In India, road accidents have become very common. There are many reasons for this rising number of road accidents, which include lousy road infrastructure, reckless driving, not abiding by the traffic rules, and more. No matter what the reason behind these accidents is, one thing is sure: you will have to suffer huge financial losses to compensate for these losses. So, to ensure protection against these unpredictable events, buying a car insurance policy becomes essential. Want to know more about it and its types? Continue reading to learn about the types of car insurance policies in India.
Defining Car Insurance
A car insurance policy is a contract between the policyholder and the insurance company that states to provide financial assistance to the former in case the insured car is lost, stolen, or meets any kind of damage. The importance of a car insurance policy is such that a number of insurance companies in India now offer a variety of such plans to cater to the needs of the policyholder.
Types of Car Insurance Policy
To buy the best car insurance in India, you must know the different types of insurance available. In the section below, let’s take you through the types of car insurance policy:
- Third-party Car Insurance: As the name suggests, third-party car insurance provides coverage if a third-party is injured or damaged due to the insured car. This car insurance policy is mandatory per the Motor Vehicles Act of 1988.
- Standalone Own-damage Car Insurance: This policy offers financial coverage if there is any damage to the insured car. It does not provide coverage if a third party is injured or damaged.
- Comprehensive Car Insurance: A Comprehensive Car Insurance policy provides all-round financial protection to this policyholder. It is one of the most recommended types of plan because it covers both third-party liability and damages to the insured car. The premium of this plan is, however, more than the others due to its coverage.
Types of Car Insurance Add-ons
The add-ons in car insurance refer to additional coverage that a policyholder can avail at additional premiums. Some of these add-ons include:
- Zero Depreciation Cover: Zero Depreciation Cover in car insurance refers to an add-on that compensates for the depreciation costs. With this cover, the depreciation costs won’t be calculated and you will be able to get a higher claim amount.
- No Claim Bonus Protector: This add-on protects the No Claim Bonus (NCB) even after you have raised a claim in a given year. This means that you can get discounts on premium through the accumulated NCB even after raising a claim.
- Consumable Cover: Typically, car insurance policies do not cover for the consumables like nuts, bolts, etc. However, when you have this add-on, the insurer will even compensate for the consumables.
- Return to Invoice Cover: With this add-on, the policyholder can claim the exact amount as that in the invoice, irrespective of the depreciation.
- Key Replacement Cover: In case of loss or theft of the car’s key, the insurance company typically does not provide compensation. The Key Replacement Cover, however, provides financial protection if your car key is lost, damaged or stolen.
Summing Up
So, now that you know about the different types of car insurance policies, be careful in choosing the right one for your car. You should also compare the different plans available before making a final decision.