Types of Motor Insurance Policies in India



Third-party insurance

This is the foremost basic sort of automobile insurance and hence, it’s also the most cost effective . This insurance scheme is additionally mentioned as liability-only insurance or act-only plan. The automobiles Act, 1988, mandates that each one car owners are in possession of this policy for the protection of their vehicles. just in case you drive a car without a minimum of third-party insurance cover, you’re susceptible to face penalties.

The coverage offered by this insurance plan includes protection to a 3rd party for incidents like injuries/death and property damage caused in an accident involving the insured vehicle.

It should be noted that the third-party insurance cover doesn’t offer own-damage cover, i.e., coverage for the insured vehicle or the owner-driver.

Some insurance companies offer a private accident protect the owner-driver along side the third-party insurance plan.

Although there’s no upper limit on the quantity a 3rd party can receive as compensation for death/disabilities, there’s a cap of Rs.7.5 lakh on the utmost amount offered for third-party property damages. However, the ultimate claim amount is set by the court.

Comprehensive motor insurance

Often mentioned as a package policy by some insurers, this plan provides more exhaustive insurance protection, because it encompasses third-party liability coverage and own-damage cover. The detailed coverage of the great motor insurance plan is as described below:

Own-damage cover –

This includes protection for the insured vehicle from the subsequent events:

Accidental damages

Damages while in transit via rail, road, waterways, lift, etc.

Damages caused by natural calamities, like earthquakes, floods, hurricanes, etc.

Damages from man-made disasters like strikes, riots, vandalism, etc.

Theft of the insured vehicle

Third-party liability cover

This a part of the great motor policy protects the policyholder from legal liabilities to a 3rd party from accidental injuries/death or property damage. the utmost amount of coverage under this insurance for injuries/death is unlimited. However, there’s a cap of Rs.7.5 lakh on coverage for third-party property damage. the ultimate claim payout for property damage is set by the court.

Motor insurance add-on plans

Apart from the great and third-party insurance plans detailed above, most motor insurance companies also offer add-on covers which will enhance the coverage of the bottom policy. These riders should be purchased from an equivalent insurance provider by paying a further amount. a number of these add-on plans are as described below:

Zero depreciation cover

this is often a well-liked motor insurance add-on plan that gives significant savings at the time of a claim. it’s also mentioned as nil depreciation cover or bumper to bumper policy. Consider that your vehicle is insured with a comprehensive motor policy . At the time of a claim, you’ll still need to bear the expenses concerning depreciation of the vehicle parts and excesses. However, if your comprehensive motor insurance plan was reinforced with a zero depreciation cover, the insurer would bear the expenses for the depreciation of auto parts.

Engine protect cover

A comprehensive motor insurance plan doesn’t protect the vehicle from mechanical or electrical damages to the engine. Buying an engine protect cover offers your engine the much-needed protection, especially if you reside in a neighborhood susceptible to waterlogging.

Return to Invoice (RTI) cover

This add-on plan protects your vehicle from total loss expenses. within the event of a complete loss scenario like a car theft, it provides you the particular invoice value of the vehicle, without accounting for its depreciation with age.

Loss of private belongings cover

Loss of pricy electronic equipments, laptops, etc. kept within the insured vehicle is obtainable coverage under this add-on insurance plan.

No Claim Bonus (NCB) protect cover

No Claim Bonus may be a significant bonus offered by insurers to drivers who refrain from raising motor insurance claims during a policy year. you’ll preserve this bonus even after raising a claim if your vehicle insurance has an NCB protect cover.

Personal accident protect the passengers

the great automobile insurance policy are often enhanced to supply protection for the passengers by choosing this rider.

Key replacement cover

Under this cover, the insurance firm reimburses the value of replacement of the vehicle keys if these were lost or misplaced.

Roadside assistance cover

This add-on cover offers 24/7 protection to the policyholder from incidents like flat tyre, fuel depletion, requirement for expert scrutiny, etc.

Consumables cover

Components that are utilized in a vehicle like nuts and bolts, screen washers, engine oil, etc. are collectively mentioned as consumables. The insurance firm doesn’t bear the value of those components at the time of a claim. However, if your vehicle insurance was equipped with this rider, you’ll receive coverage for consumables.

Daily allowance cover

This add-on cover offers reimbursement for the expenses involved in hiring an alternate vehicle when the insured automobile is undergoing repairs at a garage.

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