A lot of money goes in purchasing a car and a lot of parameters are considered before deciding the one that you buy. With car loans and installments, it has become easier to purchase a car but we all know that maintaining a car is not a cake walk.
For owning a car in our country, it is mandatory to have car insurance in place. It is not only a legal requirement, but it is a safety measure that provides coverage against loss or damage that is caused to you and your vehicle.
If you have an adequate car insurance plan in place, it will protect you from any such emergencies and eventualities on road. To have car insurance in India, you need to hold a valid driving license of the India and the car needs to be legally registered.
But before you buy a car insurance plan, here are 5 interesting facts that you must know –
1. Coverage Provided in a Car Insurance Policy
There are different motor insurance companies in India, and the coverage and car insurance prices may differ from one insurer to another. Car insurance offers coverages against the risks as mentioned below-
- Bodily injury arising due to an accident while driving
- Any loss or damage caused to any third party or property by the insured car
- If there is any need for an emergency medical help in the middle of the road
- In case the car breaks down in the middle of the road
- Physical damage caused to the insured car due to a collision on the road
- Roadside assistance to help you out of an emergency situation
2. The Different Types of Motor Insurance Plans
Car insurance coverage is broadly divided into two categories as mentioned below –
a) Comprehensive Car Insurance Cover
If you want to avail most of the benefits of your car insurance scheme, then it is advisable to buy a comprehensive motor insurance plan. It offers you and your car coverage against any accident, and loss or damage arising due to fire, explosion, natural disasters, and vandalism.
It provides third-party liability cover against any death or injury caused to a third-party by your vehicle. It also covers any loss or damage caused to your own car or property during the accident.
There are various other benefits that you can get with roadside assistance – including towing assistance, agency repair, car refueling etc.
Before zeroing down on your comprehensive car insurance policy, it is suggested to go through all the terms and conditions in the fine print. For instance the service provided by Tata AIG Motor Insurance will be different from ICICI Lombard and the likewise. Since vehicle insurance policies may differ, you need to check the benefits in terms of –
- Geographical coverage (advisable to have GCC cover, if you drive to neighboring GCC countries and Oman insurance cover)
- Emergency medical help in case of accidental injuries
- Agency repairs or repairing service in registered garages
- Benefits provided to drivers and passengers (including employees)
- Temporary car replacement service
- A no-claim discount on policy renewal
- Benefits that are provided under roadside assistance
- And if the policy includes off-road driving for 4WD vehicles or not?
b) Third-Party Car Insurance
A motor insurance scheme is between two parties – the insured and the insurer.
A third-party is any person or property, apart from the insurer and the insured. A third-party can be anyone – a pedestrian, a public transport bus or passengers, driver of another vehicle, or any animal for that matter.
It is the most basic and compulsory form of motor insurance as per the India law. It covers you from any legal liability or any form of compensation that you may need to pay (the insured); for any loss or damage, which is caused by your (the insured) vehicle.
- It includes loss or damage caused to the third-party due to accidental fire or theft.
- It also covers legal liabilities arising due to death or injury caused to any third party from your end.
In any of the above-mentioned situations, the insurance company shall compensate the loss on your behalf (the policy owner)
3. The Add-on Benefits of Having a Car Insurance Policy
Following services are provided to the insured person and vehicle on payment of an additional premium-
- Repairing Assistance – In case the vehicle breaks down in the middle of the road, the insurer will provide immediate on-site repair support. Any vehicle breaking down on city roads or streets shall be given assistance, in case it is immovable and cannot be dragged to the closest repairing center. The fees charged by the mechanic will be included (cost of the replacement parts will not be covered).
- Vehicle Towing Assistance – In case of an accident, the insured vehicle is towed to the closest workshop. It will only cover towing expenses; any cost of repair further to this is usually not covered in it. Though, it is subjective to the insurance provider in some cases.
- Removal and Extraction of Vehicle – In case of breakdown of the insured vehicle, the insurance provider will provide crane assistance for removal and extraction of the vehicle from the area of damage.
- Refilling – If the car runs out of fuel during the journey and there is no petrol pump nearby, and if you have car insurance, you will get fuel assistance from your insurance company. All you need to do is to just pay for the cost of the fuel.
- Dead Battery – Imagine if your car’s battery runs down in the middle of the road and there is no help available to you. This is where car insurance comes handy. Your insurer will provide help to jump-start the engine. After that, you can easily take your car to the nearest garage and get it repaired.
- Car Unlocking Support – It can ruin a good day for anyone. At this time, when your keys are left inside the car, immediate roadside assistance will be provided to help you unlock the car. It will save a lot of time and will help you to carry on with your journey.
- Agency Repairs – If you have car insurance and agency repair is included in your motor insurance plan, then you can avail it at the time of emergency (accidental damage while driving on road). Your car will be then repaired at the manufacturer’s authorized workshop. And if an agency repair is not provided, then your car gets repaired at one of the registered workshops of the insurance provider.
- Assistance for Flat Tyres – If the tyres of your go flat while driving or there is some leakage, then assistance will be provided to remove or replace the tyres (provided the tool-kit is available in your car).
You will not be charged for any labor charges. Though, it is only applicable when the incidence takes place on road and not at your place of residence or anywhere else.
- Emergency Vehicle Transportation Assistance – Moreover, if the car meets with an accident or breaks down in the middle of the road and it needs to be immobilized or go for repairing work for more than 3 days, then transportation assistance is provided to help you travel back home.
In this case, the insurance company will bear either of the expenses –
- The cost of transportation incurred while transporting you and your vehicle back to your place of residence
- Or the cost of travel that goes in getting your car back to your home or residence
4. You Can Avail No Claim Discount
As per the recent rules and regulation in the India, all those who have a safe driving record or have a clean claim history, can avail up to 20% discount will renewing their car insurance in India.
5. What is Not Covered by Motor Insurance?
The insurer will not bear the cost of the following –
- Any depreciation of the insured vehicle
- Normal wear and tear on the vehicle
- Any kind of electrical or mechanical failure
- Damage to tyres ( if not accidental)
- Damages or accident taking place under the influence of drugs or alcohol
Over to you
So, the next time when you are planning to buy a car and a car insurance plan, these points can help you decide which plan is better. Moreover, you can buy a plan that meets most of your concerns in an effective manner.