Posted on: April 26, 2023 Posted by: Santosh Kumar Comments: 0

While third-party car insurance is mandated by law, experts always recommend going for comprehensive insurance. However, if you make a rash decision and buy a comprehensive insurance policy that does not offer the coverage you need, you might find yourself in a situation where you are paying unnecessary premiums without being covered in your hour of need. Making the right choice requires time to understand what coverage you are legally obliged to have as well as what policy will best protect you in case of a financial crisis. Along with the basic coverage provided under a policy, you have a variety of add-ons to augment the level of protection. So, to help you decide on the ideal choice, let’s discuss the various forms of car insurance coverage to choose from.

Understanding car insurance

 Car Insurance

Car insurance financially safeguards you against your liabilities against the injuries or property losses caused to a third party and covers damage to your vehicle. It will also cover the damage suffered by you or your passengers in an accident or hit by an underinsured or uninsured car driver, medical expenses incurred as a result of the accident will also be covered under the insurance. Your insurance covers you up to certain amounts according to the limitations that you and your insurer agreed upon.

5 different types of car insurance coverage 

Discussed below are some of the major insurance coverage types

1. Third-party liability coverage – Third-party liability coverage is mandated under the Motors Vehicle Act. As a mandate under The Motor Vehicles Act, third-party insurance coverage is an indispensable necessity to legally drive on public roads. This type of policy covers –

  • The cost incurred to repair or replace a third-party vehicle.
  • Hospitalisation and third-party medical expenses.
  • Liabilities brought on by the demise of a third party.

2. Personal accident cover: When choosing to be reimbursed for medical expenses incurred as a result of an accident, personal accident car insurance coverage is utilised to safeguard yourself or in other terms the owner-driver of the vehicle. Besides the necessary liability insurance, you can choose to include additional coverage to lessen certain risk factors.

  • All costs sustained due to an accident will be covered by the personal accident cover.
  • Medical bills for the driver as well as the other passengers will be covered under this coverage type.
  • Regardless of who is at fault, the insurance provider will cover the medical costs.
  • To get the most out of your investment, you can get personal injury protection for the owner, driver, and passengers of the car.

3. Comprehensive coverage: A comprehensive insurance policy offers the maximum possible coverage. This sort of automobile insurance offers the highest degree of protection as it covers third-party liabilities, personal accident cover, damage to one’s own vehicle and non-collision damages namely fire, storms, theft and floods.

Comprehensive insurance coverage will cover all liabilities associated with your vehicle, the driver, your passengers, third-party drivers, third-party passengers and third-party property. This type of insurance coverage will also cover the losses arising from fires, damage due to weather conditions, theft and floods.

The comprehensive coverage will take care of multiple problems that car collision insurance does not. Note that the decision of going for a comprehensive car insurance policy is significantly related to your financial condition too, as the premiums for this type of policy are usually high. Installing anti-theft devices and other security-enhancing technologies can help you lower the insurance rate stated by your insurance provider.

4. Collision or own damage (OD) cover: With collision or own damage coverage, the costs associated with repairing your damaged car are included under the policy. The age of the vehicle and the IDV or insured declared value are crucial factors that are taken into account when determining the premium for collision coverage. The market value of the car serves as the foundation for the IDV.

The IDV after deducting the accrued depreciation establishes the maximum amount payable under the policy when a claim for collision coverage insurance is made.

  • Having collision insurance is a must if you have financed your car.
  • If the policy provides for collision cover, the insurance provider will pay for the insured’s car’s repairs in case of an accident.
  • In a few instances, the cost of repairs will be higher than the present market value of the car. Thus, in such situations, the insurance provider will provide coverage equivalent to the car’s current market value.
  • Unlike comprehensive insurance, collision coverage should be acquired as per the age of your car. Also, if buying insurance for a brand-new car, check that collision coverage has been included.
  • The collision coverage for older vehicles might be as minimal as possible.

5. Zero depreciation cover

Zero depreciation in car coverage is often provided as an add-on to basic car insurance policies in India. Let’s say your car needs repairs since it was damaged. The depreciated value of the parts will be considered by the insurer when settling claims. With zero depreciation car coverage, you can be assured that you will be reimbursed for the full amount of your claim without having to take cost depreciation into account.

This sort of automobile insurance delivers the highest protection as it covers accident coverage, third-party liability, car damage, and all non-collision damage namely theft, storms,  fire and floods.

Not every type of car insurance coverage is suitable for everyone. To choose the best plan for your special preferences and escape disappointment, it is essential to have a thorough understanding of your needs as well as the specifics of your insurance plan. What do we suggest? We suggest you invest in a comprehensive insurance plan as it furnishes your car with an extensive level of coverage at the most cost-efficient prices.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.