Types of Car Insurance Coverages & Their Features

With the Motor Vehicles Act, 1988, mandating insurance for all automobiles, several insurers offer various products and services today. This has made choosing the perfect policy that fits all your requirements a tad difficult. Therefore, customizing a policy to include the required features and forego the unwanted ones is essential.

Given below are types of car insurance coverage to help you choose the best coverage for your car:

1. Third-party coverage

Third-party cover is mandated by the law and offers you a basic level of protection from liability arising out of accidents with a third-party. Hence, it is also referred to as liability-only plan or act-only policy. It is the cheapest option available but it does not cover the policyholder’s interests.

Let us look into a few features of third-party coverage:

• It is quite affordable.
• The policy insures bodily injuries as well as death of the third party.
• The insurance policy covers any damage caused to the vehicle or property of the third party.
• The insurance plan meets any legal obligations that arise.
• The third party car insurance is beneficial if you are purchasing a policy for an old vehicle whose market value is less than the cost of repair or replacement.

2. Comprehensive coverage

A comprehensive car insurance plan provides complete protection against the damages caused to your person and vehicle apart from having third-party liability and theft insurance. Hence, it is known as a comprehensive plan.

Let us look at the features of a comprehensive insurance policy:

• Offers a wide range of coverage options
• Covers accidental damages to the insured and their car as well as those sustained by the third-party
• Covers damage caused by man-made as well as natural disasters
• Add-on riders can be purchased separately to further enhance the insurance cover
• Cover also includes theft insurance

In a nutshell, a comprehensive insurance offers maximum coverage, but there are a few exclusions as well. You need to know these exclusions so that you don’t face any unpleasant surprises when you claim the policy.

• Normal wear and tear of the car is not covered
• Depreciation is not covered unless an add-on rider (Zero Depreciation) is purchased
• Breakdown of electrical or mechanical parts is excluded
• Any damage to the tyres and tubes of the vehicle is not included unless the vehicle meets with an accident, in which case, the compensation is up to 50% of the repair cost
• Any damage caused to the vehicle will be excluded if it is being driven by an unlicensed driver
• If the person driving the vehicle was under the influence of drugs or alcohol
• Damages caused due to war or nuclear attack will also be excluded

3. Personal accident cover

If you find a comprehensive cover to be costly, you can buy a personal accident cover when you buy car insurance online to insure yourself and your vehicle in case of an accident.

Let us take a look at some of the features of a personal accident cover.

• All costs arising an accident will be covered by personal injury protection
• The personal injury protection will cover the medical bills of the owner-driver. This can be enhanced by purchasing additional cover for driver as well as other passengers
• The insurance company will pay all the medical bills regardless of whose fault

As a car owner, you must be wise enough to choose the best coverage options to minimize the risks and maximize the benefits in the unfortunate event of an accident. Carefully analyse your requirements as well as the various factors that will surround your driving experience before choosing from the many available options. You can compare car insurance online and even analyse the various kinds of add-on cover and settle for the best car insurance policy. Ensure that car insurance renewal is on your checklist as the expiry dates approaches.

A mother of 2 lovely kids. Digital Marketer by profession and a blogger by passion! Here to inspire and motivate people with my writing.