In India, car insurance is a vital component of vehicle ownership, offering financial protection and peace of mind. With various policy types available, it’s important to understand the differences to choose the one that best suits your vehicle needs. Knowing each type’s features, benefits, and limitations can help you make an informed decision and ensure adequate coverage. So, in the section below, we have listed down the types of car insurance policies in India.
Different Types of Car Insurance Policies
Car insurance policies in India generally fall into three broad categories: Third-Party Liability Insurance, Standalone Own-damage, and Comprehensive Insurance. Listed below are the different types of car insurance policies available in India that you need to be aware of before buying one:
- Third-party Car Insurance: A car third party insurance is a mandatory car insurance policy in India. The Motor Vehicles Act of 1988 has made it a legal mandate for all car owners in India to have at least a third-party car insurance policy. This policy protects policyholders financially in case the insured car causes any damage to a third-party.
- Standalone Own-damage Car Insurance: A Standalone Own-damage Car Insurance provides financial assistance if there is any damage to the insured car. This policy does not provide coverage for third-party liabilities.
- Comprehensive Car Insurance: Comprehensive Car insurance provides financial protection if the insured car sustains any damage or causes damage to a third-party under any unfortunate circumstances. As this policy offers enhanced coverage, its premium is higher than the other policy types.
Add-ons Available with a Car Insurance Policy
Listed below are the different add-ons that you can include while buying a car insurance policy:
- Roadside Assistance: The Roadside Assistance Cover assists if your vehicle breaks down in the middle of the road. With this add-on cover, you can get round-the-clock car breakdown assistance and towing services.
- Zero Depreciation Cover: The value of the car’s parts depreciates over time, and depending on this depreciation, the final claim amount is settled. However, with the Zero Depreciation Cover, you will get complete financial protection, irrespective of the depreciation amount of the car parts.
- Return to Invoice Cover: The Return to Invoice (RTI) add-on is an optional feature in comprehensive car insurance policy. It provides additional financial protection by covering the difference between your car’s current market value and the original invoice price if your vehicle is declared a total loss due to theft or an accident.
- Key Replacement Cover: There are situations when you lose or misplace your car keys. In such an event, the Key Replacement Cover will protect you financially by allowing you to get the keys repaired or replaced.
- No Claim Bonus Protector: The No Claim Bonus cover keeps your accumulated No Claim Bonus intact even after raising a car insurance claim. This means that even if you raise a car insurance claim, you can still get discounts on the premium with the accumulated No Claim Bonus.
- Engine Secure Cover: Including the Engine Secure Cover in your car insurance policy will give you financial protection for the damaged engine.
- Consumables Cover: Typically, a car insurance policy does not provide financial coverage for consumables like nuts, bolts, gearbox oil, etc. However, when you have this add-on, you will get financial protection for these consumables as well.
Please note that you must pay a higher premium to include any of the above-listed add-ons in your car insurance policy. So, get add on insurance for car and ensure an enhanced protection against unfortuante events.
Summing Up
So, now that you know about the different car insurance types, you can easily choose the one that best suits your needs. You should do a detailed research before buying a car insurance policy.
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