Motor Insurance (1)
Auto Insurance or Car Insurance provides you with a cover against loss or damage to your car on account of unforeseen risks such as fire, theft, floods, earthquakes, accidents etc. In addition, a car insurance policy also provides you with protection against death or injury of the insured and covers any third party liabilities that may arise out of injury or death of a third party or damage to third party vehicle/property.
There are two types of car insurance policies available in the market:
1. Third Party Insurance
It is legally mandatory to take a third party insurance cover in India. A vehicle is not supposed to be driven on Indian roads without a valid third party insurance cover. This policy will cover any costs associated with damage that you might cause to an individual or his/her car while driving your own vehicle. If you are involved in an accident with another car, then the insurance company will compensate for any damages to the other car and any medical expenses for individuals in that car.
2. Comprehensive Insurance
Comprehensive insurance provides you with not only Third party insurance but also covers you against ‘Own Damage’ i.e. it also covers damages to your own car and medical expenses for yourself and your car’s passengers subject to applicable terms and conditions. This policy will also cover against loss or damage to your car on account of other risks such as theft, burglary, fire, floods, earthquakes, terrorist activity etc.
While it is only the Third Party Insurance that is legally mandatory, a comprehensive policy provides you with wider protection against a higher number of risks and should be actively considered when purchasing car insurance.