Popular Inclusions and Exclusions in a Motor Insurance Policy
Apart from being a mandatory purchase, a motor insurance policy is an essential tool to cover a vehicle owner against an unfortunate incident on road. However, before purchasing one, you should be well aware of what a motor insurance policy covers and what it excludes. Know more about popular inclusions and exclusions in a motor insurance policy so that you do not end up paying a heavy premium without getting maximum coverage.
Above-mentioned prices are for a 7-year-old Maruti WAGON R AVANCE LXI (998 CC) registered in Gurgaon and 15 days before expiry of previous policy
Types of Motor Insurance Coverage
A vehicle owner can purchase a car insurance policy from an insurance company directly or through an insurance aggregator platform like Policybazaar.com. Irrespective of the insurance vendor, motor insurance in India includes two major types of coverage. These include:
Third-Party Insurance Cover
Third-party insurance is a mandatory insurance cover that every car owner must have in India. It covers the policyholder's legal liabilities for causing a third party's injury, death or damages to the third party’s property or vehicle by the insured car during an accident. It also provides personal accident cover to the car’s owner-driver.
You must know that this type of insurance cover does not provide financial assistance against any damages caused to your own car.
Comprehensive Insurance Cover
Comprehensive insurance policy covers car owners against the theft, loss or damages sustained by the insured car due to unexpected situations, such as fire, accidents, calamities, etc. It also covers any third-party property damages, injury and death that may arise during a road accident. Moreover, you will also get personal accident cover for the owner-driver of the car under this policy.
Thus, comprehensive insurance covers both a car owner's liability towards the insured vehicle and third-party.
Inclusions & Exclusions in a Motor Insurance Cover
A motor policy inclusions refer to the risks that are covered in a car insurance policy. On the other hand, policy exclusions are the risks that are not covered in a car insurance policy. Here are some popular inclusions and exclusions in a motor insurance policy:
Inclusions of Motor Insurance:
Third-Party Bodily Injuries
Vehicle insurance covers bodily injuries of a third party person if caused by the insured car in a road accident. It also provides compensation to the third party in case the accident leads to disability.
The death of a third party caused by a road accident involving the insured car is covered under the insurance policy. The compensation amount is ascertained by the Motor Accidents Claims Tribunal.
Third-Party Property Damages
Third-party property damages including the third party’s vehicle are covered under the motor policy. Car insurance plans in India covers third party property damages of up to Rs 7.5 lakh.
Comprehensive insurance provides coverage in case any natural calamity, such as landslides, lightning, cyclones or floods, etc. causes damages to the insured car.
Damages caused to the insured car due to manmade disasters, such as riots, vandalism, strikes, etc. are also covered in a comprehensive insurance policy.
Vehicle theft is a common inclusion of motor insurance cover. In case an insured vehicle is stolen, the resultant loss will be covered under the comprehensive insurance policy. The insurance company will compensate an amount equal to the stolen car’s IDV or current monetary value in case it is not recovered.
Personal Accident Cover
A personal accident cover provides financial assistance in the event of the owner-driver’s death, bodily injuries, impairment or mutilation from an accident involving the insured car. This cover of Rs 15 lakh is mandatorily granted as part of the comprehensive policy as well as the third-party liability-only policy.
Car insurance policy also cover damages sustained by the insured car due to fire, explosion, and self-ignition.
In case the insured car gets damaged in a road accident, the resultant loss or damages will be covered by the insurance company under the motor policy.
Exclusions of Motor Insurance:
Damage Under Intoxication
Drunk driving is a popular exclusion of motor insurance. If the insured vehicle is damaged in a road accident while the driver had consumed alcohol or any other intoxicating substance, then the insurance company will not pay for the incurred damages.
Driving Without a Valid Driving License
If a car sustains damages while it was being driven without a valid driving license, then the insurance company will not provide financial cover against such damages.
Claim on a Lapsed Policy
A motor policy is a contract that has to be renewed yearly, except for new cars. When the policy is not renewed before the due date, it expires and can also lapse. In the case of a lapsed/expired insurance policy, the car owner cannot claim any financial aid from the insurance company.
Damage Outside India
Any accidental damage or loss sustained by the insured car outside India will not be covered by the insurance company. Thus, if a vehicle owner is driving outside India, he/she will lose his/her right to claim damage repair expenses under the policy.
Wear and Tear
An insurance policy is unlikely to cover wear and tear that has occurred to the vehicle over time. Insurance companies only cover unexpected losses and not something caused by gradual deterioration or everyday use.
Mechanical or electrical breakdown of a vehicle is also not covered under a standard motor policy.
Similarly, consequential losses (such as damages due to towing of the car in a road accident), which are a result of a certain action by the car owner or third party, also come under exclusions of motor insurance.
Tyres and Tubes
Damage to the tyres and tubes of the insured car is only covered when the vehicle has met with an accident.
Add-on Covers Available in Motor Insurance
The coverage of a motor insurance policy can be extended by purchasing certain add-on covers. However, buying an add-on will also increase the premium of the insurance policy. Some of these common car insurance add-ons include:
- Zero depreciation cover
- Return to invoice cover
- Engine protection cover
- Tyre protection cover
- Passenger cover
- Consumables cover
Whenever you purchase insurance for your vehicle, make sure you have gone through the policy documents carefully. Understand all the inclusions and exclusions so that you do not face any trouble while claiming your vehicle’s insurance policy.
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Note: This is your car’s recommended IDV as per IRDAI’s depreciation guidelines.asdfsad However, insurance companies allow you to modify this IDV within a certain range (this range varies from insurer to insurer). Higher the IDV, higher the premium you pay.
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