Types of Car Insurance

What are the Different Types of Car Insurance?

When purchasing an auto or car insurance, it’s crucial to comprehend the concept of coverage. You travel by car to work, to complete duties and have fun with your family, or to spend time with friends. As a responsible automobile owner, you maintain the condition of your vehicle, drive safely, and follow all traffic laws. So, you want to be able to drive without worrying.

Despite your efforts, your car may encounter unforeseen roadside situations, such as big or minor collisions, mechanical failures, tyre blowouts, natural or man-made calamities, and so on. It is the finest option to relieve your financial concerns in such circumstances.

Protection is provided under all types of plans, subject to the precise terms and conditions of your policy, for monetary losses resulting from any unlucky incidents involving your vehicle. You should put all of your attention into getting well after a car accident and not worry about the financial fallout. You should always have enough coverage and keep it in force in order to handle any such occurrence with minimum anxiety.

Types of Car Insurance / Four Wheeler Insurance / Motor Insurance

Depending on the level of protection provided and the kind of vehicle for which insurance is required, numerous categories of such policies exist.

1. 1. Third-party liability insurance

      • Is the most fundamental type of auto insurance, making it also the most affordable.
      • Other names for this insurance plan include liability-only insurance and act-only plan.
      • All car owners are required to get this insurance policy in order to protect their vehicles by the Motor Vehicles Act of 1988.
      • If you operate a vehicle without at least third-party liability insurance, you could be fined.
      • This insurance policy’s protection for third parties in an accident involving the insured vehicle extends to situations like bodily harm or death and property damage.
      • It should be emphasised that own-damage coverage, or protection for the insured vehicle or owner-driver, is not included in third-party liability insurance.
      • Some insurance providers offer the owner-driver personal accident coverage in addition to the third-party liability insurance policy.
      • The greatest sum that can be awarded to a third party as compensation for death or disability has no upper limit, however the amount that can be awarded for third-party property damage has a cap of Rs. 7.5 lakh.
      • The court, however, makes the ultimate claim settlement decision.

   2. A comprehensive car vehicle policy

      1. This plan, which some insurers frequently refer to as a package policy, offers more comprehensive insurance coverage because it includes both own-damage and third-party liability coverage.
      2. Any unanticipated occurrence, with the exception of collision, is covered by a comprehensive auto insurance policy. It also provides coverage for losses sustained in an accident. Here are some of the many additional advantages of this “other than collision” cover:
         • It offers your car the finest level of protection possible.
         • With comprehensive auto insurance, you can make a claim for losses suffered in such circumstances even if you are found to be at fault in an accident.
         • It covers claims made against you in court, including legal costs, as a result of an accident.
         • Financial security and mental tranquilly
         • Cash assistance in the event that your car is written off
         • In contrast to third-party insurance, it protects against damage to your own vehicle during an accident

Car Insurance Add-on Plans

1. Most plans providers offer add-on covers in addition to the comprehensive and third-party liability insurance packages mentioned above, which can expand the coverage of the base policy. By paying an additional sum, these riders should be obtained from the same insurance company. Following is a description of a few of these add-on plans:

   1. Zero depreciation cover

      • Is a well-liked vehicle insurance add-on plan that provides substantial savings during a claim.
      • It is also known as a bumper-to-bumper policy or a nil depreciation cover.
      • Take into account the fact that your car is covered by a comprehensive automobile insurance policy.
      • You will still be responsible for paying the costs associated with excesses and depreciation of the car parts at the time of a claim.
      • The insurer would, however, be responsible for paying for the depreciation of your vehicle’s parts if your comprehensive plan was strengthened with a nil depreciation cover.

   2. Engine protection cover

      • A comprehensive automobile insurance policy does not shield the car from engine-related technical or electrical issues.
      • Especially if you live in a place that is prone to waterlogging, purchasing an engine protect cover will provide your engine with the much-needed protection.

   3. Return to Invoice (RTI) Coverage

      • This supplemental plan guards against the costs associated with totaling your car.
      • It gives you the vehicle’s true invoice value in the case of a total loss, such as a car theft, without taking into account the age-related depreciation of the vehicle.

   4. Loss of personal possessions coverage

      • This add-on insurance plan provides coverage for the loss of pricey electronic equipment, laptops, and other items kept in the insured car.

   5. No Claim Bonus (NCB) protect cover

      • No Claim Bonus is a sizeable bonus provided by insurers to motorists who do not file claims during the course of a policy year.
      • If your plan offers NCB protect coverage, you can keep this bonus even after filing a claim.

   6. Passenger personal accident coverage

      • By selecting this rider, the comprehensive auto insurance policy can be improved to provide protection for the passengers.

   7. Key replacement cover

      • In the event that the vehicle keys are lost or misplaced, the insurance provider will pay for their replacement.

   8. Roadside assistance insurance

      • This add-on cover protects the policyholder around-the-clock from occurrences like flat tyres, running out of gasoline, needing professional inspection, etc.
      • Consumables are a general term for parts that are utilised in vehicles, including nuts and bolts, screen washers, engine oil, and others. When a claim is made, the insurance company is not responsible for the cost of these parts. However, if this rider was included in your auto insurance policy, you would have coverage for consumables.

   9. Daily allowance cover

      • This add-on coverage pays for the costs of renting a replacement car while the covered car is getting repairs at the mechanic.

In addition to the aforementioned distinctions, auto insurance is divided according to the vehicle’s intended use. For your personal vehicle, you might choose to purchase a private policy. In a similar vein, a commercial plan will provide insurance protection for the car you’ll be using for professional use.

In conclusion, there are various sorts of plans available in India. You must be aware of your particular Insurance requirements and select the plan that best fits them. Additionally, because of the important nature of this insurance and the plethora of options available, it is advised that the same be bought with the help of an Insurance advisor.