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Types of Motor Insurance
Motor insurance provides coverage against damage or theft of a vehicle. In India, all vehicles must have at least third-party insurance that covers third-party liabilities.
If you are planning to purchase a new vehicle or have recently purchased one, it is a good idea to understand the various types of motor insurance policies available.
When choosing insurance coverage for your vehicle you will come across these kinds of policies:
Third-party insurance is mandatory for vehicles in India under the Motor Vehicles Act, 1988. It only provides coverage against third-party liability including property damage and bodily injury.
What this means is if you accidentally damage another vehicle or cause injury to someone, the insurance policy will pay for the repairs or medical expenses.
Third-party insurance will not cover the damage caused to your vehicle.
Own damage insurance covers the damages caused to the insured vehicle. This means in case your vehicle is damaged in an accident or a natural disaster, you will be able to make a claim to cover the cost of repairs.
Comprehensive insurance covers the damages caused to your vehicle as well as third-party liabilities. Additionally, it covers the injury caused to the owner of the vehicle and the passengers.
Add-on covers are additional covers that you can purchase to enhance your insurance policy. There are several add-on covers provided by insurance companies. Here is a list of common add-on covers:
The zero-depriciation add-on covers the cost of repairs or replacements without deducting depreciation. It is also known as bumper-to-bumper or nil depreciation cover.
This add-on cover will provide you with 24x7 roadside assistance in case of a breakdown, flat tire, or empty fuel tank.
It covers the cost of engine repair or replacement in case of damage due to water in the engine or oil leakage.
Generally, insurance companies provide three types of insurance policies customized for different vehicle types:
Two-wheeler insurance policies are for motorcycles, scooters, mopeds, etc. These insurance policies cover third-party liabilities. Vehicle owners have the option to choose additional coverage.
Car insurance policies are made specifically for private cars (SUVs, sedans, hatchbacks, etc.). They cover damages due to accidents, natural disasters, or theft of the car. Car insurance also covers third-party liabilities.
Commercial vehicle insurance policies are specifically designed to cover vehicles used for business purposes such as trucks, vans, and buses. This type of insurance provides coverage against damages to the vehicle and third-party liabilities.
Motor insurance is essential for vehicle owners in India. It provides various types of coverage to protect against damages, theft, and liabilities. Not only does motor insurance give you the peace of mind of knowing you are financially protected, but it also makes sure you are complying with the law.
You can use the Moneyview website or app to compare and choose the best insurance for your vehicle.
What is first-party and third-party insurance?
What is IDV?
IDV stands for Insured Declared Value. It is the maximum amount that an insurance company will pay if a vehicle is stolen or totaled.
Which type of car insurance is best?
What is NCB in car insurance?
NCB (No Claim Bonus) is a discount given by the insurance company for not making a claim during the policy term.
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