Car Insurance Basics: Understanding Ideal Coverage

Basic aim of car insurance is to protect against financial losses arising due to unforeseen circumstances and unfortunate events. Generally, terminologies associated with insurance can seem confusing and lead to a lot of queries.

Do I really need car insurance? Should I go for car insurance just to comply with the law? What is the ideal car insurance coverage for me? Read ahead to find out the answers to these questions and understand ideal car insurance coverage for you.

Protecting Third Parties

Sometimes, careful car drivers also end up causing damage to people on the road or their property. Third-party Insurance helps in such cases. The Motor Vehicles Act, 1988 has made it mandatory for vehicle owners to opt for Third-party Liability insurance in India.

It is illegal to drive a car without a valid insurance policy. This makes it important to buy at least a Third-party Liability insurance policy to stay on the right side of the law.

Comprehensive Coverage

Do you need car insurance if you drive safe? The answer is yes. Driving safe does not guarantee that your car will not be damaged because of man-made or natural calamities. Car theft is also a possibility. This is where a Comprehensive Car Insurance policy comes in handy. It not only offers you the compulsory Third-party Liability insurance but also covers risks such as theft, damage due to calamities, etc.

If you want to go a step ahead and strengthen your minimum car insurance coverage, then going for a Comprehensive Car Insurance policy is the right choice. A Third-party Liability insurance policy safeguards the financial interests of other parties whereas a Comprehensive Car Insurance policy is designed to protect your financial interest.

How About Something Extra?

Add-ons can make a huge difference when it comes to enhancing your insurance coverage. If you travel with your family frequently, you might want to consider opting for the Personal Accident Cover for Passengers. Those residing in flood-prone areas might want to consider the Engine Protect Add-on.

Zero Depreciation Cover is one of the popular Add-ons. It is also known as Nil Depreciation or Bumper-to-Bumper cover. If you have this Add-on, your insurer will cover the cost of repairing the damages of your car without deducting the depreciation amount. Note that Add-ons can be opted along with a Comprehensive Car Insurance policy and not with just a Third-party Liability policy.

Ideal Coverage

The extent of your coverage should depend upon how frequently you drive, your driving pattern, route, vehicle, and the location where you reside. It is suggested to go for Third-party Liability insurance if you just want to comply with the law. If you intend to protect yourself from financial losses arising out of unfortunate events such as an accident, then choosing a Comprehensive Car Insurance policy and opting for suitable Add-ons is the right choice.