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.

Should you Upgrade to a Comprehensive Insurance Plan?

Upgrading to a Comprehensive Insurance Plan is highly recommended for more extensive protection. While basic Third-Party Motor Insurance only covers damage you cause to others, a Comprehensive Plan extends coverage to include damage to your vehicle. This could be from collisions, theft, or natural disasters such as floods and earthquakes. It's particularly advisable if you own a newer or more expensive vehicle, where potential repairs or replacement costs could be very high. Car insurance coverage not only secures your financial responsibility towards third parties but also protects your investment in your vehicle. The added peace of mind knowing that you are covered for almost everything justifies the slightly higher premium. Moreover, with comprehensive coverage, in the event of a total loss, you receive the full insured declared value (IDV) of your vehicle, not just compensation for damages caused to others. This broader car insurance coverage ensures that significant repairs or the need to replace your car won't financially burden you. Considering the comprehensive range of protections it offers, upgrading your insurance plan can be a wise decision to safeguard against the unpredictable nature of driving and vehicle ownership.

Are there Exclusions with the Comprehensive Cover?

Comprehensive car insurance provides extensive coverage, but there are certain scenarios where claims might not be covered. Understanding these exclusions is very important to fully knowing the scope of your policy and the situations under which claims may be denied:

1. Wear and Tear

Damage resulting from normal wear and tear or ageing, which leads to consequential loss, is not covered. This includes any deterioration that occurs through regular usage over time without any specific incident.

2. Alcohol Influence

No claim will be entertained if an accident occurs and it is found that the driver was under the influence of alcohol or any other intoxicating substances. Driving under the influence not only voids the claim but is also a breach of road safety laws.

3. Illegal Driving

Driving without a valid driving license can nullify your insurance coverage. It's important to make sure that all drivers of the insured vehicle possess valid licenses to avoid invalidation of the policy.

4. War-Like Situations

Damages or losses due to war-like situations, including nuclear attacks, mutiny, or military uprisings, are generally excluded. These circumstances are considered beyond normal environmental or operational risks.

Add-on Riders Under the Comprehensive Car Insurance Policy

Enhancing your comprehensive car insurance with the right add-on riders can significantly improve your coverage and tailor it to your specific needs. These riders, while increasing your premium slightly, offer valuable protections that can save significant costs in the event of a claim, enhancing the utility of your policy. Some of the most useful add-ons include:

1. Depreciation Shield Cover

Often referred to as Zero Depreciation Cover, this add-on makes sure that you receive the full cost of replaced parts without any deductions for depreciation, especially useful for newer vehicles where replacement costs can be high.

2. Engine Protector

Important for protection against damages to your engine from monsoon-related flooding or leakage, the Engine Protector add-on covers the costs of repairs not generally covered under standard policies.

3. Roadside Assistance

This rider is invaluable in the event of breakdowns, providing services like towing, minor repairs on-site, and even accommodation benefits if the breakdown occurs far from home.

4. Consumables Expenses

Cover the cost of consumables such as engine oil, lubricants, nuts and bolts, which are not usually covered under a standard policy.

5. Conveyance Benefit

Compensates for the inconvenience caused when your car is under repair, providing a daily allowance for alternative transportation costs.

Add-on Coverages Under Comprehensive Car Insurance Policy

Comprehensive car insurance not only covers damages to your vehicle but also extends to third-party liabilities, making sure you are protected against costs arising from damages to other parties or their property. To further tailor your car insurance coverage types to your specific needs, consider these essential add-on coverages:

1. Zero Depreciation Cover

This cover eliminates depreciation on your car's parts when making a claim, ensuring you receive full reimbursement for repairs or replacements.

2. Engine Protection Cover

Provides coverage for engine damage caused by accidents, water ingress, or other unforeseen circumstances.

3. Return to Invoice Cover

This cover reimburses your car's purchase price in case of total loss, even if the actual market value is lower.

4. Roadside Assistance Cover

Provides emergency roadside assistance, including towing, battery jump-start, tyre repair, and fuel delivery.

5. No Claim Bonus Protection

Protects your No Claim Bonus (NCB) even if you make a claim.

6. Personal Accident Cover

Provides financial compensation to you or your family in case of accidental death or disability.

7. Consumable Cover

This covers the cost of consumables like brake pads, clutch plates, and engine oil during repairs or replacements.

8. Accessories Cover

Provides coverage for additional accessories installed in your car, such as audio systems, navigation devices, or alloy wheels.

9. Driver Comprehensive Cover

Extends coverage to include personal accident benefits for the driver.

10. Passenger Cover

Provides personal accident benefits for passengers in your car.

Conclusion

Understanding car insurance options can be complex, but comprehending your needs and choosing the right coverage from Bajaj Allianz General Insurance Company is crucial to protecting your valuable investment. Comprehensive coverage, enhanced with suitable add-ons, provides broad protection against a wide range of risks so that both you and your car are adequately covered. Consider your specific needs, the value of your vehicle, and the conditions you typically encounter to decide which coverage and add-ons are right for you.

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.