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What Is Car Insurance?

Author: Aditya Sehgal
by Aditya Sehgal
Posted: Jan 23, 2018

Car insurance is essentially a contract between a vehicle owner and a top car insurance company, that protects the car owner and covers the car against damages due to external and accidental means, for a regular premium.

Although it varies from policy to policy, a car insurance policy essentially covers bodily injury, property damage, medical payments due to an accident, physical damage and against uninsured or under-insured motorist coverage.

There are mainly two types of motor insurance policies available in India- a comprehensive cover and a third-party insurance. Of these, having third party insurance is mandatory by law if you own a car. A comprehensive cover will protect your car and yourself against damage, while a third-party cover protects you from having to pay damages to a third party who may have been involved and hurt in the accident.

Thus, car insurance allows you to drive on the accident prone Indian roads without worry. However, like with all types of insurance, it is important to read the fine print and understand the terms and conditions before you buy new car insurance. So, be sure to research well to find the best car insurance for you.

Car insurance (or motor insurance) protects your vehicle from risks, and is essentially a contract between the car owner and the insurance company, that covers your car against damages caused by external and accidental means, for a regular premium.

Car insurance premiums generally depend on the value of the car, type of coverage, vehicle classification, whether or not you add riders, etc. Thus, a motor insurance policy would allow drivers to drive on the accident prone Indian roads, without worries.

What Does Car Insurance Cover?

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Car insurance coverage differs from policy to policy. However, the basic coverage includes the following:

Bodily Injury Liability: Bodily injury claims of people who get hurt in an accident are covered.

  • Property Damage Liability: Third party property damage, like damage to another person’s car, is covered.

  • Medical Payments: Payments for hospitalisation of driver and/ or passengers are covered.

  • Uninsured and Under-Insured Motorist Coverage: Even when the negligent driver (and you are the third party) does not have enough insurance, you will be covered.

  • Physical Damage: When your car is damaged due to an accident or other natural disasters like a storm, car insurance will cover it.

Types of Car Insurance

There are mainly two types of insurance available in India- comprehensive coverage and third-party insurance. Let’s take a look at these one-by-one:

  1. Comprehensive Coverage: A comprehensive car insurance policy covers you and your vehicle against physical damage, theft, property damage, legal costs and a few other risks. It often comes with benefits like no claim bonuses and 24X7 roadside assistance, and so on.

  2. Third Party Insurance: Third party insurance covers you against having to pay for damages to a third party involved in an accident with you. That is, it protects a person and/ or their vehicle you may have hurt or damaged, through an accident. This type of car insurance is mandatory in India.

Choosing Car Insurance

The damages car insurance covers vary from policy to policy. It is therefore really important to read the fine print and understand terms and conditions of the policy before choosing new motor insurance for yourself.

Additionally, since there are many top car insurance companies that offer various policies, you have to research and compare thoroughly, before you decide which policy would be the best car insurance for you.

To do this you can also try approaching non-banking financial corporations (NBFC) to buy car insurance policy, instead of directly going to insurance companies.

About the Author

Aditya Sehgal is a blogger and loves to write on various niches. He is known for his in-depth knowledge on topics such as technology, finance, lifestyle, current trends etc. Being a passionate writer he also contributes his knowledge on various blogs

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Author: Aditya Sehgal

Aditya Sehgal

Flag of India

Member since: Sep 15, 2017
Total live articles: 8

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