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| September 28, 2021

Different Types of Vehicle Insurance in India


Vehicle insurance is one of the most important aspects of owning a car in India. It is mandatory for any car owner to insure their car, as per the guidelines of the Motor Vehicles Act of India. There are numerous vehicle insurance companies in India that offer various types of policies, which has made it easier for people to buy vehicle insurance online. However, the abundance of choice and a lack of understanding makes it a bit confusing to be able to choose the right insurance policy for your car. Buying the first vehicle insurance policy you see is never the best idea, as due research can help you save a lot of money while ensuring you find the most suitable policy for your requirements. There will be a different policy when you get vehicle insurance for a new car and a different one for a used car, and a completely different one for a commercial vehicle, but that is not all.

As important as it is to thoroughly understand what is covered under your vehicle insurance policy, you cannot ignore what comes under its exclusions. It is also very important to compare various policies by different companies to ensure you choose the most suitable insurance. But before choosing the right policy, it is important to understand the different types of vehicle insurance available in India today:

Third-Party Vehicle Insurance

Under the Motor Vehicles Act, third-party vehicle insurance is the minimum coverage any car plying on Indian roads is supposed to have. This type of policy is also known as a liability only insurance and provides coverage against any liability you incur in an accident that harms or damages a third-party or third-party property. It covers:

  • Third-party injury, death, or damage to third-party property

  • Medical bills of third-party due to hospitalisation or for treatment

  • Repair or replacement costs of damaged third-party property

These types of vehicle insurance do not provide coverage for any damage that is incurred by your vehicle in case of a collision or accident.

Comprehensive Motor Vehicle Insurance

As the name suggests, this is a kind of vehicle insurance policy that provides a wide range of coverage. It provides protection against all kinds of risk factors that are associated with your vehicle as well as third-party vehicles, property, drivers, etc. It provides coverage against natural as well as man-made calamities like floods, riots, fire, earthquakes, theft, and much more.

  • It covers various aspects, even outside the purview of an accident

  • Includes a liability cover against third-party injury, death, or damage

  • Damage caused to your own vehicle by man-made and natural disasters is covered

  • Most comprehensive insurance plan one can get

  • This is the vehicle insurance that new cars come with

  • You can opt for additional riders to further enhance the coverage

  • Offers complete protection for your vehicle

Extra Coverage

Apart from these basic categories of motor vehicle insurance, several add-ons or riders are also available to help you further enhance the coverage offered by your insurance policy. When you buy your vehicle insurance online, you can also check out the various extra coverage options available to choose an insurance policy that best suits your needs. Some of the top coverage options that you can select include:

Collision Coverage Vehicle Insurance

This type of vehicle insurance includes a third-party cover by default, but also includes collision coverage for your vehicle. This means that if your vehicle is damaged in a collision, your vehicle insurance companies will bear the cost of repair, up to a certain limit. Here are the main features of this kind of insurance policy:

If costs of repairs exceed the market value of the car (Insured Declared Value), the insurer will pay the IDV as listed under the policy.

Collision coverage varies with the age of the car. For a very old car, you can avoid taking a collision cover if the market value of the car is low.

Personal Accident Coverage

Apart from the mandatory third-party vehicle insurance policy, you can include add-on coverage in order to overcome various risk factors. The personal accident coverage provides coverage for all personal injury costs associated with the accident.

  • Medical bills of driver and passengers are covered by the personal injury protection

  • The insurer pays the medical bills regardless of whose fault it was

Uninsured Motorist Protection

Even though motor vehicle insurance is mandatory, there are numerous uninsured cars running on Indian roads. In a situation where your vehicle is hit by another vehicle that is not covered by a motor vehicle insurance policy, you will be required to pay the repair costs of your vehicle from your own pocket. This is also the case when the other person’s third-party insurance coverage is not enough to cover the damage caused to your vehicle. In such cases, having uninsured or underinsured protection minimizes your risk exposure as your insurance company will pay the total (or additional) amount required to overcome the repair or medical bills.

The importance of car insurance is undeniable and having the right vehicle insurance is essential. At Muthoot Insurance Brokers, we provide the best insurance quotes at attractive interest rates so that you drive a greater peace of mind.

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