What are the types of car insurance

Posted by neha sharma on May 10th, 2019

Car insurance is one of the essential requirements for vehicle owners. This type of insurance covers a wide range of losses associated with driving the vehicle. Getting some form of car insurance is mandatory for car owners and in case a car is found without any insurance papers, it invites fines for the car owner.

But which car insurance should a car owner opt for? To make that decision, it is important to know the types of car insurance policies that insurance companies offer. Car insurance in India can be classified as:

1. Comprehensive motor insurance:

A comprehensive car insurance policy covers a wide range of risks associated with a vehicle. Some of the items covered are:

• Theft of car
• Damage to the car due to natural disasters such as floods, earthquakes, lightning, landslides, hurricanes
• Damage to the car due to accidents
• Damage to the car due to war, riots, civil war, acts of terrorism, vandalism
• Injury to the driver due to an accident
• Damage to the car while it is in transit
• Action or damages incurred by a third party because of the driver of the vehicle

Getting a comprehensive motor insurance completely takes care of most risks that can occur while driving. With this type of car insurance, any repairs that need to be done to the car because of any accidents or damages are reimbursed by the insurance company up to a particular limit. Most insurance companies have a network of garages with whom they do cashless repairs. Visiting a network garage can make the process of repairs for your vehicle easier.

The third party liability insurance covered in this part is the same as the separate third party insurance product offered by insurance companies. In this policy, it is clubbed together with other risks and damages.

The value of the policy will be the insured declared value of the car and the value of accessories in the car. This value is arrived at after deducting depreciation from the purchase price of the car. Each insurance company has a table showing the depreciation figures based on the age of the car. 

2. Third party liability insurance:

As per the Motor Vehicles Act, it is mandatory for a car owner to at least have a third party liability insurance. Under this type of car insurance, the owner is covered from the risk of damage to a third person’s vehicle or injury to a third person because of the owner of the vehicle. This covers any loss or damages that the car owner may have to pay on account of any damage to a third party while driving his vehicle.

However, one important point to remember is that the insurance company will not pay out any compensation or reimburse any costs if:

• The insured person was not driving his vehicle
• The vehicle was being driven outside the coverage area
• The driver was under the influence of drugs or alcohol

How to buy car insurance online?

It is possible to get car insurance offline as well, but with the advancement in digital technologies, it is convenient to buy car insurance online. This policy can be purchased from:

• Car insurance aggregators
• Insurance company’s website

Before getting car insurance online, it is important to check the list of inclusions, exclusions, depreciation table for calculating value of the policy and the list of network garages among others. It is also important to check the solvency ratio of the company and the claim settlement ratio. Once you pick the right company, you can invest in car insurance.