Car Insurance April 1, 2020

Car insurance policies in India, are a mandatory requirement by law. There are two kinds of car insurance policies sold in the Indian insurance market. The difference between the two available policies is based on the premium payable and the coverage provided. These plans are- Comprehensive Insurance plan and Third-party plan. More about these plans has been discussed below. 

To understand better on how to choose a suitable car insurance plan it is important to recognize several key factors that come into play regarding it. Factors like the value of the car, coverage, other expenses etc. Furthermore, the biggest factor is whether to opt for a comprehensive plan or third-party plan. While the cover for third-party plans are cheaper than comprehensive plans, their coverage, however, is narrower than comprehensive plan. Let us know more!

Car Insurance and its types-

As we know, there are two types of car insurance plans – Third-Party and Comprehensive plans. Third-Party plan with cheaper premiums only cover for third-party damages (damage to third-party due to an accident caused by you) whereas a comprehensive cover, comparatively expensive, covers for all kinds of losses associated. 

Third-Party plan, also known as the Third-Party Liability insurance, is the minimum level of car insurance required but is in no comparison to a comprehensive plan’s features. This is why most recommend and advise a policyholder to be in possession of a comprehensive car plan as it not only covers third-party liabilities but also provides extensive protection to the vehicle and its owner. It means that personal damages are only covered by Comprehensive Plans. 

Benefits of Comprehensive Car Insurance Plans-

A comprehensive plan is considered the highest level protection that can be given to one’s car. This is so believed because of the extensive security provided under this policy type that covers all incurred expenses associated with a car. 

  1.  When vehicles are equipped with comprehensive coverage, the policyholder can claim for accidents occurring due to their fault from the insuring company, as personal losses and damages are covered under this plan. 
  2. In case of inconclusive cause of accidents wherein the fault of an accident is not proven, a comprehensive insurance protects the owner and the vehicle from incurring losses. Let’s take a scenario of a hit-and-run case wherein the cause of accident or damage to the vehicle cannot be proven, compensation can still be claimed from the insuring company for the same. On the other hand, in the absence of a comprehensive car plan the owner would have to pay for the damages themselves. 
  3. Comprehensive car insurance plan also covers for stolen vehicles wherein the claim for compensation can be made with proper documents duly submitted to the insuring company. 
  4. Additionally, comprehensive car insurance plans by insurance company eases the policyholder’s mind by taking care of any expensive repair work that’s to be done on the vehicle post-accident. However, the policyholder will be expected to pay the deductibles and voluntary excess, in case chosen, while claiming for the same. 
  5. Moreover, this policy also covers Lawsuits as a result of an accident and related legal fees. Lastly, it also provides financial aid if your car is written off. 

Coverage of Comprehensive Insurance Policies-

Among the inclusions of this vehicle insurance policy, the following are its salient covering factors: 

  1. Incurred expenses due to damages arising from objects falling on the vehicle or natural disasters or bad weather conditions. 
  2. Expenses from damages and destruction due to accidents caused by third party, riots due to civil disturbances and vandalism. 
  3. Additionally, losses from fire and theft are also covered for. 

Conclusion-

Comprehensive Car Insurance Policy is an ideal insurance plan to cover for yourself and your vehicle. This type of car insurance plan had a wide coverage sufficient to cover for personal damages and also has provisions for third-party damages. However, premiums payable under Comprehensive Insurance can be expensive as compared to just third-party insurance. But choosing the most suitable plan for one’s car goes beyond the premiums payable alone; therefore, considering all necessary factors and required coverage specific to you, a car insurance policy must be chosen. 

The choice between Third-party and Comprehensive car Insurance plan is usually made depending on the car’s value. For a high-end car purchasing comprehensive plan is more suitable as it provides maximum protection. Similarly, choosing a standalone third-party cover is suitable for older cars that are not in their prime condition anymore. Finally, it is also to be noted that additional covers can be purchased with a third-party liability insurance to upgrade the coverage as per choice. 

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