Road accidents are frequent occurrences that can also result from other people’s recklessness in addition to your irresponsibility. Regardless of the accident’s origin, property is always destroyed, and in some terrible instances, injuries received during the incident result in the death of the victim or irreversibly change their life.
The greatest defense against the ensuing financial and legal ramifications for drivers, car owners, passengers, and pedestrians is auto insurance. Various automobile insurance options are available based on the level of protection you want. Let’s discuss the top five categories of auto insurance coverage in the nation.
Here are the 5 types of Car Insurance in 2024
1. Third-Party Liability Only Cover
Every motor vehicle on Indian highways is required by law to carry third-party liability-only insurance, according to the Motor Vehicle Act of 1988. When it comes to third-party auto insurance, “third-party” refers to any person, property, or vehicle that is harmed as a result of the insured’s driving activities. Due to the narrow scope of coverage, this is one of the most reasonably priced auto insurance options available in the nation.
The following occurrences are the only ones that will be covered by third-party liability insurance:
- The third-party vehicle’s damages
- Property damage to third parties
- Expense of third-party treatment and hospitalization
- Obligations resulting from the passing of third parties
Damages or losses to the insured vehicle resulting from an accident, natural disaster damages or losses to the insured vehicle, or theft of the insured vehicle are not covered by third-party auto insurance.
2. Own Damage (OD) Cover
The insured will get payment for the cost of repairing their damaged car under the terms of the collision damage cover insurance policy. The age of the vehicle and its insured declared value (IDV) will be taken into account when calculating the price for various kinds of auto insurance in India. The car’s market value is its only disclosed insured value.
Should the expenses incurred due to damage to your car surpass its present worth, the insurance provider will reimburse the current market value of the vehicle. The crash cover can be as low as feasible for older cars. If your car has a lien on it, you have to purchase coalition coverage.
When choosing one of these forms of auto insurance coverage, the most crucial thing to remember is that the insured will only get payment from the insurance provider in the event of an accident. Therefore, those who reside in areas of the nation that are prone to accidents or in cities with heavy traffic are ideal candidates for collision damage coverage.
3. Personal Accident Cover
By paying for post-accident medical costs, a personal accident insurance policy can shield the car’s owner in the event of an accident. In the event of an accident, these kinds of automobile insurance can also shield drivers and passengers from medical expenses. Whether the driver of the covered vehicle or another party caused the collision, the insurance company will pay for the medical bills. The insurance provider will give the bereaved family a lump sum payment if the accident results in death.
4. Uninsured Motorist Protection
The cost of repairs for any damage your car sustains in an accident should be covered by the insurance of the driver who caused it. However, what occurs if the owner of the other car is uninsured? I take it you would have to pay for the damages? Uninsured motorist protection enters the picture here. These kinds of auto insurance
can defend the insured if the accident’s cause is uninsured. It can also save your bacon in situations when the damages to your car are more than the amount covered by third-party insurance. Accident-related medical expenses as well as vehicle repairs will be covered by uninsured motorist protection.
5. Comprehensive Car Insurance
This is the most comprehensive kind of auto insurance you can get for your vehicle, as the name implies. Both damage to your car and damage from other parties are covered under comprehensive insurance coverage. It essentially offers a 100% protection guarantee. These kinds of auto insurance in India give the widest range of protection against all the risk elements that you may encounter when driving your car, even if their costs may be more than those of a third-party liability-only policy.
One such unrivaled coverage offered by the comprehensive insurance plan is theft protection, a characteristic absent from other insurance types. Additionally, this insurance coverage can shield your car from:
- Natural disasters
- Man-made calamities
- Fire
- Terrorist activities
Here are some of the scenarios a comprehensive car insurance policy will not cover:
- Damages to the vehicle brought on by driving while intoxicated or under the influence of drugs
- Automobile damage sustained when operating a vehicle without a valid driver’s license
- Mechanical and electrical failure
- Usage-related deterioration
- Damages to the vehicle brought on by speeding or unlawful racing
- Automobile damage brought on by irresponsible driving
- Harm sustained when in a foreign territory
Add-on Coverages
When compared to third-party auto insurance, basic comprehensive coverage provides greater protection on its own. However, there is yet another fantastic benefit to choosing a comprehensive auto insurance plan. You may select accessories to better safeguard your car. Although the base form of the comprehensive auto insurance policy might not cover it, you can tailor this kind of vehicle insurance in India with add-ons to meet your unique requirements.
When it comes to comprehensive auto insurance coverage, the following are some of the most sought-after extras:
a. Roadside assistance cover
Unexpected problems, such as flat tires, low batteries, or even a mechanical malfunction, can bring a fantastic road trip to a complete stop. This is the time when a roadside assistance cover or other add-on might be quite helpful. This add-on will allow you to receive help around the clock, even if your car decides to act strangely in a distant area.
b. Zero depreciation cover
This kind of add-on, sometimes referred to as a “nil depreciation cover,” is useful if your vehicle sustains damage. Insurance companies will not cover the whole cost of the repairs when your automobile has to have specific parts replaced. They will pay you the appropriate amount after considering the parts’ depreciation. However, you will receive full reimbursement for the repairs if you choose for the zero depreciation cover add-on. To be eligible for 0% depreciation coverage, your automobile must be less than three years old.
c. Key replacement cover
For people who are prone to forgetting things, this is a handy extra. Replacing an automobile key that you’ve misplaced, stolen, or sustained damage can be quite costly. However, the insurance provider will pay the whole cost of replacing a key or even repairing the key and lock set if you have key replacement coverage.
d. No claim bonus protection
When it comes time to renew the policy and there hasn’t been a claim against it for that year, the majority of insurance firms provide the insured with a no-claim bonus reduction on the insurance rate. Given how erratic traffic accidents may be, you might not be eligible for a no-claim benefit. Even after you file a claim, if you have no-claim bonus protection, you are still eligible for the no-claim bonus discount.