Types of Car Insurance Coverage Explained

Types of Car Insurance Policy

In India, we have three major types of car insurance policies. To understand the car insurance coverage offered by each, here is a detailed explanation of each:

Third-party Liability Insurance

Third-party liability insurance only covers third-party damages/injuries. This policy does not cover damages to the insured vehicle. According to the Motor Vehicle Act of 1988, it is compulsory for every motorised vehicle in India to have at least a third-party liability cover.

Standalone Own Damage Insurance

A standalone own-damage car insurance is a policy that only covers damages to the insured vehicle. This policy does not provide coverage for third-party losses/damages. This is a suitable policy for people who already have a third-party policy for their car but are looking for their own vehicle damage policy as well.

• You have the option to include Add-ons
  With standalone damage insurance, you can purchase certain add-ons to expand the coverage limit. These may be NCB protection, engine protection, zero depreciation cover, personal accident cover, etc.

Comprehensive Car Insurance

As the name may suggest, comprehensive car insurance is a policy that provides the maximum coverage for your insured car. It offers both its own damage and third-party liability cover. So, you need not purchase any other policy if you have comprehensive car insurance.

The following are the car insurance coverage benefits under a comprehensive insurance policy:

• Third-party Liabilities
  Road mishaps cannot always be avoided. In some cases, accidents can impact others on the road as well. So, if the accident has caused damage or injury to a third-party person or property, your insurer will cover the losses. Compensation is usually provided to the third party to cover the losses.
• Own Damages
  Damage to your own vehicle is also covered. Your car may sustain damage due to various reasons, such as accidents, disasters, fires, etc. Apart from this, a car may also get stolen, leaving behind a major loss. So, in all such cases, your insurer is there to help you out. The repairing costs are provided by the insurer, and in case of total loss of a vehicle, the compensation is offered to the car owner.
• Add-ons
  Apart from the basic coverages of your car insurance, you can further extend the policy scope by purchasing additional coverages. Add-ons may not be offered with a third-party policy, and a standalone own-damage policy may have limited add-ons.
  Popular add-ons are:

• Personal Accident Cover

A comprehensive car insurance policy also includes PAC and personal accident cover. If the car owner sustains an injury during a car accident, the insurance company covers the medical expenses.

Exclusions of Car Insurance Policies

Exclusions are the conditions that remain out of reach of car insurance, as there are certain damages for which you cannot raise a claim. The damages due to the following reasons will not be covered:

1. Drink and drive
2. Driving without a valid licence
3. Participating in illegal racing
4. Wars and riots
5. Electrical and mechanical issues
6. General wear and tear (not when you have a zero depreciation cover)
7. The claim raised on a lapsed policy

Keep in mind that with a third-party liability policy, you may not be able to purchase add-ons.

Which is the Right Car Insurance Policy?

After understanding the car insurance coverages of various policies, it is time to choose the right policy for your vehicle. There is no one-size-fits-all answer to a car insurance policy. There are several factors that you may consider when deciding the type of coverage you want for your vehicle.

If you drive frequently or you have a new vehicle, a comprehensive policy can be helpful. However, if your vehicle is old enough, you don't drive frequently, or you only want to fulfil legal obligations, a third-party policy may suffice. A standalone own-damage policy only makes sense when you already have a third-party policy.

Conclusion

Understanding different types of car insurance coverage is the key to making the right choice. Now that you know about these differences, choose your preferred car insurance policy today! At Jio Insurance Broking, we make the decision easier for you. You can easily compare different plans on our platform to choose the most suitable one. Connect with us to make your car insurance journey easier and quicker than ever before!