What is Covered in a Motor Insurance Policy?

Team Digit, 18 Jan 2019

For every car owner in India having an insurance plan is compulsory as stated by the Motor Act of 1988. Usually, new vehicle owners buy a car insurance plan as quickly as possible to cover their vehicle and to be safe on the Indian streets. In India, there are a number of insurance plans that are offered by several car insurance companies and it can be difficult for anyone to choose the insurance that is best for them.

The different types of car insurance plans vary from one another depending on the kind of coverage that they provide to the customers. Some of the different kinds of car insurance coverage include:

1. Collision Coverage

This type of coverage is primarily meant to cover for the expenses of a car when it goes through an accident of any sort. The insurance company pays for all repairs of the insured vehicle when it gets through an accident. If the cost of repair of the vehicle after an accident is more than the actual price of the insured vehicle itself, then the insurance company only compensates the amount which is equal to the cost of the vehicle. Collision cover should be included in all car insurances. For older vehicles, the collision coverage of the vehicle should be as low as possible.

2. Liability Coverage

According to the Motor Act of 1988, all car insurances need to have liability coverage. This coverage not only takes care of the repairs to the insured vehicle but also gives financial help in the medical fees of the insured individual(s) or any third person who may be injured through an accident. The coverage takes care of the medical expenses and property damage caused to any third person who was harmed as a result of the insured vehicle. For those who are buying car insurance, this coverage is necessary, and the amount of sum assured from this type of coverage should always be checked before the insurance is bought. The higher the sum assured from this coverage, the more will be the premium in total for the car insurance.

3. Personal Injury Coverage

The personal injury cover is solely meant for the insurance company to cover the driver, the passengers of the vehicle and any other person who is directly insured under the car insurance plan. The insurance company pays for the finances of all those who are directly insured in the event of an accident no matter whose fault may have caused the accident. This type of coverage is a sure way of knowing that all medical bills will be covered by the insurance company.

4. Comprehensive Coverage

A comprehensive cover is an all-round cover that protects the insured vehicle from all risks. Risks that are caused by the vehicle, passenger, driver, third party individual, third party vehicle and third party property are all taken care of in this coverage. This coverage also includes risks against weather, flood, theft, and fire. If a person installs anti-theft systems in the insured vehicle, he will pay less on the premium for the car insurance.

Other than this popular coverage, there are several other external add-on coverage plans that anyone can opt to further make their car insurance plan unique and more comprehensive. For those individuals who do not want a car insurance plan that has a high premium, they can opt for having a third party car insurance policy.

A third party car insurance policy is a plan that meets the requirements by law as stated by the Government of India. The law states that all car insurance plans should have third party liability incorporated in the plan itself. This car insurance plan provides precisely that. The plan takes care financially and legally any damages regarding health or property that the insured vehicle has caused to any third person. Though the policy takes care of all external affairs for those individuals who are not related to the plan, it does not cover for the repairs to the damaged insured vehicle and the medical expenses on the insured.

Many times, a third party car insurance policy is clubbed with a comprehensive cover to make the ideal car insurance plan. For those who are buying a car insurance plan, it is essential to understand that the premium of the plan itself increases with each additional coverage which is added.

Team Digit

Digit is a General Insurance company on a mission to Make Insurance Simple for people. We are backed by Fairfax, one of the largest insurance companies in the world.

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