What is Motor Insurance?
Motor Insurance is a vehicle insurance policy for vehicles like Cars, Bikes, Scooters, Trucks, Taxis, Buses, etc. As per Motor Vehicles Act, 1988, Motor insurance is mandatory. This policy provides financial protection against physical damage or theft or third-party liabilities or other kinds of damages that could arise from an accident or incident.
What are the Types of Motor Insurance in India?
Motor insurance can be classified into the following categories based on the type of vehicle and its usage. The terms & conditions and premium may vary accordingly.
Private Car Insurance Policy
This is a type of motor insurance policy that covers a car used for private or personal use. The policy provides financial coverage against fire, theft, natural calamities, accident, riots, etc. and also covers personal accident & Third-party liability.
Two-Wheeler Insurance Policy
This insurance policy covers two-wheelers like a scooter, bike and other two wheelers. The policy provides financial coverage against fire, theft, natural calamities, accident, riots, etc. and also covers personal accident & Third-party liability.
Commercial Vehicle Insurance
The Commercial Vehicle Insurance is coverage for vehicles that are used for commercial purposes and not for private or personal use. This includes but is not limited to trucks, buses, heavy commercial vehicles, light commercial vehicles, multi-utility vehicles, agricultural vehicles, taxis, ambulances and auto-rickshaws. The policy provides financial coverage against fire, theft, natural calamities, accident, riots, etc. and also covers personal accident & Third-party liability.
What are the Types of Motor Insurance Policies in India?
Third-party liability insurance
Called as Liability Only Policy or earlier called as Act Only Liability Policy. This type of insurance policy is mandated by law for all motor vehicles plying on the roads. This insurance provides cover to third-party liability for damages to property of third party as well as for bodily injuries or death of persons.Third-party liability insurance only covers minimal risks as required and is compulsory as per law and it does not protect the policyholder from damage or theft of the insured vehicle.
Comprehensive motor insurance
It is often referred to as a package policy, as it includes third-party liability cover and the expenses incurred by the policyholder in the event of damage or theft of the insured vehicle. The comprehensive insurance policy can be enhanced through add-on covers that offer extended benefits
Standalone Own Damage insurance
It provides protection in the event of damage, accident or theft of the insured vehicle. It does not provide cover to third-party liability for damages to property of third party as well as for bodily injuries. The insurance policy can be enhanced through add-on covers that offer extended benefits.
What are the Motor Insurance Policy Add‑ons?
It is also referred as nil depreciation cover or bumper to bumper policy. It offers full claim on the value of parts replaced due to accident without any deduction for depreciation.
Engine Protection Cover
It will cover the consequential damage to the internal parts of the engine arising out of water ingression or out of leakage of lubricating oil due to an accident.
The roadside assistance add-on provides assistance in case the vehicle breaks down in transit. The add-on provides the necessary assistance, be it repairs like battery breakdown, minor repairs, flat tyre, towing the vehicle to a service station, and others.
Components that are used in a vehicle such as nuts and bolts, screen washers, engine oil, etc. are collectively referred to as consumables. The insurance company does not bear the cost of these components at the time of a claim, with this add-on cover customer will receive coverage for consumables.
Return to Invoice Cove
In case of a Total Loss / Constructive Total Loss or Theft it covers the gap between the Insured Declared Value and the Invoice Value for purchasing a new vehicle of same make & model along with the registration and other applicable taxes.
Tyre Protect Cover
This cover provides financial protection for repair or replacement of the tyres. In case of any accidental damage, cuts or loss to the tyres.
Why Do You Need a Motor Insurance?
As per Motor Vehicles Act, 1988, Motor insurance is mandatory. Further, it protects the owner of the vehicle against damages to the vehicle and also pays for any liabilities owed by the vehicle owner as per law
What are the Numerous Advantages of Motor Insurance in India?
As mandate by Motor Vehicle Act, 1988. Third Party insurance is compulsory for any vehicle on Indian roads. However, it is advisable to purchase a comprehensive cover.
The benefits of purchasing a motor insurance policy are as follows:
The damages to the vehicle due to the following perils are usually covered under Own Damage (OD) section of the Motor Insurance policy:
- Fire, Explosion, Self- Ignition, Lightning
- Riot & Strike
- Flood, storm, cyclone, hurricane, tempest, inundation, hailstorm, frost
- Accidental external means
- Malicious Act
- While in Transit by Rail / Road, Inland waterways, Lift, Elevator or Air
- Land slide / Rock slide
This insurance provides cover to third-party liability for damages to property of third party as well as for bodily injuries or death of persons.
Customer is eligible for this benefit for every claim-free year. Additional discount as per Indian Motor Tariff is offered on renewals.
It provides protection against permanent total disability and death due to an accident.
As it is mandated by law, not having motor insurance is a violation of traffic laws and is a punishable offence. Therefore, it is important to have a motor insurance policy.