As per law, every car plying on Indian roads needs to be insured. A car insurance policy not only helps you abide by the law, but also offers a range of benefits. However, before you a buy car insurance policy online or otherwise, it’s important to know about the different types of policies to make an informed choice. In this article, we will talk about the different types of car insurance policies and their benefits.
- Comprehensive Car Insurance Policy
A car insurance policy offers a complete financial protection to you in case your car suffers damages or is involved in an accident causing losses to a third-party. This type of car insurance plan provides you with a financial cushion in case your car suffers damages due to natural or man-made disasters such as earthquake, flood, lightning, theft, riots and terrorism among others.
Also, in an event where a third-party is the victim of an accident involving your vehicle, the damages suffered are covered under a comprehensive policy. It is one of the most sought-after car insurance plans in India as it offers an all-round protection.
While earlier a comprehensive policy had an in-built personal accident (PA) cover, following the orders of the Insurance Regulatory and Development Authority of India (IRDAI), the PA cover is now unbundled from the comprehensive plan.
- Third-party car insurance
A third party car insurance policy is another common type of policy available in the market. As against a comprehensive policy, this plan covers damages suffered by a third-party involving your car. In other words, this policy doesn’t cover you or your vehicle for the losses suffered.
As per the Motor Vehicles Act, 1988, it is important for every car to have a third-party insurance policy. It protects you, the car owner, from legal liabilities arising due to losses/damages caused to a third-party. To put simply, your insurer pays for the damages suffered by a third-party due to your car.
Often these damages can result in a long legal battle that can strain your finances. A third-party car insurance policy offers you the much-needed financial cushion in such a scenario. IRDAI has made it mandatory to avail a long-term third-party car insurance policy up to 3 years for car owners. The move has its benefits as there’s no need to renew the policy every year. Once availed, it’s valid for 3 years.
- Commercial car insurance
This is another type of car insurance plan available in India. The components of a commercial car insurance policy are the same as that of comprehensive car insurance except that it’s applicable for vehicles used for commercial or business purposes.
It is particularly useful for enterprises who use their cars for carrying out business activities. Note that in case your car with comprehensive coverage is used for a commercial purpose, your insurer may deny your claim.
How to buy car insurance?
You can buy a car insurance policy online or offline. However, before you buy a policy, it’s important to compare policies offered by different insurance providers. At the same time, it’s crucial to know the policy inclusions and exclusions. Read the policy document to know the terms and conditions well and make sure you know the claims process.
Make sure to fill up the proposal form correctly and provide all the information with utmost accuracy. Any misinformation can lead to claim rejection later. Generally, when you buy a policy online, the premiums are on the lower side.
This is because the insurer saves on overhead and administrative costs, the benefits of which are passed in the form of lower premium. Also, as a buyer, purchasing online is more convenient as you don’t have to manage multiple paperwork and forms.