Car insurance is one of the most crucial documents that is required to legally drive a car in India. More than just the force of law, car insurance is an essential element that saves you from the financial burden of paying for damages and helps reduce your liability in case your car meets with an accident. In order to safeguard yourself from all kinds of trouble, it is important to carefully pick car insurance that can help you when you need it the most. The good thing is that you choose a protection cover that you want and include it in your insurance for maximum coverage and peace of mind. And to help you make the right choice here are the types of car insurance coverages that you might want to include the next time you buy your car insurance.
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Liability Coverage
A liability coverage is a compulsory requirement of law as it is meant to cover damages when you are at fault during an accident. This is an important coverage to have in any car insurance.
What is liability coverage?
Also known as third-party liability coverage, this insurance cover comes into play in the unfortunate event of an accident that is determined to have been caused by you. In such cases, a liability cover protects you from paying damages caused to a third party which can include paying for medical expenses in addition to vehicle damage. Liability coverage is the most important coverage in any insurance as it is a mandatory requirement of law as per the Motor Vehicle Act.
What are the benefits of liability coverage?
In case of an accident, liability coverage is beneficial in protecting you from:
- Paying for the replacement and/or repair cost of the damaged property of the third-party involved
- Paying for the medical treatment and/or hospitalisation bills of the third party in case of injury
- Liabilities that arise out of the death of the third-party
Adding a liability cover is the legal obligation that you must fulfil when buying car insurance. When adding the liability cover, it is always advised to pick a higher sum assured to minimise out-of-pocket expenses and liabilities, even if the cover limit is exhausted.
Collision Coverage
Irrespective of whether a third party is involved, in case of an accident, your car is sure to suffer some damage that can prove to be quite expensive to repair. This is where a collision cover comes in handy.
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What is collision coverage?
Also known as own damage cover, collision coverage comes in handy when your vehicle is involved in a collision. The collision cover takes care of the costs involved in repairing your vehicle after a collision. While adding a collision cover to your insurance is not mandated by the law, it is highly advisable to add one anyway.
The premium you pay for the collision coverage is calculated by taking into consideration the age of your car and its Insured Declared Value (IDV). Whenever a claim is filed under collision coverage, the insurance company pays the maximum amount payable by calculating the IDV after subtracting the accumulated depreciation. It is advisable to include a collision cover, especially when the vehicle is relatively new, or is financed. As the car gets older, the collision cover can be reduced.
What are the benefits of collision coverage?
In case of an accident, the collision cover offers the following advantages
- Paying for the damages caused to your own vehicle
- Paying the maximum payable policy amount in case the cost of repairs exceeds the current market value of the car, or where the car is a total loss.
Personal Injury Coverage
When you are involved in an accident, there are always chances of getting injured. In such cases, a personal injury cover can come in handy.
What is personal injury coverage?
As the name suggests, personal injury coverage protects you and your fellow passengers from paying for expensive medical bills in case of any injury suffered during an accident. Such payment is done by the insurance provider irrespective of who was at fault. This cover reimburses medical expenses (up to the insured amount) incurred as a result of the accident.
What are the benefits of personal injury coverage?
Personal injury coverage offers the following benefits:
- Protection from paying medical/hospitalisation bills for any kind of injury resulting from the accident
- Payment by the insurance provider irrespective of who caused the accident
- Can be bought not just for the vehicle driver, but also for the passengers, helping you make the most out of the coverage.
Uninsured and Underinsured Motorist Protection
Imagine a scenario where your car is hit by another vehicle that is uninsured. In such cases, you will be paying out for the expenses from your own pocket. But don’t worry, as the uninsured and underinsured motorist protection cover is there for your rescue.
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What is uninsured motorist protection?
As the name suggests the uninsured or underinsured motorist protection cover saves you from paying up for the damage suffered by you or your vehicle in the case where the accident is caused by a motorist that either has no insurance or has insurance that is not sufficient to meet your expenses.
What are the benefits of uninsured motorist protection?
The uninsured or underinsured motorist protection has the following benefits:
- Pays for the additional or total damages suffered by your vehicle in an accident caused by an uninsured or underinsured motorist
- Pays for additional or total medical/ hospitalisation bills in case of an accident caused by an underinsured or uninsured motorist
Comprehensive Coverage
If you are looking for the highest level of protection in your car insurance, then a comprehensive coverage is what you need.
What is comprehensive coverage?
Comprehensive insurance coverage is a cover that includes the maximum level of protection in car insurance. It is a one-stop cover that offers protection from all kinds of risks arising out of damages pertaining to the driver of the vehicle and its passengers, the vehicle itself, third-party vehicle, third-party driver and passenger and even third-party property and other factors. While the cover is comprehensive in nature and comes with a high add-on premium, owing to its nature, it is also one of the most secure add-on covers for any car insurance.
What are the benefits of comprehensive coverage?
A comprehensive insurance cover offers the following benefits:
- Included a holistic protection plan that covers several risk factors
- Covers protection against non-collision factors such as theft, fire damage, flood damage, storm damage etc.
- Can be bought as per your budget
Summary of Types of Car Insurance Covers
A document that is compulsory to drive in India, car insurance is more than just a legal formality. It is a tool that can protect you from all kinds of financial trouble and liabilities whether or not your car is involved in an accident. By carefully picking up the right add-on coverages you can ensure a hassle-free driving and ownership experience even in case things go south.
FAQs about types of car insurance coverage
Q. Is it necessary to have car insurance in India?
Yes, as per the Motor Vehicle Act, having car insurance with at least third-party damage cover is compulsory to drive in India.
Q. How can I avoid paying damages caused to someone else’s car in an accident?
A third-party liability cover protects you from paying damages caused to a third party which can include paying for medical expenses in addition to vehicle damage.
Q: How can I avoid paying for damages caused to my car in an accident?
A own-damage cover takes care of the costs involved in repairing your vehicle after a collision.
Q. Which insurance cover offers the maximum protection?
A comprehensive cover offers the maximum level of protection in car insurance. It is a one-stop cover that offers protection from all kinds of risks arising out of damages pertaining to the driver of the vehicle and its passengers, the vehicle itself, third-party vehicle, third-party driver and passenger and even third-party property and other factors.
Q. What are the various types of insurance coverage?
Various types of insurance coverage include third-party coverage, collision coverage, personal injury coverage, uninsured motorist coverage and comprehensive coverage.
Q. Which cover can protect me from paying for damages in case my car is damaged due to the fault of a person having no insurance?
An uninsured motorist cover saves you from paying up for the damage suffered by you or your vehicle in the case where the accident is caused by a motorist that either has no insurance or insurance that is not sufficient to meet your expenses.
Q: Which insurance cover can protect me and my loved ones from paying expensive medical bills in case of an accident?
A personal injury cover protects you and your fellow passengers from paying for expensive medical bills in case of any injury suffered during an accident. It can be bought not just for the vehicle driver, but also for the passengers, helping you make the most out of the coverage.
