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Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, bikes, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of theft or traffic accidents and against liability that could be incurred due to an accident. Vehicle insurance also protects a vehicle from any damage that may be caused due to riots, mobs or fire. While this sort of vehicle insurance is popularly known as comprehensive insurance, this kind of cover is not mandatory in most Indian states.
However, third party vehicle insurance, also known as Liability Only policy is mandatory in India. This cover usually costs a few hundred rupees & provides an insurance claim to another vehicle or pedestrian as compensation for damage caused by this vehicle. Any vehicle on the road that does not have a third party cover is liable for a challan.
Many vehicle insurance policies also provide for a good accidental or life cover for the driver and passengers for a nominal premium. Of course it is the choice of the customer whether he wants to opt for such add-ons.
Vehicle insurance in its latest avatar has many newer versions giving a customer added advantages. Zero depreciation insurance is one such variant that offers a customer full insurance claim even on rubber parts, bumper, etc in case of damage, thereby reducing the car owners liability to nil. The premium for zero-dep insurance is about 20-30% higher, but for people likely to take frequent claims, it is well worth it.
Another variant also covers engine or gearbox damage in certain cases, though is not very popular currently. Loss of vehicle use or down time protection is yet another add-on that an individual may include in his car insurance.
As in case of all insurance, the primary purpose is to cover against any major financial loss. So be sure that before you use your car insurance for a claim, the amount involved must be well worth it. Each time you use your insurance you tend to lose out on the discount on your policy called No-Claim-Bonus and the insurer may even charge additional premium on the next renewal. So before using up your NCB, be sure that it is financially beneficial since you lose not just the NCB for the next renewal but in fact, the next few years are affected as well.
To conclude, buying a motor insurance isn’t enough. Knowing your policy well enough to maximise financial gains is as important. Take the help of our experts, we would be glad to help.
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