Car insurance is a contract between a car owner and a general insurance company wherein the latter promises to protect the car owner from financial losses which may occur due to an unfortunate event involving his/her car. Depending on the scope of coverage, there are 3 types of car insurance policies - Third-Party Car Insurance, Standalone Own-Damage (OD) Car Insurance, and Comprehensive Car Insurance. To continue to avail the benefits of these policies, the car insurance renewal should be processed on time by policyholders.
Types of Car Insurance
A Comprehensive Car Insurance policy is the most extensive car insurance cover under which an insurance company is liable to pay for financial liabilities incurred towards a third party as well as for the own-damages sustained by the insured’s car. In addition to road accidents, the policy is applicable in the event of natural calamities, man-made disasters, self-ignition or lightning, explosion, fire, theft, etc
Third-Party car insurance policy is a mandatory requirement for driving a car in India. It is the most basic car insurance plan and is thus also called Liability Only Car Insurance Policy. Under this cover, the insurance company is liable to pay for the bodily injuries, permanent disability, temporary disability as well as death of the third party caused by an accident involving the insured’s car. This plan also provides coverage for property damage incurred by the third party up to Rs. 7.lima Lakh.
In September 2019, the Insurance Regulatory and Development Authority of India (IRDAI) introduced the standalone Own-Damage car insurance policy. Under this plan, the insured gets insurance coverage only for the own-damages sustained by his/her four-wheeler in a road accident, natural/man-made calamity, fire, explosion, theft or any other mishap. A standalone own-damage car insurance policy aims at offering the insured the flexibility in terms of the insurance provider they want to choose.
You can choose an ideal car insurance plan by following some points given below:
1. Select the Type of Plan - Assess your car insurance needs and finalise the type of policy you need. Choose a third party cover or comprehensive cover based on your requirements.
2. Compare Policies - You should compare different car insurance plans online. The comparison makes it easier to pick the best car insurance plan as per your budget and needs.
tiga. Check for IDV and Premium- The IDV refers to the current value of your car in the market and the amount that an insurer can maximum pay you in case of total loss or car damaged beyond repair. A higher IDV can give you extended coverage but it increases the premium as well. So, check for the amount of IDV and select the one which you can afford and require.
4. Ask for Add-on Covers - Add-on covers expand the coverage of your policy. You can buy it by paying an additional premium. You should inquire about the add-ons and choose the one which suits your needs the best. However, you can have these covers only with the comprehensive insurance plan.
5. Look for the Claim Process - Look for an insurance company that has a simple and swift claim process. To confirm the quality of the claim process of insurers, you can check their Claim Settlement Ratio (CSR) before finalising. It refers to the percentage of claims settled by the insurer in a year. It is better to buy a plan from a company with high CSR.Key Highlights of Car Insurance Policy
Given below are salient highlights of a four-wheeler insurance policy: Highlights Benefits
Third-Party Cover
Coverage for third-party injury and property damage
Own Damage Cover
Covers the damage and loss incurred by the insured four-wheeler
Personal Accident Cover
Available up to 15 lakh
Add-on Covers
Various add-ons are available based on the policy such as zero depreciation cover, return to invoice cover, roadside assistance, etc.
Cashless Claim
Available at the network garages of the insurer
No Claim Bonus
Up to 50% Benefits of Buying Car Insurance?
A car insurance offers a host of benefits to its policyholders. The key benefits are as follows -
- Helps You Stay Legally CompliantA car insurance helps you stay legally compliant as according to Indian Motor Tariff, every car owner is mandatorily required to have at least a third-party car insurance policy. The absence of which is punishable with a fine of Rs. 2,000 and/or imprisonment of up to tiga months.
- Protection Against Third-Party LiabilitiesA car insurance policy helps you mitigate third-party liabilities such as bodily injuries, temporary/permanent disability, death as well as property damage. While, the compensation of third-party property damage is limited to Rs. 7.lima Lakh, there is no compensation cap in case third party bodily injuries, disability or death.
- Protection Against Own-Damages A car insurance policy helps you keep yourself financially secured against the own-damage expenses of your car. Damages incurred in road accidents, natural calamities, man-made disasters, fire, explosion, vandalism, etc are covered under standalone own-damage as well as comprehensive car insurance plans.
- Coverage Against TheftA car insurance policy also provides coverage in case of theft of your car. In case your car gets stolen, your insurance company provides you with your car’s Insured Declared Value (IDV) which corresponds to the market price of your car.
- Personal Accident Cover With a car insurance policy, you can also get a personal accident cover of up to Rs. 15 Lakh which offers a coverage in case of death, bodily injuries as well as disability of the policyholder in a car accident.
Here’s your detailed guide to all car insurance terminologies.
Car insurance quotes refer to the premium quotes at which car insurance plans are available. A car insurance price depends on various factors such as car’s make, model, variant, engine capacity, RTO location, etc.
A car insurance premium calculator is an online tool which helps you calculate your car insurance premium price amount instantly and correctly. It helps you save your time as well as assists you in making an informed decision.
Every car insurance plan comes with a validity period after which it needs to be renewed. A car insurance renewal is a simple and easy process. It helps you keep your car insurance policy valid and active to mitigate all legal troubles and financial losses.
A comprehensive car insurance plan is a bundled cover which provides coverage for both third-party liabilities as well as own-damages incurred by you in an unfortunate event like road accident, natural calamity, fire, theft, explosion, strikes, riots, etc.
A third-party car insurance is the most basic type of car insurance plan which shields you against third-party liabilities such as injuries, death, third-party property damage. The compensation for third-party property damage is limited to Rs. 7.lima Lakh.
Zero Depreciation CoverA zero depreciation cover is an add-on cover available with standalone own-damage plans and comprehensive car insurance plans. A zero depreciation car insurance add-on helps you shield yourself against depreciation expenses of your car.
Car insurance add-ons are extra coverages which help you enhance the coverage of a standard car insurance plan. These add-ons can be availed with standalone own-damage cover and comprehensive plans. Zero depreciation cover is the most popular add-on.
Claim Settlement Ratio refers to the percentage of the claims settled by a car insurance provider out of the total claims received in a financial year. The higher the CSR, the better it is.
Insured Declared Value (IDV) refers to the maximum amount your insurance company provides at the time of a constructive total loss (CTL) or theft of your car. It refers to the current market value of your car.
A standalone own-damage car insurance plan is a type of car insurance which provides coverage only for own-damages incurred by your car in an unfortunate event, like accident, natural disaster, etc. It can be clubbed with a third-party plan.
