What Does Car Insurance Cover?

Car insurance provides a financial cover at the time of unfortunate events involving your car. While getting your car insured, it is important that you are well aware of the available options. You can choose from a plethora of coverages offered by a comprehensive type of car insurance policy. In this article, we have information on what are the coverages of a car insurance policy.

Types of Insurance Coverage

There are two types of car insurance policies you can choose from. Their prices differ based on the scope of the coverage they offer. One can choose to either buy a Third-party Liability Car Insurance or a Comprehensive Car Insurance.

Buying a third-party policy is mandatory under Chapter 11 (Section 145 to 164) of The Motor Vehicles Act, 1988. However, since a comprehensive policy offers a wider car insurance coverage it is advised to buy this type of policy to get the best insurance possible. Also, if you wish to enhance the coverage further, you can do so with add-ons for a comprehensive car insurance policy.

What Does Car Insurance Cover?

Depending on the type of car insurance policy one opts for, the following is covered under Car Insurance:

A) Coverage for Third-party Car Insurance

  • Third-party property damage – Any type of accidental damage caused to the property owned by a third-party person will be covered.
  • Cost of treating Injuries – The cost of treating injuries caused to the third-party person due to the insured car will be covered.
  • Death Compensation – In case of death of the third-party person, their family will be compensated under this policy.
  • Legal Liabilities – Legal liabilities arising due to an event involving the insured car will be covered under this policy.

B) Coverage for Comprehensive Car Insurance

  • Complete third-party coverage (mentioned above) – A comprehensive policy includes all the coverage which a third-party policy offers.
  • Damages to own car – Cost of repairing damages caused to the insured car will be covered under a comprehensive car insurance policy.
  • Personal Accident Cover – Cost of treating injuries caused to the owner-driver will be covered.
  • Theft – The current Insured Declared Value (IDV) of the car will be compensated to the owner of the insured car in the event of theft.
  • Fire – Similar to theft, the car will be treated as “total loss.” Under total loss, the owner will be compensated with the current Insured Declared Value (IDV) of the insured car.
  • Natural calamities – If the insured car is hit by a natural calamity like flood, earthquake, landslide, rock-slide, cyclone, hurricane, etc. The owner will be compensated for the amount of damage caused.
  • Man-made calamities – In case the insured car is damaged due to man-made calamities like an act of terrorism, vandalism, riots, etc. The owner will be compensated for the amount of damage caused.
  • Add-ons – With a comprehensive car insurance policy, the owner can extend the scope of car insurance coverage by purchasing add-ons. Add-ons are additional coverage options which are designed to suit specific requirements. There are a number of useful add-ons available across multiple insurance companies. Some of these add-ons are Zero Depreciation, Roadside Assistance, Return to Invoice, NCB protection, Engine Protection and Loss of Personal Belongings.

The Bottom Line

Getting your car insured is not a liability imposed by the government rather it is a helping hand to provide financial aid in an event of an accident. Also, by taking adequate measures for your car against theft or by renewing the policy on time, you are entitled to discounts on the premium. Thus, a car insurance policy will offer extensive coverage if the right type of policy is chosen.