Types Of Car Insurance Coverage : A Complete Guide

Taking insurance is necessary from a personal viewpoint and mandatory by legal means. So the second most obvious question that arises is what the different types of car insurance available are? Let’s just say there are enough options available to cater to all. We have a variety of insurance companies offering these varied types of car insurance policy with some features here and there. Let us first understand various types of policies mainly available to customers across India.

What are the Five Types of Car Insurance Coverage in India?

Coverage is the protection offered by an insurance company in case any unfortunate event takes place. This classification is based on who and what expenses are covered in various types of car insurance policy.

Third-Party insurance

If you meet with an accident with someone, there will be damages to the vehicle and medical expenses of a third-party that you need to pay. This can significantly increase your out-of-pocket expense. Apart from that, you will also have your own vehicle damages and medical bills to be paid. This all together can take a hit on your financial planning. So it is necessary to take car insurance so that your finances and safety are taken care of. It is mandatory for a vehicle to carry third-party insurance, at least while it is on the road. Third party car insurance helps you in paying the damages and medical expenses of third-party, thus saving you a part of your expenditure. Together with this, it helps you in legal compliance sparing you from the pain and stress that is caused due to legal non-compliance. The premium to be paid to get third-party insurance is also quite affordable, making it accessible to the significant population. The major drawback of this insurance is that you don’t get cover for your own expenses and damages.

Personal injury insurance

It is compulsory to take third-party car insurance, which covers expenses to be paid to third-party. But what about the medical expenses you yourself have to incur? Well, you can be covered under another plan, which is not really a type of car insurance policy but covers all the expenses related to medical costs that are incurred on account of the occurrence of an accident. The best part is that it covers all medical expenses of drivers as well as passengers.

Comprehensive Coverage Insurance

Under comprehensive coverage insurance, liabilities in relation to third-party as well as the owner are covered, making it the most beneficial policy of the given options. Also, it covers not only the accident but also some other situations like floods, tsunamis, fire, theft, which is an additional benefit as events like these are getting more and more common each passing day, and damages suffered due to such events are also huge. Coverage will help you avoid unnecessary payments in relation to these. The events not covered under this are war, nuclear attack, and wear and tear in the ordinary course of usage. Another drawback is that its premium amount is higher as compared to other insurance policies because of the additional facilities provided. It is recommended to understand what is IDV in insurance to get a better grasp on how comprehensive insurance premiums are determined.

Personal vehicle insurance:

The personal vehicle also covers two categories, which are two-wheelers and cars. Two-wheelers can be any whether it is operated by electricity or other fuels or whether it being a geared vehicle or non-geared; all are covered under one roof here. Similar is the case with cars. A single policy can have all types of cars covered under the same insurance, whether it being a regular car or SUV. Though, the sum insured could vary.

Commercial vehicle insurance:

A separate commercial vehicle insurance is required if your vehicle is used for commercial purposes. This is because its usage, wear and tear, and valuation works differently in the case of commercial usage. Frequently Asked Questions “I bought a car six months back, and I bought a third-party policy along with that. Now I am thinking of switching to a different type of car insurance policy. Is it possible to do so in the middle of the year?” asks Sumit No, you cannot switch to another type of car insurance policy in the middle of the year. You can do that at the time of renewal of the policy. Is it possible to choose add-ons in a comprehensive policy? Does it have any effect on the premium? Yes, you can opt for add-ons of your choice in comprehensive policy. The premium amount is decided based on add-ons opted. Is it possible to add the add-ons during the policy tenure if the policy year has already started? No, you will have to wait till your policy renewal to add the add-ons to your policy coverage.