Car insurance coverage is an important concept to understand when you buy a new car. Despite your precautions, your car could meet with unexpected contingencies on the road, such as major or minor accidents, breakdowns, tyre bursts, natural/man-made disasters and so on.
A car insurance policy is one of the best ways to relieve you of financial worries in such cases. All types of car insurance offer protection against financial losses resulting from unfortunate events involving your car, based on the specific terms and conditions of your policy. In this article we will explain you different types of car insurance available in India.
Types of Car Insurance Coverage in India
Third-Party Liability Only Cover
A third-party liability insurance policy covers the insured against legal liability arising from loss/damage to the property or person of a third party caused by the insured. Under this type of car insurance coverage, you will get the following benefits:
Cost of repairs/replacement of the damaged vehicle of third parties, cost of hospitalisation and treatment of third parties, liabilities arising out of death of third parties.
It is mandatory to have third-party vehicle insurance in accordance with the Motor Vehicles Act. The sum assured on the insurance should be high enough to prevent you from having to pay out-of-pocket.
Collision Damage or Own Damage (OD) Cover
When you opt for collision damage car insurance coverage, the cost of repairs to your vehicle that has been damaged is reimbursed. To determine the cost of collision coverage, its age and Insured Declared Value are taken into account to arrive at the premium. The IDV is based on the market value of the vehicle.
The maximum amount payable under a collision coverage policy is the IDV less accumulated depreciation. You should have collision coverage if you bought your vehicle on a loan.
Personal Accident Cover
A personal accident car insurance policy protects the owner-driver of the vehicle by covering medical expenses after an accident. For people who travel frequently for work, a personal accident insurance policy is a must-have.
Zero Depreciation Insurance
Generally, this coverage is available as an add-on to car insurance policies in India. Suppose your vehicle is damaged and you need to replace the parts. Depreciated values of parts will be considered for claim settlement by the insurer. With a Zero Depreciation Cover, you will receive the full claim amount without accounting for depreciation.
A zero depreciation add-on covers all parts of your car at 100% except tyres, tubes and batteries which are covered at 50%. Generally, insurers allow 2 zero depreciation claims during the policy tenure, however, there are some insurers like IFFCO Tokio who allow you to make an unlimited number of zero depreciation claims during the tenure of your car insurance policy.
Comprehensive Car Insurance
Comprehensive car insurance provides the insured highest level of protection as it includes liability for third parties, damage to own vehicle, personal accident cover, and all non-collision damage such as storms, floods, fire and theft. You can further enhance a comprehensive car insurance policy with a choice of add-ons.