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Car Insurance Cover- Know More

Are you one of the many people out there who feel car insurance is simply a compulsion rather than a necessity? I know many of us generally neglect the purchase of new motor insurance or renewal of the old one because we live with a misconception “Nothing will happen to me, I am the best driver”. In order to varnish any such fallacy, let’s gather some details about the types of cover and its elements.

Just the way timely service of a car ensures longevity, timely purchase or renewal of car insurance guarantees financial protection. Motor insurance covers your vehicle against various threats which might occur while travelling on the road in addition to accident suffered by driver or the passenger. Understanding what is covered and not covered in car insurance will help you make a wiser choice while purchase.

What is covered?
Damages due to Natural Disasters :- Natural disasters are uncontrollable circumstances which can occur at any moment without any prior notifications. Earthquake, flood, storm, cyclone, hurricane, hailstorm, tornado, landslides and frost are the natural disasters which can cause severe damage to your vehicle. Under a comprehensive cover, the insurer provides cover against any such hazard. For instance, if you are living in an earthquake prone area and your car damages due to the earthquake shock then the insurance company will provide you cover for the loss. 

Fire and Related Threats :- Fire, Explosion, Self- Ignition, Lightning are some of the factors which cause substantial damage to your vehicle externally and internally. Above stated factors can even destroy your vehicle totally with no hopes for replacement. The insurance company will pay you for the losses or for the replacement and repairing of possible parts. Many insurers also lay specific terms and conditions on how the incident took place in order to define the claim amount payable to the customer.

Act of people :- There are times when your precious princess might suffer loss because of damage caused due to someone else. The loss could be of any type because of the following factors – theft/ burglary, malicious act, terrorism act, riot and strike. Somebody might malevolently break your car by beating it hard or steal some parts of your vehicle. In such a case, the comprehensive insurance would pay for the losses. If the parts stolen are covered under the policy then you would be reimbursed for the same.

Other Circumstances :- In addition to the above circumstances, in case your car meets an accident then the losses would be paid by the insurance company. Also, if your vehicle has caused damage to any third party property or person then the liability cover (or the third party insurance) would take care of the same. Third party insurance covers damage caused to government property, any person or his vehicle and bird or animal. 

What is not covered?

Motor insurance policy covers liability and collision but there are a few contingencies which are excluded from the policy. It is necessary to know the exclusions as these can restrict us from committing mistakes on road, apart from the unavoidable circumstances–

  • An individual can not file a claim if he/ she is not having a valid driving license
  • Breakdown or accident caused under the influence of liquor/ drug would not be entertained under motor insurance
  • If there is some electrical or mechanical breakdown, then motor insurance cover would not be provided for the same. 
  • War peril and vehicle used in unlawful activities is excluded from the policy
  • Beyond geographical area, any accident or breakage will not be covered under insurance policy

Motor insurance is a safety helmet protecting you from financial or legal problems that could arise during an accident. From protection jazzy music system to the crucial road side assistance, a car insurance policy stores a lot in its magic box. However, an average policy can be bucketed in 3 large categories.

Types of cover-

Third party/ Liability cover :- This cover takes care of the vehicle’s damage and injury caused to the other party when you are at-fault in an accident. It does not provide any cover to the insured or his vehicle. E.g. your car hits a two –wheeler driver, then the losses incurred by the two-wheeler driver will be reimbursed under the third party insurance. It is generally preferred by NRIs and people with really old cars. 

Comprehensive cover :– Comprehensive cover provides a breadth of benefits. Unlike liability cover it offers coverage to the other party along with the policyholder. Under this cover one can safeguard his vehicle internally and externally. It will reimburse for all losses, irrespective of how and by whom the accident occurred.

Personal accident cover :- Personal accident cover is an add-on which is good to stay with you as it takes care of the injuries you suffer during any accident. The list offers compensation during the demise of the insured, permanent disablement and loss of limb or eyes. I may sound cliché, but driving smartly and safely can offer you the best cover. Not just lesser accidents but you can also stay benefited with the NCB (no claim bonus) retention.

Roads are not safe and your vehicle is always under various perils. Motor insurance cover offers protection against the following threats keeping your pockets happy and cars smiling.