Why is Car Insurance required?
As per the Motor Vehicles Act, 1988, it is essential for every car owner to have a valid car insurance policy associated with the vehicle. Refraining from doing so will not only leave you vulnerable to hefty fines but also removes the safety net you would have had in case your vehicle met with an accident. Car Insurance is mandatory in India irrespective it is a personal or a commercial vehicle.
However, it is necessary for a policyholder always to carry insurance certificate while driving. Car Insurance is essential as it gives you the confidence to drive on the road peacefully. At times of emergencies, it acts like a boon to the policyholder.
To prevent financial setback in car repairs and costly hospital bills to treat accidental injury, it is a smart move to opt for four-wheeler insurance and stay protected at all times. As such, valid four-wheeler insurance will keep you safe from monetary hassles and get your car and the third- party car repaired without burning a hole in your pocket.
Types of Car Insurance Plans in India:
- Comprehensive Car Insurance Plan
- Third-Party Insurance Plan
- The first one is the insured person, or we can say the policyholder.
- The second one is the insurance company who issues the policy to the policyholder.
- The third one is the person who claims the loss or damage from the insurance company for being injured by the insured
Comprehensive car insurance policy, just like its name, covers the loss or damage to the insured vehicle, personal accident as well as the third-party liability caused by either natural or human-made calamities such as theft, accident, damage due to earthquake, fire, etc. Under this policy, the personal accident is also covered. Any loss or damage happened to the driver and car, along with the passengers sitting in the car are covered. This policy is extremely popular as its offers end to end coverage to the policyholder and you need not to pay from your own pocket.
Comprehensive Car Insurance Coverage
Comprehensive Insurance Policy is one of the most valuable type of car insurance. It covers both third party liabilities as well as expenses of damages to your own vehicle. In India, the comprehensive car insurance policy provides a coverage of glass damage, damage from hitting a bird or animal, floods, fire and so on. Having a Comprehensive Car Insurance Policy gives you following benefits.
It covers the loss or damage incurred to your vehicle in case of natural as well as human-made calamities.
It covers the damage or loss that you might cause to a third party in terms of life or property.
Some policies also cover you for personal accident.
Third-Party Insurance is one of the most common types of car insurance. A contract between an insurer and the insured is called an insurance policy. Whereas in case of car insurance, there is a third party who is neither an insurer nor insured. Third-party is a person who gets affected in an accident caused by the insured. They are mainly the people in the vehicle like passengers, driver or the owner of the other car, and sometimes even the pedestrians also. So, there are mainly three parties involved in a third-party liability insurance policy:
As per the Third-Party car insurance policy, the insurer signs a contract with the insured person or the policyholder to indemnify the owner from the court of law. It incudes the loss or damage or injuries or death of a third-party or any damage to third party’s property which is hit by the insured vehicle. In such case the insurance company will compensate for the liabilities such as bodily injury, vehicle damage or third -party death. In case of injury or death, the liability is unlimited. Having third-party liability insurance is mandatory by law. If any vehicle is affected in the accident by you, having third-party car insurance will help you to reimburse all the expenses caused to the car that you have dashed into. In third- party Insurance, the other party will receive the compensation amount for the damage and protect you from a financial catastrophe.
The coverage offered by third-party insurance is very cost-effective and the premium rates in Third-party are low. Every year, IRDAI defines the price of the product.
Third-Party Car Insurance Coverage:
Death of Third Party:
The insurance policy covers the death of the third party due to the accident with the insured vehicle. The death case will be directly reported to the MACT (Motor Accident Claims Tribunal) and the claims have no limits. It isnecessary to include driver’s license number and the name and details of the witnesses while lodging the FIR.
Damage to the property:
TPL (Third-Party Liability) insurance also covers the property damage of third party. In this case, the insurer will pay for any kind of damage to the property of third party by the insured.
Loss or damage to third-party leading to disability:
The policy covers the loss or damage to the third party which causes any kind of disability by the insured vehicle. The compensation is different in terms of any partial disability or total disability.
Owner cover:
It also covers owner of the vehicle who drives the car in case of an accident. This is a compulsory cover with any third-party insurance policy.