Different Types of Motor Insurance Policies in India

Nothing sounds better to the ear than the vroom of the engine when you start your new automobile or motorcycle. In a country where owning a car or a bike is more of a status symbol than a means of transportation, it is not surprising that these vehicles grow to hold enormous sentimental value in the eyes of their owners. The slightest pinstripe on a side panel or minor damage on a new motorcycle is enough to make owners anxious and irritated. Such is the power that a car has over its owner!

When this is the case, it only makes sense to protect one's prized vehicle against harm, both accidental and otherwise. Furthermore, the fees involved during the repair of a vehicle might bore a considerable hole in your wallet because spare components are difficult to come by and thus pricey. This is why motor insurance is essential - motor insurance protects you against any financial loss associated with your vehicle in the event of a collision.

What is Motor Insurance?

Motor insurance is similar to other types of insurance, but unlike other types of insurance, it is 'priority!' And, as the name implies, it is insurance for all types of motor vehicles—motorcycles, cars, jeeps, commercial vehicles, and so on.

The government has made motor insurance a priority for your safety and the safety of others. And the yearly premium you pay is a pittance in comparison to the benefits it provides in the event of, God forbid, a mishap.

So, first and foremost, let's look at the various types of Motor Insurance policies and, in general, what they cover! There are two types of car insurance.

• The kind of vehicle for which you have insurance
• The amount of coverage you want to provide for your vehicle.

So, based on the type of vehicle owned, what are the various types of vehicle insurances in India?

Types of Motor Insurance in India

1. Private Car Insurance Policy

This is motor insurance that is required by the Government of India for any private car owned by an individual. Private car insurance protects the vehicle against damage caused by accidents, fire, natural disasters, and theft, among other things, and it also protects the owner against personal injury. It also protects the third party from any damages or injuries.

2. Two-Wheeler Insurance Policy

A two-wheeler insurance policy, mandated by the Government of India, covers two-wheelers such as scooters and bikes. The two-wheeler is insured against damage caused by accidents, disasters, fire, theft, and so on, as well as third-party damages and injuries. It also includes mandatory personal accident insurance for the owner rider and can be added for passengers.

3. Commercial Vehicle Insurance

Commercial vehicle insurance policy insures all vehicles that are not used for personal reasons. This type of insurance protects all vehicles that are used for commercial purposes. Vehicles covered by this insurance include trucks, buses, heavy commercial vehicles, light commercial vehicles, multi-utility vehicles, agricultural vehicles, taxis/cabs, ambulances, auto-rickshaws, and so on.

Types of Motor Insurance Policies in India

1. Comprehensive insurance

Motor vehicle owners in India can choose from a variety of motor vehicle insurance options. The primary goal is to protect car owners from damage and accidents.

Motor insurance policies are based on coverage, which refers to the type of insurance plan chosen, which can be classified as follows:

• Comprehensive Insurance
• Third-party Liability Insurance

Coverage under Comprehensive Motor Insurance

A comprehensive motor insurance plan, as the name implies, covers every conceivable aspect of the vehicle insured and the policyholder's interests. However, it is preferable to be aware of the various aspects that are covered by these insurance plans. Comprehensive insurance covers a variety of different aspects, including Fire, severe weather, and natural disasters all cause damage, third-party or animal-caused damage, damage to the vehicle caused by civil disturbances such as riots or theft and vandalism.

Add-ons with Comprehensive Motor Insurance Policy

The following are some of the add-ons of choosing comprehensive motor insurance in India:

Zero Depreciation

This is a common add-on cover that is also referred to as bumper-to-bumper insurance. This add-on cover is available for all vehicle segments. A zero depreciation cover is extremely important in claim settlement calculations or reimbursements. When car insurers pay the claim settlement amount or reimburse your bill payments, they usually deduct the car's depreciation value as of that day. As a result, no insurer will offer to pay the full claim amount. However, if you have this coverage, the Depreciation factor will not be considered when calculating claim settlement. This optional cover is ideal for vehicles that are under 5 years old.

Engine Protection Cover

The fitness of an engine is critical because it is an essential component of the vehicle. Unfortunately, comprehensive auto insurance does not cover non-accidental engine damage. This is where the engine protection add-on comes in, providing financial protection for the engine against all damages. This add-on relieves the insured of all engine-related expenses, such as an oil spill, water ingression, electrical or mechanical breakdown, and complete replacement of car engine parts, among other things.

Roadside Assistance

If your car breaks down while you're driving, whether on city streets or highways, you'll need immediate assistance. If you live in a remote area where finding a mechanic is difficult, roadside assistance add-on cover can be extremely useful. You simply need to contact the insurer and inform them of the situation. If the engine fails, the insurer will either arrange for towing or garage service through its network of garages. Few insurers include this as part of the basic policy; otherwise, you can purchase it as an add-on.

Consumable Cover

This consumable add-on covers consumable elements such as grease, air conditioner gas, lubricants clip, bearings, fuel filter, engine oil, oil filter, brake oil, nut and bolt, screw, washers, and so on that are not covered by the standard policy.

Return to Invoice Cover

You can purchase return to invoice coverage after the first policy year has ended. If the car is completely damaged in an accident or is irreparable as a result of a mishap, the insurer will pay the full value of the vehicle without taking into account the declining balance percentage.

Tyre Protect Cover

Tyre Protect add-on covers damages such as in-tyre bulges, punctures or bursting of tyres, cuts on a tyre caused by an accident, and so on.

Third-Party insurance

Third-party car insurance is required by law for all vehicle owners in India. Essentially, these insurance policies protect the policyholder's interests from damages caused by the policyholder to a property or an individual.

In a variety of situations, third-party coverage can be said to help reduce the policyholder's risk and liability. This coverage is also recommended for low-cost and old vehicles that are less expensive to repair.

Coverage under Third-Party Motor Insurance

Financial and legal assistance:

If you have third-party insurance on your car, you will not have to worry about any legal issues that may arise as a result of an accident. Remember that a third-party insurance policy protects you in the event of an accident. If you have a valid third-party car insurance policy, you will not be subjected to any of these court tribunals. Aside from that, this policy covers you for expenses related to the recovery of a third party's loss.

Affordability:

If you believe that third-party insurance policies are expensive, you are mistaken. Look, the insurance premiums are specifically designed to meet the needs of all vehicle owners. The premium you must pay is determined by the model and engine capacity of your vehicle. A third-party insurance policy has lower premiums than a comprehensive car insurance policy.

Online Procurement Procedures:

You do not need to visit the official premises of any insurer to purchase a third-party insurance plan for your car, as insurance plans can be obtained online. Insurance companies have dedicated web-based insurance portals to ensure that vehicle owners have appropriate plans. You can simply log in, browse insurance plans, and select the best one for your needs.

How Third-Party Insurance Cover Works

The first step in understanding how third-party insurance works is to make a list of the terms that are used. Some of the terms commonly associated with third-party coverage are:

First-party:

The policyholder or the person who purchased the insurance policy.

Second-party:

Insurer or insurance company

Third-party:

The person or entity who files a claim for damages caused by the first party.

If the policyholder is involved in an accident with a third party, the policyholder is responsible for any damages or injuries sustained. When an accident occurs, the policyholder must notify the insurance company as soon as possible and explain the situation. According to the preceding article, you have a variety of options when it comes to motor insurance, so register for insurance with the car insurance company as early as possible.

Also Read: Is Vandalism Covered Under Your Car Insurance Policy?

Frequently Asked Questions

What is motor insurance?

Motor insurance is a mandatory insurance policy for all types of vehicles - car, bike, commercial vehicles, jeeps etc.

What are the types of vehicle insurance available in India?

There are 3 types of motor insurance policies available in India: Car insurance, bike or two wheeler insurance and commercial vehicle insurance.