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Physical Damage Coverage in Car Insurance

Team AckoJul 22, 2021

A policyholder can opt for car insurance online based on requirements. This means that the policyholder can choose the most suitable type of policy that will be a potential financial backup in case of damages. By law, one needs to have a basic Third-party car insurance policy that does not cover the owned vehicle. This is obviously inadequate when physical damage to the car occurs. Thus, one should go for a physical damage car insurance cover for receiving more financial help in case of damage to the car.

Physical Damage Coverage in Car Insurance

What Is Physical Damage Coverage in Car Insurance:

Physical damage or damage insurance refers to a car insurance policy that covers damage to the insured vehicle by providing financial help to the policyholder in case of damage to the insured car. This is a type of an extensive motor insurance policy as compared to the basic Third-party Insurance cover. A third-party cover only pays when the insured car causes harm to other people or their property. 

On the other hand Physical damage cover not only covers the insured car but a policyholder can also buy additional coverages like Zero Depreciation, Roadside assistance, Return to Invoice cove, etc. Additional coverages help in getting an adequate car insurance cover. It helps gain financial insulation against unfortunate events, for example accidents. This type of policy is extensive in nature as compared to basic Third-party Liability cover.

Physical damage insurance is similar to the own damage component of a comprehensive car insurance policy. Physical damage offers coverage against various incidents like damage to the insured car like natural calamities, vandalism, theft, fire, etc. 

What is Covered Under Physical Damage Cover?: 

The coverages of a Physical damage insurance policy are situations in which the policyholder can raise a claim. These are also called "inclusions" of the car insurance policy. Here is a list of coverages of a Physical Damage cover:

  1. Theft: Car theft will be covered under physical damage insurance.

  2. Damage due to natural calamities: Natural calamities like earthquakes, floods, hailstorms, cyclones, etc. are covered. 

  3. Damage due to man-made calamities: Man-made calamities like riots, vandalism, strikes, etc. are covered.

  4. Accidental Damage: Damages arising out of an accident are covered.

  5. Fire damage: Damage to the insured car due to fire, explosion, self-ignition, etc. is covered under physical damage.

  6. Animal attack: Damage to the car from an animal attack is covered.

  7. Damage when in transit: Insurance is offered for damages occurred when the car is in transit via Railways, Airways, Roadways, or an Elevator.

  8. Damage caused by a terrorist attack.

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Exclusions: What is Not Covered Under Physical Damage Cover?: 

Exclusions are situations that are excluded from an insurance policy. During these, a policyholder cannot claim against the physical damage car insurance policy. Here is a list:

  1. Damage caused when driving in an intoxicated state.

  2. Damage due to carelessness.

  3. Consequential loss i.e., additional damage caused while trying to drive a damaged car.

  4. Damage caused when the car is used in illegal or criminal activity.

  5. Damage to the car when driving without valid documents.

  6. Electrical or mechanical damage.

  7. Regular wear and tear.

  8. Damage occurred outside the geographical limits of the country.

  9. Depreciation suffered by the vehicle unless covered under the Zero Depreciation Add-on.

  10. Damage occurred when the car was being used for a purpose other than what it is meant to be used for.

  11. Damage due to a war-like situation.

Types of Physical Damage Coverage: 

A Physical damage cover can be of different types depending upon the coverage it offers. This coverage can be chosen willingly by the car owner and is not mandatory by law. However, buying the Physical Damage cover ensures that maximum financial protection can be availed under a car insurance policy. A physical damage cover can be of the following types:

Comprehensive cover

This is probably the most extensive coverage available under car insurance. A policyholder that chooses a Comprehensive car insurance policy can even customise the policy to an extent. This type of Physical damage cover includes injuries or damage to third-party property or person, own damage i.e. physical damage to the insured car due to a number of reason, and an option to purchase useful add-ons like:

Collision Cover

A collision cover offers financial coverage against the damages caused by an accident, more specifically due to a collision. Here are a few examples:

  • A car getting out of control and hitting a poll.

  • A car colliding with another vehicle during an accident.

  • Hitting an animal.

  • Colliding with a tree or a wall.

  • Etcetera

Differences between Comprehensive Cover and Collision Cover:

These two are types of Physical Damage cover that a policyholder can buy if he/she wishes to get financial coverage against physical damage to the car. Both types offer different coverage benefits and are useful in various situations. Choosing the best-suited one for yourself can depend upon your driving habits and car usage. Here are the major differences between Collision and Comprehensive covers:

Features Comprehensive Cover Collision Cover
Third-party Car insurance Includes Third-party liabilities cover Third-party Liability cover is excluded
Own Damage Cover Physical Damages to the car are covered under various circumstances Physical Damages to the car are covered only in case of collision
Theft Theft of the car is covered Theft or burglary is not covered
Personal Accident Cover A personal accident cover of Rs. 15 Lakh is included Does not include a Personal Accident Cover
Customizations Can be customized with add-ons such as Zero Depreciation or Roadside Assistance Some insurance companies may allow customizing a collision cover with a fire and theft policy
Fire damage Damage due to fire is covered Damage due to fire can be covered with an additional coverage option

What is the Need to Opt For a Physical Damage Cover?

A physical damage car insurance cover acts as a financial safety net for carrying out repairs when the car is damaged. One does not need to delay repairs due to a financial crisis as the insurance company will pay the major part of the repair bill. The following reasons highlight the need for buying a physical damage car insurance cover:

  1. The insurance company will pay a lump sum amount if the car gets stolen.

  2. You can get a car loan when you have a valid car insurance policy in place.

  3. India has witnessed a number of natural calamities where property damage has occurred. The cost of such repairs or total loss is paid by the insurer.

  4. You don't have to worry about the repair cost when your car catches fire due to various reasons like an explosion, lightning strike, self-ignitions, etc. 

  5. Damage from an animal attack can be repaired with the help of insurance.

  6. Malicious acts like riots, vandalism, etc. would virtually have no effect on your car with insurance. 

  7. You can get the car transported from one place to another and not worry about damage while it is in transit.

  8. You can get peace of mind when you are assured that the insurance company has your back.

Frequently Asked Questions

What does physical damage insurance for semi trucks include?

A commercial vehicle like a semi truck can be covered under a commercial Physical damage insurance policy and it includes the following situations:

  • Theft: Vehicle theft i.e the policyholder will get a lump sum if the semi truck gets stolen.

  • Natural calamities: When damage occurs due to natural calamities like earthquakes, floods, hailstorms, cyclones, etc. it will be covered under insurance.

  • Accidental Damage: Damages to the semi truck due to an accident are covered.

  • Man-made calamities: When damage occurs due to man-made calamities like riots, vandalism, strikes, etc. it will be covered under physical damage cover.

  • Fire damage: Damage to semi truck due to fire, explosion, self-ignition, etc. is covered under automobile physical damage insurance.

  • Animal attack: Dents or other damages to the semi truck from an animal is covered.

  • Damage when in transit: Insurance is offered for damages occurred when the semi truck is in transit via Railways, Airways, Roadways, or an Elevator.

  • Terrorism: Damage to the semi truck due to terrorist activity is covered.

2. What is the physical damage coverage definition in car insurance?

Physical damage coverage can be defined as any type of damage to the insured car that is covered under the terms and conditions of a car insurance policy. This is also called an own damage cover and is highly advisable to opt for. A Physical damage cover offers repair or replacement cost on the insured car when damage occurs.

3. What does physical damage insurance cover?

Physical damage insurance covers damage to the insured vehicle from situations like theft or burglary, vandalism, earthquake, terrorist activity, accidental damage, fire, riots, animal attack, landslide, rockslide, etc.

4. Are dents on a car's body covered under physical damage insurance?

Yes, A physical damage insurance policy covers dents on the car if they are part of major damage

5. Which vehicles can be covered under a commercial physical damage insurance?

Almost all types of commercial vehicles can be covered under physical damage insurance. These could be taxis, auto-rickshaws, busses, trucks, mixers, vans, etc.

6. Which factors determine the cost of a physical damage cover?

Factors like the Insured Declared Value (IDV) of the car, driving and claims history, make and model of the car, year of manufacturing, number of add-ons, the insurance company, etc. determine the cost of physical damage coverage.

7. Who should buy a physical damage insurance cover?

Every vehicle owner should go for a physical damage cover because the insured car can get damaged due to a lot of reasons. These not only include situations when driving on the road but also when parked in a secure location. Damages due to external factors like accidents can happen while driving the car and damage from reasons like natural calamities or riots can cause damage when it is securely parked.

8. What is meant by damage insurance?

Damage insurance covers damage to the insured vehicle from situations like accidents, theft, fire, natural calamities, etc.

9. What is the process for raising a physical damage claim?

A physical damage claim can be raised either by getting the car repaired in the insurer's network or in a non-network garage. You need to inform the insurance company about the damage as soon as possible. Then the insurer will send a surveyor to understand how much damage has occurred. The report will be assessed by the insurer and your claim will be approved or rejected. If it gets approved, then you can either opt for a cashless claim or a reimbursement claim as per your insurance company's process.

10. What is the difference between physical damage and collision cover?

Physical damage insurance covers damage to the insured car against many situations like theft, fire, accidents, calamities, etc. and the collision cover offers insurance against damage due to the car colliding with another object. This is the main difference between physical damage cover and collision cover.

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