Car Insurance: Importance, Types and Their Benefits

What is Car Insurance?

Car Insurance is the safety measure that is taken to safeguard your car from unpredictable hazards.  It provides coverage against losses sustained such as, theft, accidents and other liabilities. Specifications such as value of the car, type of coverage, vehicle classification would determine the premium of the insurance. The insured party, insured vehicle and third parties such as some other car or person to whom the vehicle may have caused some unintentional damage, can be covered under car insurance.

What are the different types of Auto Insurance in India?

Know about the various types of Auto Insurance available in India to protect your vehicle:-

• Collision insurance: The car insurance that pays for the repair works that your damaged car undergoes after it was involved in an accident is called collision insurance.
• Comprehensive insurance: This insurance covers your car from damages caused by weather events and accidents with animals.
• Uninsured motorist insurance: The insurance that protects you and your car against uninsured drivers and hit-and-run accidents is called uninsured motorist insurance.
• Underinsured motorist insurance: If the insurance of a driver is not adequate to bear the expenses during the event of an accident, this insurance comes into play.
• Insurance to cover expenses of medical bills: This insurance pays for the expenses of medical bills and accidents which the person may have incurred.
• Rental reimbursement insurance: If your vehicle is in a bad condition after an accident and is no longer drivable, the insurance also helps to pay for the rental colour.

Importance of Motor Insurance:

It is essential to have a car insurance. When your vehicle meets with an accident, the car insurance policy takes care of the expenses thereby diminishing the sum of money that you need to pay from your pockets. You, in turn, are obliged to pay annual premiums to the auto insurance company.

Also Read: 10 Reasons Why Car Insurance Claims Get Rejected

Know about top 5 benefits of Having a Motor Insurance Policy:-

• Coverage against destruction to the insured vehicle during accident: The car insurance policy pays for the repairing expenses incurred during the event of an accident.
• Protection against damage due to man-made crisis: Adverse incidents like burglary, theft, strike, riot, terrorist activities are also covered by car insurance policy.
• Protection against natural calamities: Car insurance policy protects our car even in times of natural disasters such as flood, earthquake, hurricane, storm, typhoon, explosion, landslides and other.
• Protection against personal accidents: In the event of unfortunate circumstances resulting in permanent physical disablement or even death, car insurance policy provides security to your family’s future. It even provides coverage for any damage caused to the driver during driving, boarding or alighting from the vehicle. Accidental coverage for co-passengers is also offered by some car insurance policies. Sometimes, the insurance policy may cover other people who are not in the policy but are driving your car with your consent. However, personal auto insurance do not offer coverage from accidents occurred in the event of the usage of your car for commercial purposes or ride sharing services.
• Protection against financial liabilities caused by injury to third party: Accidental injury or death caused to third party by your vehicle can lead to huge liabilities. Car insurance policy offers coverage against such financial liabilities. It even protects you from the liabilities which may result from any unintentional damage caused to the surrounding property.

Know about 5 Important points while buying Car Insurance Policy for the first time:

Here are the 5 important points you should remember before purchase a Car Insurance Policy:-

1. You have to pay a yearly premium to avail a motor insurance policy. You will lose the premium amount you paid for protection if you do not get into any serious accident.
2. You need to fill in your details in the proposal form and submit a copy of your registration certificate to get your car insured.
3. The Insured Declared Value or IDV of your vehicle determines the maximum insured sum that the insurer can pay you. It is more or less equal to the market value of your vehicle.
4. You can compare the car insurance policies online on the basis of coverage option, claim settlement practice, amounts of premiums and deductibles and choose an insurer according to your need. You can also repair your car for free in the garage facilities offered by the insurer. If you choose to repair your car elsewhere, you can get a refund for the expenses.
5. Certain incidents such as minute wear and tear of the car, damage to engine due to oil leakage, being driven by a person without a valid driving license are not covered under the policy.