As we are heading towards a modern lifestyle, having a four-wheeler has become a status symbol in the society. Gone are the days when buying a car was something luxurious. Today, every second household had a car parked in their garage. And all thanks to the finance market that has given immense loan offers to take home their favourite vehicle.
Conversely, the other side of the coin is that buying a vehicle is easy, but its maintenance comes at higher costs. However, car insurance has made it easy as well.
Basically, car insurance is a vehicle policy or an agreement, which ensures financial assistance to cover any losses or damage occurred to the vehicle due to unforeseen risks or accidents. According to Motor Vehicle Act, 1988, it is mandatory to have at least third party insurance cover. The policy allows the vehicle owner to mitigate costs associated with expenses occurred by an accident or damage. Instead, of paying for the expenses out of pocket, the insurance commits to pay all or partial of the most costs associated with the loss or damage to the vehicle.
In order to avail the insurance benefits, a vehicle owner has to select the plan and insurance company and pay annual premium against the selected plan. But, before getting insurance, it is important to understand the type of car policies available in the market.
Third-party insurance – This is mandated under the Motor Vehicle Act for the entire vehicles plying on the road. Third party insurance provides protection to the vehicle owner from the legal liabilities caused to a third party. The policy is specifically designed to provide protection against the third party liabilities or damages caused by the insured vehicle.
Comprehensive insurance – This insurance plan provides full protection coverage to the insured vehicle and its owner along with third party coverage benefits. The plan comes with higher level of security and protection as it provides coverage against the liabilities caused to the insured vehicle or third party from various loss or damages due to natural or man-made calamities.
Protection from financial liability – Car is definitely a great conveyance medium, but it comes with some great responsibilities as well. Especially, if some damage or loss occurs to the car. However, car insurance assures financial coverage against any liability caused to the insured vehicle, car owner, or to any third party.
Medical cost coverage – Mishap can happen any time, no matter how carefully you’re driving. Being in a car accident is something no one wishes to experience, but it’s hard to take control of the life events. Being an accident victim can quickly rack up the financial strain, but having an insurance policy saves the insured owner from paying for the medical expenses out of the pocket. However, the benefit is available only with the comprehensive policy type.
Covers repair or replacement cost – Depending on the severity of the mishap, repair or replacement costs of the vehicle’s part can rack up financial strain. However, being under coverage protection of a car insurance, one doesn’t have to worry about the repair or replacement costs as the insurance company provides compensation for the same.
Peace of mind – Earlier, driving to long distance destinations was something stressful. But, today it is more fun and stress-booster as an insurance policy gives you a peace of mind while driving. Most insurance companies have a huge garage network across the country, so if in case, any mishap happens, you don’t need to worry about the incurring cost due to the unforeseen event. Moreover, companies have a towing facility as well, so if the vehicle is not in driving condition, the company toes to the vehicle to the nearby service garage.
Personal accident cover – Personal accident feature of car insurance covers death or disability of vehicle owner caused due to a road mishap. The vehicle insurance plan essentially comes with a personal accident cover; though the compensation amount varies as per the selected tariff.
Authentic – All the insurance policies issued by the licensed company or web aggregator are 100% authentic both online and offline. Insurance Regulatory and Development Authority (IRDA) is a government body for regulating, governing, and controlling insurance business. So, if the insurance company or authority is registered with the IRDA license, you can give a rest to your doubts about authenticity, especially while purchasing car insurance online.
Do your homework – It is important to first do your homework in order to find the right insurance policy based on your several parameters.
Premium cost – While selecting the best four wheeler insurance, the most common mistake that people make is opting for a plan solely based on the premium cost. However, this should be done with accordance to coverage network, claim settlement ratio, process, cashless network, and additional benefits. It is a bad idea to go for higher premium plans to avail maximum coverage benefits, instead select plans that has lower premium along with maximum coverage benefits.
Understand your plan – An insurance policy is a legal agreement that may contain certain technical terms. Therefore, it is important to have a thorough understanding of the terms to avoid any confusion at time of claim settlement. Also, check for the inclusions and exclusions of the plan.
a. Contact insurance company informing the representatives about the loss or damage as it occurs.
b. In case of any severe injury or death due to the mishap, report to the Police and submit the copy of FIR to the insurance company.
c. In case of severe accident or damage, but no loss of life, call an insurance surveyor to inspect the loss or damage to claim compensation.
d. The network or non-network garage will present an estimated cost of repair or replacement and submit it to the company. The company will approve the compensation cost according to the degree of loss or damage occurred.
According to Motor Vehicle Act, it is mandatory to have at least third-party insurance cover to ply the vehicles on Indian roads. However, third-party insurance only provides liability coverage to third-party damages. On the other hand, comprehensive insurance covers the damages caused to the owner/driver, insured vehicle, and third-party damages. It also provides coverage to loss/damage caused due to events that are out of one’s control such as theft, riots, fire, accidents, acts of nature, etc.
Well, the only key difference between both the insurance policies is the kind of coverage it offers. While third-party insurance only provides liability cover against damages or losses caused to third-party, a comprehensive insurance covers damages/losses caused to the owner/driver as well as to the third-party.
Choosing the right insurance for your vehicle is crucial in India and not having one can make you land in legal troubles and can even lead to the cancellation of driving licence. Thus, to protect yourself from hefty traffic violation fines and damages or losses caused due to any mishaps, it is important to have a comprehensive car insurance that provides 360-degree coverage to your vehicle.
• Covers for your car’s damages
• Protects from third-party liabilities
• Higher insured declared value (IDV)
• Customize your car insurance policy with add-on options for better coverage
• Protects your car during natural disasters
• Avoid depreciation with zero dep cover