors that must be considered during buying the car insurance policy.
Type of Policy:- If you choose third party insurance, your premiums will be quite affordable. Whereas comprehensive plans can be little costly.
IDV of Vehicle:- IDV of the car directly affects the premium of car insurance. This also affects the claim amount.
Add-ons:- Every add-ons have their own prices and coverage therefore, the number of add-ons significantly affect the cost of car insurance policy.
