How Does Car Insurance Work?
Car insurance works on a simple principle. The insurer protects the car against accidents, theft, fire, natural disasters or third-party liabilities once a claim is filed. The insurer then evaluates the damage, verifies the documents, and settles the claim based on the policy type, coverage limits, and deductibles. This reduces out-of-pocket expenses, as the insurance company bears the cost to accordance with the policy terms.
What Does Car Insurance Cover?
Car insurance covers the following damages and losses:
- All third-party, person and property damage is covered
- Damages caused by road accidents and collisions
- Death, injury, or permanent/partial disability of the owner-driver
- Damages or losses incurred due to fire, explosion, or self-ignition
- Damages caused by natural disasters, such as floods, earthquakes, landslides, cyclones, etc.
- Any damage incurred due to man-made disasters, such as terrorism, vandalism, riots, etc.
What Does Car Insurance Not Cover?
The following scenarios and losses are not covered under a car insurance policy:
- Damages caused when driving under the influence of alcohol or toxic substances
- Damages incurred when driving without a valid driver's licence
- Damages due to normal wear and tear of the insured vehicle
- Any damage caused due to mechanical or electrical failures
- Damages due to war-like situations or nuclear perils
- Damages occurred when driving with an expired vehicle insurance policy
Why is Car Insurance Important?
Car insurance not only protects you from financial or legal liabilities arising from third-party accidents, but a comprehensive car insurance policy also covers damages and injuries sustained by the insured vehicle and the owner-driver. Here are some of the common reasons to understand the importance of car insurance:
- Legal Mandate: According to the Motor Vehicles Act, 1988, it is mandatory for all vehicle owners to have at least third-party insurance to legally operate on Indian roads.
- Comprehensive Coverage: It offers an extensive coverage against several risks. The right type of insurance covers third-party damages and also damages caused to the insured vehicle.
- Financial Protection: Accidents can lead to expensive repairs and replacement. Car insurance covers these costs and helps in reducing any out-of-pocket expenses.
- Peace of Mind: Since your vehicle is fully covered and protected from unexpected emergencies, a motor insurance policy provides significant peace of mind while you are driving.
What are the Different Types of Car Insurance?
Insurance companies offer several types of car insurance. Here are some of the common types of car insurance plans:
| Type |
Description |
| Third-party Insurance/Liability-only Policy |
This is the most basic form of car insurance policy and only covers third-party liabilities |
| Standalone Own Damage (OD) Insurance |
You can purchase this car insurance with a valid liability-only policy to cover damages caused to the insured vehicle |
| Comprehensive Car Insurance |
This type of insurance provides extended coverage and covers both third-party liabilities and damages incurred by the insured vehicle as well |
How to Buy Car Insurance Online?
You can easily buy car insurance online in just a few minutes using the steps mentioned below:
- Step 1: Go to Policybazaar.com and select 'Car Insurance.'
- Step 2: Enter your car's registration number and fill out the form with all the required details.
- Step 3: Submit the form, and all the available plans will be displayed.
- Step 4: Select the add-ons, NCB, and IDV, and choose the one that fits your coverage needs and budget.
- Step 5: Check all the details and pay the premium amount via credit card, net banking, or UPI.
- Step 6: Once the payment is successful, your car insurance will be emailed to you instantly.
