After opting for an insurance policy, a policyholder or insured gets an extensive cover and protection against third-party liability in case of an accident, mishappening and any damage to the vehicle.
Simply put, car insurance is a contract between a policy and a policyholder. The insurance providing company pays the customer for all the losses that are mentioned in the policy in an unfortunate incident. In exchange of this, the policyholder pays a premium to the company.
- An insurance policy covers an insured person against liabilities of third party life as well as property. Which means that if a third party suffers damage which was caused by the insured vehicle, the expenses due to these losses will be borne by the insurance company and not by the owner of the car.
- In some of the policies, medical cover is also offered. This medical cover includes expenses for the treatment of any injury, compensates for the loss of wages, covers expenses due to rehabilitation and funeral costs.
- The car insurance policy also includes any damage to vehicle or theft of vehicle’s belongings.
TYPES OF CAR POLICIES IN INDIA
The car insurance policies in India are generally valid for 1 year, after which they have to be renewed.
The classification of policies can be broadly done into two types – comprehensive insurance as well as third party insurance. The primary difference between these two covers is on the extent of coverage they offer.
THIRD PARTY INSURANCE
The coverage under the third party plan is limited to protection against injury to third-party and damage to third party property. In this policy, coverage is not offered for any losses to the insured vehicle and its owner. As per the Indian Legal System, third party car insurance is compulsory.
The basic inclusions are:
o Any damage to the vehicle of the third party.
o Any injuries caused to the third-party personnel.
The basic exclusions are:
o Any damage to the owner’s vehicle
o Any injuries to the insured person
COMPREHENSIVE CAR INSURANCE
In comprehensive car insurance plans, complete coverage is offered to the insured person. The extent of coverage includes coverage against third party liability and own damage. In own damage, the cover is offered against damages to vehicle and any injury to the owner or driver if the car is involved in the accident.
Since extensive coverage is offered by companies, these policies are popular irrespective of their high premiums. Every car owner is advised to be protected under the comprehensive car insurance cover.
The basic inclusions of comprehensive coverage:
- Any damage to the vehicle of the third-party
- Any injuries to the third-party personnel
- Any damage to the owner’s vehicle
- Any damage due to natural calamities, man-made activities
- Vehicle theft
The basic exclusions of comprehensive coverage:
- Any damage to the vehicle due to the wear and tear
- Any damage to the vehicle’s engine, unless has an add on cover
DOCUMENTS FOR CAR INSURANCE
Whenever a car insurance policy is bought online, the policyholder needs to furnish the below-mentioned documents to the policy providing company.
The driving license document is an indicator of the fact that the policyholder can drive legally and therefore holds the eligibility to buy car insurance. Through this document, an insurance company is also enabled to assess the insured person’s driving record before the insurance is allotted. People with good driving records and have to pay relatively low premiums.
The policy premium is decided based on the vehicle’s make, model, and variant. Hence, the details of the car must be known to your company. Latest models which are lower in engine cc are cheaper to insure compared to higher engine cc.
You will also be required to provide general info such as name, date of birth, address, RTO, etc.
Buying car insurance online is affordable as there are many web portals that offer comparison features. Plus, insurance companiessave a lot of money on administration costs that is then passed on to the customers.