Car Insurance

The basic purpose of Motor (Car) insurance is to provide financial protection against physical damage to the vehicle or bodily injury to third party as a result of accidents, collisions apart from liabilities arising from such incidents. Motor insurance gives protection to the vehicle owner against (i). damages to his/her vehicle and (ii). pays for any Third Party Liability determined as per law against the owner of the vehicle. Third Party Insurance is a statutory and legal requirement and hence every vehicle owner should mandatorily insured his/her vehicle atleast for Third Party cover. The owner of the vehicle is legally liable for any injury or damage to third party life or property caused by or arising out of the use of the vehicle in a public place.

Motor Insurance in India is of two types:

Third Party Liability Cover:
Third party liability insurance covers the damages caused by the insured, to an unrelated third party. In case of accidents, a third party liability insurance plan, covers all the damages that the insured driver has caused to the third party, their motor vehicle and its accessories. It also covers bodily injuries to the third party. The policy however does not cover bodily injury to the insured.
Comprehensive Motor Insurance Plan:
This motor insurance plan provides coverage for all the damages caused to the third party (bodily injury or property damage), as well as suffered by the insured to the vehicle. The damages caused may be due to human acts (while driving) or a natural calamity. It covers the damages to the insured’s motor vehicle, third-party legal liability, theft and personal accident coverage.

Benefits of Car Insurance

Covers Accidental Damage Repair Costs: Paying for the repair post an accident can be expensive for any individual, especially if it a high end car. This repair expenses incurred can burn a big hole in the insured’s pockets unexpectedly if they do not have their vehicle insured?

Add on to take care of additional Risks : There are many relevant add on Motor Insurance like Zero Depreciation, Return to Invoice, Tyre and Engine Secure, Key Replacement etc which can ensure better coverage for your vehicle in case of accidental damage.

Legal Liability : If there is an unfortunate accident and injury to a third party, the insurance policy can take care of the possible financial liability that arises. Sometimes, if the injured person is a successfully person, the legal liability can run into lacs of rupees.

Covers Accident related Hospitalization Expenses: If due to an accident, the insured is required to be hospitalised, then the motor insurance policy safeguards you from spending the hospital expenses from the insured’s own pocket.

Accidental Death Cover: If the insured unfortunately dies post an accident and if he is the only earning member of the family, the family can be put into financial hardship. The insurance policy atleast provided an Accidental Death benefit to the immediate kin to tide over the initial financial burden.

Road Side Assistance : Currently most insurers offer Road Side Assistance to the insured for a small increase in premium. This comes in handy when the insured is stranded on a highway following an accident or breakdown

Inclusions and Exclusions under your Car Insurance Policy:

The damages to the vehicle due to the following perils are usually covered under OD section of the Motor Insurance policy. It provides a quick snapshot of what is covered and what is not…however please go through the terms and conditions of your policy for the entire set of coverages and exclusions:

Inclusions – what is covered	Exclusions – what’s not covered
Fire, Explosion, Self- Ignition, Lightning	Driving without a valid Driving License
Burglary/Housebreaking / Theft	Driving under Influence of intoxicating liquor/ drugs
Riot, Strike	Accident taking place beyond Geographical limits outside India
Earthquake	While Vehicle is used for unlawful purposes
Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost	Electrical/Mechanical Breakdowns of the vehicle due to regular wear and tear
Accidental external means
Malicious Act
Terrorism acts
While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air
Land slide / Rock slide