What Is Car Insurance? Types Of Car Insurance – Cooks Beautiful

Car insurance is a contract between a car owner and a general insurance company in which the latter agrees to cover the car owner against financial damages resulting from an unfortunate incident involving his or her vehicle. Third-Party Car Insurance, Standalone Own-Damage (OD) Car Insurance, and Comprehensive Car Insurance are the three types of car insurance policies available, depending on the scope of coverage. Policyholders must renew their car insurance on time to continue to receive the benefits of these policies.

Types of Car Insurance

  • Comprehensive Car Insurance

A Comprehensive Automobile Insurance policy is the most comprehensive car insurance coverage available, and it obligates an insurance company to pay for both third-party financial liabilities and the insured’s car’s own-damage. Aside from car accidents, the coverage covers natural disasters, man-made disasters, self-ignition or lightning, explosion, fire, theft, and so on.

  • Third-Party Car Insurance

In India, having a third-party vehicle insurance policy is a legal requirement for driving a car. It is also known as Liability Only Automobile Insurance Policy because it is the most basic car insurance plan. The insurance company is responsible for paying for bodily injuries, permanent disability, temporary disability, and death of a third party caused by an accident involving the insured’s vehicle under this policy. This plan also includes up to Rs. 7.5 lakh in coverage for third-party property damage.

  • Own Damage Car Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) launched the standalone Own-Damage car insurance policy in September 2019. The insured is solely covered for own-damage to his or her four-wheeler in the event of a road accident, natural/man-made calamity, fire, explosion, theft, or any other mishap under this plan. A standalone own-damage car insurance policy attempts to give the insured the freedom to choose the insurance company of their choice.

Benefits Of Buying Car Insurance?

A automobile insurance policy provides a number of advantages to its policyholders. The following are the main advantages:

  • A car insurance coverage keeps you legally compliant, as every automobile owner in India is required to carry at least a third-party car insurance policy, according to the Indian Motor Tariff. The lack of which is punishable by a fine of Rs. 2,000 and/or a three-month jail sentence.
  • Third-Party Liability Insurance is a type of insurance that protects you from third-party liability.
  • Third-party liabilities such as bodily injury, temporary/permanent disability, death, and property damage are all covered by an automobile insurance policy. While third-party property damage compensation is capped at Rs. 7.5 lakh, there is no restriction on compensation for third-party physical injury, incapacity, or death.
  • Protection against Self-Damage A automobile insurance coverage protects you from the financial consequences of your car’s own-damage expenses. Road accidents, natural disasters, man-made disasters, fire, explosions, vandalism, and other perils are covered by standalone own-damage and comprehensive car insurance policies.
  • Coverage Against Theft car insurance policy will also protect you if your vehicle is stolen. In the event that your car is stolen, your insurance company will give you the Insured Declared Value (IDV), which is the market value of your car.
    Accident Insurance for Individuals
  • A personal accident cover of up to Rs. 15 lakh can be added to a motor insurance policy, providing coverage in the event of the policyholder’s death, bodily injury, or disability.

Leave a Comment