Of late, many individuals are preferring to have their own private mode of transportation. This has led to an increase in the number of vehicles on the road, which has consequently given rise to an increase in the number of accidents.
Considering the fact that the cost to repair a vehicle damaged due to an accident is almost always exorbitant, it is crucial to have a motor insurance policy in place. Even the Motor Vehicles Act of 1988, mandates that every vehicle has to have a valid and active motor insurance policy.
In India, there are different types of motor insurance that you can opt for. The kind of vehicle insurance that you would have to opt for is primarily dependent on the purpose for which you plan to use the vehicle for. And even then, there are two different types of vehicle insurance that you can choose from. Let’s take a look at what they are.
The kind of vehicle that you have and how you plan to use it dictate the type of insurance that you need to get. Here’s a quick overview of the different types of motor insurance that you can get in India.
If you have a car or are planning to get one for yourself in the near future, this is the type of motor insurance policy you would have to get. Such plans are designed to offer financial coverage to cars used for private purposes.
On the other hand, if a private car is used for any commercial purpose, the coverage might not be extended by the insurance company. Private car insurance policies can cover third party liabilities alone or can provide coverage for both third party liabilities and damages to your own car as well.
Two-wheelers, on the other hand, also require financial coverage against damages that might occur during the course of your ownership. And a two-wheeler insurance policy is designed to offer you just that. As with the previous type of motor vehicle insurance, you can choose to have coverage for just third party liabilities or both third party liabilities and own damages.
Vehicles that are used for commercial or business purposes such as for transporting passengers or goods are also required to have a valid motor insurance policy. Such vehicles tend to be used very often and spend a majority of their time on the road.
A commercial vehicle insurance policy is designed to offer coverage against any third party liabilities and own damages that might occur during the course of the policy tenure.
However, such types of motor vehicle insurance policies may not offer coverage if the vehicle is used for non-commercial purposes such as for personal use.
Irrespective of whether the motor insurance is for a private car, a two-wheeler, or a commercial vehicle, you have the option to choose either one of the two kinds of motor vehicle insurance policies. Let’s check them out one after the other.
If your vehicle gets into an accident and causes injury to another person or damages their property, the onus of compensating for the damage caused would fall on you. Here’s where a third-party motor insurance policy can help.
Such policies are designed to offer financial coverage for third-party liabilities that may arise due to an accident involving your motor vehicle. That’s not all. According to the Motor Vehicles Act of 1988, every vehicle is required to mandatorily possess at least a third-party motor insurance policy.
A third-party motor insurance only covers liabilities that arise due to an accident. It doesn’t provide any financial coverage for damages that your motor vehicle sustains during it. Here’s where a comprehensive motor insurance policy comes into the picture.
As the name itself suggests, a comprehensive motor insurance policy offers coverage that’s far more extensive than a typical third-party plan. Such plans are designed to offer coverage for both third-party liabilities as well as damages to your vehicle.
And in addition to covering accidental damages, a comprehensive motor insurance plan also covers damages arising from calamities, fire, explosions, theft, and more. You can even enhance the coverage offered by such insurance by opting for various add-on covers.
Insurance add-ons are optional covers that you can opt for over and above a comprehensive motor insurance policy. They help supplement and enhance the coverage offered by the policy. Some of the add-ons that you can opt for are listed below.
Depreciation refers to the loss of value in a vehicle over a period of time owing to regular wear and tear, and this value is deducted from the claims settled by an insurer.
However, with a zero depreciation cover, you can ensure that no amount is deducted by your insurer at the time of settling claims, owing to depreciation. Instead, you will receive the full value of the claim.
A comprehensive motor insurance policy doesn’t provide coverage for damages to the engine. However, with the engine protection cover add-on, you can extend your insurance plan’s coverage to include any damages to the engine as well.
A roadside assistance cover is designed to ensure that you receive timely help and assistance in the event of a vehicle breakdown. The add-on provides coverage for refuelling, lost keys, flat tyre repair, vehicle towing, and a lot of other scenarios.
Consumables are items that have a very specific usage and can usually be used only once. When your vehicle undergoes repairs, a wide range of consumables get used up. This includes engine oil, bearings, nuts, bolts, washers, brake oil, coolant, AC refrigerant, grease, and others.
A normal comprehensive motor insurance policy doesn’t cover any of the consumables that are used up during repairs. The expenses related to these parts will have to be borne by you out of your own pocket.
However, a consumable cover add-on ensures that expenses related to such parts are covered by the insurance plan.
In the event of theft or a total loss scenario, you’re only eligible to receive the Insured Declared Value (IDV) of the vehicle. This might cause significant losses if the IDV of the vehicle is lower than its original value.
However, with the return to invoice cover, you stand to receive a compensation that’s equal to the original value of the vehicle in the event of theft or a total loss.
A comprehensive motor insurance policy does not cover the cost of replacing tyres if they get damaged due to an accident or a calamity. A tyre protect cover is designed to cover the cost of repair and replacement of damaged tyres. It even provides coverage for the labour charges that you incur towards tyre repair or replacement.