What is Car Insurance? | Types & Benefits

Car insurance, often known as four-wheeler insurance, is a contract between a car owner and an insurance provider that protects four-wheelers from financial losses caused by unanticipated events such as accidents and natural disasters. This contract is frequently misunderstood as a piece of paper to be kept in the car’s dashboard and only taken out if the traffic cops ever ask for paperwork. But wait, there’s more! This paper covers the cost of repairing or replacing your four-wheeler in the event of an accident. When you’re on the road, no matter how cautious you are, there’s a chance you’ll get into an accident and have to pay costly repair fees.

Why do you require a Car Insurance?

Car insurance for third parties is mandatory – All vehicles operating on Indian roads must be insured, according to the Motor Vehicles Act of India. You must obtain third-party liability coverage as a car owner.

It protects you from paying a traffic fine – Driving without car insurance is punishable by a Rs.2,000 traffic punishment under the new Motor Vehicle Act 2019A. If you are caught a second time, you will be fined Rs 4,000.

Provides coverage for the owner driver in the event of a personal accident- The automobile insurance policy covers injuries to the registered owner driver while travelling in the car or getting in or out of it for a total of Rs. 15 lakh.

Covers vehicle damage- The automobile insurance policy covers any damage to your vehicle caused by accidents or natural disasters, as well as the price of repairs.

It protects your car from being stolen- If your automobile is stolen and not recovered, the policy will compensate you for your loss.

What are the different types of car insurances?

Third party cover: In the event of an accident, the policy guarantees to compensate exclusively for the damages caused to a third party.

Comprehensive coverage: The policy provides comprehensive coverage against damages. It covers damage to you and your vehicle, as well as damage to a third party and their vehicle, if any.

Accident coverage: In the event of a collision, the policy solely covers financial losses to your car.

What are included in the Car Insurance Policy?

The Car Insurance Policy includes the following:

Legal safeguards

1. Accident insurance protects you from unanticipated financial losses if your car is involved in an accident.
2. Coverage for damage to a third party caused by an injury or a loss of property.
3. Theft, self-ignition, explosion, fire, strikes, rioting, terrorism, and natural disasters are all covered.

Coverage for personal injuries

1. Optional extra benefits that you obtain by having riders Ability to maintain the value of your car
2. an continue with the plan even after leaving the group (conditions apply)

What are the additional benefits?

The policy provides you with the following additional benefits with a nominal charge: –

Zero Depreciation: – In the event of an accident, this rider will assist you in receiving the entire value of the damaged part as payment. Depreciation is generally applied to parts of your car under a normal auto insurance policy. When you file a claim, the insurance company subtracts the depreciation value from the claim before paying it out, which is only relevant to cars that are 2 to 5 years old. When you purchase a zero depreciation add-on, no depreciation is taken into account, and the full value of the damaged part is replaced.

Engine Protect: – Motor insurance is designed to cover damage that occurs as a result of an accident, but not in other situations. When you get an engine protect rider, you ensure that your car’s engine is covered even if there is no accident. The cost of repairing the engine can burn a hole in your wallet. If you have a new automobile or live in a city where engine losses are possible due to bad weather or other factors, picking the rider can help you save money.

Return to invoice: – If your automobile is totalled due to theft or another reason, this added benefit assures you obtain the value you paid to get it on the road. That is, in addition to the basic IDV of your car, you will be reimbursed for registration fees and road tax. The insurance provider evaluates the amount if a similar model of car is offered at a lesser price.

NCB Protect: – If you have not made any claims in the preceding financial year, you will get a no-claim bonus. However, after you’ve filed a claim, you’re no longer eligible for NCB. In the event that no claim is made, a bonus of 20% is applied to the premium amount. If no claim is made in consecutive years, the bonus continues to accrue, but the maximum amount is limited to 50%. Even if you have filed a claim, this rider protects your NCB.

Other riders, including as roadside assistance, passenger accident coverage, key replacement compensation, and so on, are available in addition to the ones described above. You must determine which rider will be of use to you in your particular situation.