Mon. Oct 19th, 2020
Motor insurance

Life is such a blissful gift of God to mankind. Our relations, feelings, and emotions all depend on our life. A lot of people depend on us, care for us, love us, and get worried for us at all times. And why wouldn’t they be? The rush of life, the traffic, and the number of accidents taking place is huge in terms of the precious life we actually owe to each other. This is why Insurance is important. Insurance is to save you from such kind of tragic happenings.

But, what if you have to save your vehicle too? The vehicle’s life is important too, as we give our hard-earned earnings to procure our own vehicle and if it is not working in a proper condition or is in a bad shape due to an accident, our life savings are gone in a fraction of minutes. And we have no choice but to regret. For this, not to happen, Vehicle insurance becomes necessary for any vehicle’s owner, to protect their vehicle from unforeseen circumstances. Let us get a deeper understanding of Vehicle Insurance and its types.

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What is Motor Insurance exactly?

Motor Insurance is a mandatory insurance policy that is mandatory for all kinds of vehicles, cars, bikes, jeeps, commercial vehicles, heavy vehicles, etc. It is a compulsory insurance for your vehicle, for the safety of others and your own safety. The primary motive behind this insurance is to protect your vehicle against damage and liability to the third party.

Under which Act is it covered?

According to the Motor Vehicles Act, 1988, and Motor Vehicle Amendment Act, 2019, every vehicle owner should carry an insurance policy of their vehicle for driving legally on Indian roads. If you do not have an insurance cover for your vehicle, you can be charged with various penalties and imprisonment too, in extreme cases.

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Types of Motor Insurance in India

Private Car Insurance Policy

This insurance policy covers the private car owned by individuals and is mandatory by the Indian Government. The vehicle is covered under this policy against any accidents, theft, fire, natural disaster, any injury to the owner of the vehicle. This policy also covers third-party damages or injuries.

Two-Wheeler Insurance Policy

This insurance policy covers bikes or scooters owned by individuals and are mandatory by the Indian Government. The vehicle in this policy to is covered against any kind of theft, accidents, natural disaster, fire, or injury to the vehicle owner. This policy covers third-party damages or injuries. It provides a “personal accident cover” as well which is mandatory for owner rider and can be taken for the passenger.

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Commercial Vehicle Insurance Policy

This insurance policy covers all the vehicles that are not for personal use but for commercial use. These vehicles include buses, trucks, light commercial vehicles, heavy commercial vehicles, multi-utility vehicles, agricultural vehicles, taxis, cabs, auto-rickshaws, ambulance, etc. The vehicle is insured against accident, theft, fire, or any other natural disaster.

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What are the Types of Motor Insurance policies in India?

There are various types of insurance policies in India. Some of them are discussed here:-

Third-Party Insurance:

In this Insurance policy, the damages or injuries caused to third-party are covered, where the policyholder is accountable for the damage or accident caused. It covers only minimal amount of risk, and it does not cover his/her damages or injuries.

Comprehensive Insurance

In this Insurance policy, the damages and injuries caused to the third- party are covered, as well as the damages and an injury caused to the policyholder is also covered. It is the most valuable insurance policy that covers both parties equally and comprehensively. It provides compensation at the time of the accident or death of the owner.

Add-ons with Comprehensive Insurance:

Zero-Depreciation – The value of your vehicle depreciates or becomes less with time. This Add-on keeps your vehicle as valuable as the day you bought it. The policyholder receives full amount claimed for the replaced parts, if an accident occurs. It is available for the vehicles which are only three years old.

Engine-Protection Cover – If any damage is caused to the vehicle’s engine, this add-on keeps your vehicle protected. Some troublesome situations like leakage of the lubricating oil or water entered the engine; all is covered under this policy add-on.

Roadside Assistance – If your vehicle is not working properly in the middle of the road, this add-on will help you. The Roadside assistance will come for your vehicle wherever you are with just a call. If not, they will tow your vehicle to the closest service station.

Consumable Cover – It covers all the consumables your vehicle needs, from the day the add-on is purchased for the vehicle. The much needed engine oil, to the nuts and screws of the vehicle, all is covered in this add-on facility.

Key-replacement Cover – If you have lost your Ignition Key, don’t worry! This add-on has covered that for you. This offers reimbursement for the part of the cost of the substitute key.

Tyre-Protect Cover – It safeguards the tyre of your vehicle and covers the cost of tyre damage such as tyre-bursts, cuts, bulges, etc., so that your vehicle is protected from tyre mishaps.

Return-to-Invoice Cover – In case of any damage or theft, you get the complete value of your vehicle. The value is written in the invoice while you purchased your vehicle to the value of registering your vehicle all will be returned to you under this add-on.

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Frequently Asked Questions

Can I change my Insurance policy from Third-party to comprehensive policy?

Yes, absolutely. You can switch to the comprehensive policy from Third-party policy by getting your policy renewed.

What if I do not insure my vehicle?

The vehicle Insurance is mandatory under Motor Vehicles Act, 1988, and anyone not abiding to that can be penalized.

Can I get Add-ons in the already running policy?

No, you cannot get add-ons in the already running policy. You can get Add-ons once the policy renewal date arrives.

Does the premium changes for Third-party insurance?

No, the premium remains the same for Third-party insurance. Only if, IRDA changes its rules, then the premiums of the insurance can be altered.

By Sakshi Srivastava

I am Sakshi Srivastava. I am pursuing Masters of Commerce from Amity University, Lucknow. I have completed my Bachelors in Commerce from Amity University, Lucknow as well.