Everything that you need to know about car insurance in India

For many of us, owning a car is a dream that has been nurtured for long. While buying a car does help you fulfill that dream, it is protecting the vehicle that becomes your priority afterward. Car insurance, which is mandatory under the Motor Vehicles Act, 1988, is the best way to protect your car from losses incurred as a result of an accident, and against liability that could incur during such instances.

Types of Car Insurance

There are two types of motor insurance available in the market i.e. Comprehensive and Third Party. Let us take a look at both of them.

1. Third-Party Insurance

Third-Party insurance will only provide cover for the damage done by your vehicle to third party’s property or/and vehicle. The insurance will not cover accidents, theft or damage to the vehicle. The insurance will provide you cover against any legal liability arising due to accidental damages, like:-

1. Permanent injury

2. Death of a person

3. Any damage to the property

2. Comprehensive Insurance

As the name implies, comprehensive insurance plans will help ensure your car against any risk arising out of theft or damage to the vehicle, etc. The car insurance will also provide cover for any accident or damage caused to a third party. Usually, comprehensive car insurance will also provide cover against:-

1. Natural Calamities like earthquakes, floods, typhoons, etc.

2. Man-made calamities like theft, riots, etc.

In addition, a comprehensive car insurance policy may also provide personal accident cover for the owner-driver and the passengers traveling in the insured vehicle.

In most cases, both types of car insurance covers are valid only for a year and will need to be renewed every year. The premium for car insurance will depend on various factors like the age of the vehicle, type of policy, and geographical zone, among others. 

Car Insurance Exclusions

Car insurance has certain exclusions that you need to be aware of. In case of damages, you won’t be able to claim damages if the reasons fall within the exclusions. The usual exclusions are:

1. General wear and tear

2. Depreciation and any consequential losses

3. Mechanical/electrical breakdown

4. Consumables like tires and tubes

5. If the insured vehicles are used for purposes other than those mentioned in limitations of usage in the insurance terms and conditions

6. Vehicle is driven by a person with invalid/no driver’s license

7. The vehicle being driven under the influence of drugs and liquor

8. Any loss/damage due to war, mutiny, etc.

Cashless Claims

A cashless claim allows you to get your vehicle repaired without paying cash at a network garage. This is possible owing to the tie-ups between the garages and the insurance providers. Any claim made due through an insurance provider’s network garage will allow you get your claim processed in a smooth and simple manner, as the insurance company will directly deal with the garage and pay for the repairs minus any items not covered under the policy.

The convenience to avail cashless claim facility provides peace of mind in terms of claim reimbursement. Moreover, the network garages are comparatively more reliable and the service provided by them is much better than any other local garage.

Now that you are aware of all the necessary details about car insurance, you can make a checklist of all these aspects at the time of buying car insurance so as to make the right choice.

**To understand exactly about the policy coverage, exclusions etc read the Policy Wordings carefully.**