Car insurance is a contract which is between you and a general insurance company wherein you pay a premium and in exchange, the premium company provides financial protection to your four-wheeler against damage resulting from accidents, thefts, fire, natural calamities, etc. Also, it covers any damages caused to third-party and their property.
Types of Car Insurance
There are majorly three types of car insurance which are listed below:
- Comprehensive Car Insurance
A comprehensive car insurance policy covers both third-party and own damages and losses which means it covers damages due to accidents, losses to third-party, damages due to natural disasters, personal injuries or death in an accident, damages caused in a fire, and losses due to fire.
Also, you can customize your comprehensive car insurance by subscribing to add-ons which comprise zero depreciation cover, breakdown assistance, type protection cover, engine, and gearbox protection, return to invoice cover, and consumable covers.
Comprehensive car insurance gives all-inclusive cover but it doesn’t cover damages caused due to drink and driving, driving without a license, add-ons not bought, consequential damages, and contributory negligence. - Third-Party Insurance
Third-Party car insurance covers you against any liabilities which occur due to any loss or damage caused to any third-party vehicle, person, or property but it doesn’t cover your vehicle damages.
Getting your car insured from third-party car insurance is compulsory for citizens who own a car in India as stated in Motor Vehicle Act without which you will be liable for a heavy fine. - Own Damage Car Insurance
Own damage car insurance was a part of comprehensive car insurance but since 2019 it is not a part of comprehensive car insurance but can be bought as a standalone policy. As understood by its name, own car damage covers your car damages and losses which are caused due to accidents, collisions, natural calamities, fires, and thefts.
Car Insurance Benefits
There are various benefits that you can derive from car insurance:
- If a vehicle is damaged due to fire, accident, or self-ignition it will be protected. Moreover, if the car suffers a loss due to strikes, riots, terrorism, or theft the repair cost will be covered under the policy. Also, it covers loss or damage while in transit by rail, air, road, inland waterways, or lift.
- Car insurance offers personal accident cover of a predefined amount which is stated in a policy bond. This cover protects against permanent total disability, and death due to an accident. Furthermore, this cover can be taken for other passengers on an unnamed basis for a predefined amount as stated in the policy bond.
- Car Insurance companies maintain a network of garages to ensure that you receive cashless services in all locations, in the hour of need.
- Car insurance covers third-party damage or loss i.e if your car is involved in an accident that has caused damage or loss to the property of any third parties or if a legal liability arises in case of any bodily injury or death of a third party, it protects you against that also.
- Car insurance provides you with no claim bonus (NCB), you are eligible for this benefit for every claim-free year.
Car Insurance Premium
A car insurance premium is an amount of money stated in the policy bond which you have to pay periodically to the insurance company against the contract of the policy. A car insurance premium is based on the types of cover the insured chooses which depends on its damage premium, riders, compulsory personal accident, third-party damage, and others. Also, various factors affect the premium amount associated with a policy, a few of such factors are the location of the owner, age of the vehicle, fuel type, driving efficiency of the owner, Insured’s Declared Value, coverage types, owners age, deductibles, etc.
Documents to Buy a Car Insurance Plan
Documents that are required to buy a car insurance plan are:
- Proof of identity – passport, driving license, Aadhaar Card, PAN card, or any other photo identity proof.
- Proof of address – driving license, Aadhaar Card, PAN card, or any other address proof
- Passport size photo
- Contact details of the policyholder like mail Id, mobile number, and address details.
- Driving license information of the policyholder
- A copy of the vehicle RC
- Bank details for online deduction of payments