Types of Motor Insurance
Motor insurance provides you adequate financial security in case of emergencies or unforeseen events involving your vehicle. After all, any loss or damage to your vehicle due to a natural calamity or an accident can be heavy on your pocket.
Given the various types of motor insurance policies available today, you may find it challenging to select the right one for your vehicle. Here’s a primer on the types of motor insurance policy that you can choose from.
Different Types of Motor Insurance Policy
Based on the type of coverage provided, motor insurance policies are divided into the following categories:
Third-party liability cover: Third-party insurance policy is mandatory under Indian laws, and it minimises the liability of the policyholder. In the event of the policyholder’s vehicle meeting with an accident and causes damage to the life or property of a third party, the policyholder’s liability will be taken care of by the insurer.
Comprehensive insurance policy: As the name suggests, the role of such an insurance policy is to provide coverage for a wide range of events. Be it damaged due to natural disasters or man-made disasters, you can raise a claim. In case of bike theft also, you can raise a claim. Additionally, it includes third-party liability insurance. As a result, a third party can also raise a claim under your comprehensive insurance policy. You can do away with the need to apply for multiple policies and use a single policy for all your vehicle-related issues. You also have the option of taking add-on covers to make the policy even more comprehensive and secure yourself against any kind of situation that you may find your vehicle in.
Own-damage insurance policy: In case of any damage to your vehicle due to fire or rain, or theft, you can raise a claim under this policy to compensate you for the expenses incurred for repairing your vehicle. Bear in mind that a basic car insurance policy won’t cover damage to your vehicle. Therefore, it’s advisable to get a separate own-damage policy even though it is not legally mandatory.
Based on the use of the vehicle, motor insurance policies are divided into the following categories:
Private car insurance policy: As the name suggests, such an insurance policy is obtained for your personal vehicle. In the event, your car meets with an accident or suffers any damages due to natural or man-made disasters, you can raise a claim under this insurance policy. It will also extend monetary assistance in case of third-party damage or car theft. Most private car insurance policies also include a third-party liability cover.
A private car insurance policy can be made more comprehensive by purchasing add-on plans such as zero depreciation, emergency assistance, engine, gearbox protection, etc.
Two-wheeler insurance policy: If you purchase a two-wheeler, the law mandates you to obtain a two-wheeler insurance policy. You can raise a claim if your two-wheeler gets damaged due to any man-made or natural disaster. It also covers bike theft. If a third party gets injured or dies due to an accident caused by your two-wheeler, the insurer will take care of your liability.
Commercial vehicle insurance policy: This type of motor insurance policy is meant for business owners who also own vehicles used for commercial purposes. For instance, ambulances, light commercial vehicles, agricultural vehicles, etc. need a commercial vehicle insurance policy. The coverage under the insurance policy provides protection against financial losses that a business owner may incur on account of loss or damage of a commercial vehicle. It also provides coverage for any legal liability towards third parties in the case of death or injury of such third party or any damage to the property of third parties.
Choosing an appropriate motor insurance policy for your vehicle is necessary for ensuring the optimum safety of the vehicle and protecting your finances. Now that you have learned about the various types of motor insurance that the insurers can provide you, it is time to choose one that suits your needs.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.