Different Types of Car Insurance Policies Available in India

Car insurance is a type of motor insurance that covers all types of cars against loss or damage due to accidents, natural calamities, fire, theft, etc. There are 3 types of car insurance to provide different types of coverages as per your needs, however, at least a third-party car insurance is mandatory by law in India.

Comprehensive and own damage plans also allow you to buy add-ons to further enhance protection for your car. So, getting car insurance is the best way to protect yourself from financial stress in such situations.

Here’ why you should get a car insurance policy:

• Legal Compliance: Having at least a third-party car insurance is mandatory by law in India.
• Financial Protection: It covers expenses like repairs, replacements, and medical bills in case your vehicle is damaged in an accident, stolen, or affected by natural disasters.
• Third-Party Liability Coverage: It protects you from the financial burden of compensating third parties for damages or injuries caused by your vehicle.
• Additional Benefits: With comprehensive and own damage car insurance coverages, you get the option to choose from various add-ons for enhanced protection.
• Peace of Mind: Having car insurance keeps you financially protected in case of unforeseen events, thus allowing you to drive with peace of mind.

1. Collision Coverage

This is a type of Own Damage plan, but it covers your vehicle only in case of an accident, which includes repair expenses to your vehicle. Unlike a comprehensive cover, this only covers the vehicle in case of a collision and not in any other circumstance.

2. Personal Injury Coverage

This cover protects the owner-driver and the passengers in case of an accident. The medical bills and hospitalization charges are all covered by the insurance, not considering whose fault it was. 

3. Uninsured Motorist Protection

This is a type of insurance that comes in handy if you are hit by another vehicle and the at-fault driver doesn’t have car insurance to cover your repair damages. Typically, any repair or medical bills should be covered by the at-fault driver’s auto insurance. 

However, if the at-fault driver doesn’t have it then you will have to pay for it out of your own pocket. An uninsured motorist protection policy covers you against such expenses. 

Case 1: If you bought a new luxury car

Buying a luxury car is a one-time deal for most owners, thus, you must protect it with comprehensive car insurance to cover both third-party liability and own damage. Appropriate add-ons for luxurious cars are necessary too. 

You can get a Zero Depreciation Cover to claim the full value of repairing/replacing its expensive parts. A Return to Invoice Cover will be useful for luxury cars as it ensures that you receive the original invoice value of your car in case of theft or total loss. 

An Engine Protection Cover is a must for luxury car since it is an expensive component of the car, and this cover will protect you against all engine and gearbox repairs. Also, it's better to get a consumables cover to cover the replacements cost of lubricants, oils, nuts, bolts, screws, washers, grease, etc.

Case 2: If you own a 7-year-old car that you drive daily

Most car owners tend to ignore the importance of car insurance if you have a 7-year-old car; however, having at least third-party insurance is mandatory from the legal perspective. Since your car is already 7 years old, it is advisable to have own-damage cover to get coverage for repairs or replacement of your car in case of accidents, theft, fire, natural calamities, etc.

Also, getting a comprehensive cover with add-ons like a Roadside Assistance add-on will safeguard you on long road trips if your car breaks down, has a flat tyre or requires towing.

Case 3: If you’ve preserved your grandfather’s car that rarely hit the roads

People keep some things solely for the emotional value attached to them like that car in your family for generations, which is rarely driven but still requires to be insured via at least a third-party coverage policy as per legal requirements. Since you do not drive that car around, you can skip purchasing other add-ons.