While you might be familiar with a health insurance policy, motor insurance is a similar insurance cover on those lines. The underlying for a motor insurance cover is your vehicle that is being insured replacing health in case of a health insurance plan.
A motor insurance policy safeguards your vehicle from potential risks that can otherwise lead to financial losses. Moreover, legal liabilities may also arise in case of an accident due to damages or injuries to third persons are also covered by a motor insurance plan. Thus, to safeguard you and others, a motor insurance cover is mandatory. The Motor Vehicles Act of 1988 is the law that makes it compulsory for all vehicle owners to have one, be it a commercial or a private vehicle.
Types of motor insurance policies
Different registrations are required for vehicles used for commercial and private use. This is also denoted by different types of registration plates that the owner must use on their vehicle. Similarly, different insurance policies are available. However, the classification for both these types is the same.
- Third-party liability insurance cover
As per the Motor Vehicles Act, a third-party liability cover is mandatory. It is the minimum insurance cover that you must buy without which you may attract legal consequences like fines and penalties. A third-party policy, also known as a liability-only cover, is that which pays for any legal liabilities arising on the policyholder. These liabilities may arise due to an accident or collision either injuring a third person or causing property damage. In both these situations, a third-party plan comes to the rescue. As the name of the cover suggests, this plan has limited coverage for third-party liabilities and hence, has a limited scope. For this reason, the premium is also affordable. *
- Standalone own-damage cover
A standalone plan is the one that provides coverage from where the coverage of third-party policy ends, i.e., for the damages to your vehicle. Not always during an accident, a third person’s vehicle suffers a loss. It is your vehicle too. That’s where an own-damage cover comes in handy. Natural disasters like earthquakes, cyclones, floods, etc. are covered in addition to man-made perils like riots, vandalism, and even theft. In case your vehicle suffers damage that is beyond repair, own-damage policy compensates by paying the Insured Declared Value or IDV. It is the maximum amount the insurance company pays in the event of a total loss situation. However, one thing about a standalone own-damage cover is that you are not complied with the law when you only have this type of insurance cover. You mandatorily need to purchase a third-party cover in addition to a standalone insurance policy. *
- Comprehensive insurance covers
Comprehensive plans are those that combine the third-party cover and a standalone own-damage cover in one bundled service. This way, you can ensure legal compliance by having third-party cover as well as protection for your own vehicle. Be it private or commercial vehicle insurance, this insurance plan helps in providing a 360-degree financial shield. With comprehensive policies, you can also enhance your coverage using add-ons that can be used to provide coverage for those events that are not covered under a standard comprehensive plan. Since the policy has a broader coverage, its premiums are also high. *
* Standard T&C Apply
To determine the premium when selecting the different add-ons, you can make use of a vehicle insurance calculator. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.