The Five Primary Categories of Car Insurance Coverage

In every household, a car is a paramount financial investment. It is an asset with personal emotions and experiences attached. Any damages to it would not only hurt and impact personally but also financially. It is important to have insurance coverage that offsets this Impact of loss.

Car insurance is the way to protect the owner, driver, passengers, and society from financial and legal impacts. Generally, there are 5 key insurance policies for a car. All these four-wheeler insurance coverages come in types based on the type of protection one needs.

Now, the question arises, which insurance coverage to choose from? For every car owner, it is crucial to know and decide which one is most convenient for them.

 Primary Types of Car Insurance Coverage You Need to Know

Insurance companies like Tata AIG provide different policies for financial protection and peace of mind in the event of accidents, theft, or other unforeseen incidents. Moreover, there are additional policy coverage benefits, like bumper-to-bumper car insurance and roadside assistance cover, which you can add to your car insurance policy for a little additional cost.

You can mark the scope, features, and benefits of the various policy types as we shed light on 5 very basic insurance coverages that a car insurer provides.

 Third Party Liability Coverage

As per the Motor Vehicle Act 1988, every motor vehicle on Indian roads must have third-party coverage. This is for any damage caused to a third party due to the actions of the insured while driving their four-wheeler.

Here are the following incidents that are covered under this insurance coverage:

  1. Bodily injury or physical damage to a third party.
  2. Damages to property or vehicle of third party (amount chargeable for repair/replacement).
  3. Cost of medical expenses and hospitalisation charges.
  4. In case of the death of a third party, all liabilities arising out of medical expenses, legal fees, and rehabilitation costs.

The cost of this type of coverage is more affordable as the scope of coverage is very limited and does not include many benefits. It is vital to note that liability coverage does not include losses caused to the insured’s vehicle, including accidents, losses due to natural calamities, or even car theft.

 Own Damage Car Insurance

Just as its name suggests, this insurance coverage provides security for your own car. In case of an accident, this insurance coverage promises to cover the cost of repair and/or replacement borne by the car owner.

This insurance coverage is designed to cover expenses incurred by car owners, regardless of who is at fault. Own damage car Insurance policy does not cover any of the third-party losses, so this can be purchased with the third-party liability coverage for self-protection. This coverage particularly falls under no-fault insurance states.

 Comprehensive Coverage

Comprehensive coverage goes beyond accidents, protecting non-collision events such as theft, vandalism, natural disasters, fire, or even encounters with animals. It promises the insured absolute protection. It is a great choice to consider if it fits your budget.

It covers the repair or replacement costs of your vehicle, minus the deductible as prescribed at the time of purchase. Combining collision and comprehensive coverage offers a more comprehensive protection package called  “full coverage.” Because of its scope and benefits, this coverage is slightly more expensive than other insurance coverage.

 Collision Coverage 

Unlike liability coverage, this type of insurance protects your vehicle in case of an accident, regardless of who is at fault. This coverage helps pay for the repair or replacement of your car, with deductibles not included.

It is precious for newer vehicles, as the cost of repairs can be substantial. While calculating the premium for this, the age and the market value of the four-wheeler are considered.

It is particularly valuable for new and costly cars, for old cars the collision cover can be more affordable. If you live in a city with crowded streets and heavy traffic this insurance cover is a great choice!

 Underinsured/Uninsured Motorist Coverage

Generally speaking, the one who caused the accident should pay for the cost of damages to one’s vehicle. But what if that four-wheeler owner does not have insurance?

Here’s where this coverage protects you. In the event of an accident with a driver who has insufficient or no insurance coverage, this helps you to take care of all expenses.

This insurance cover pays for:

  1. Replacement/ repair to the four-wheeler
  2. Medical bills that arose out of the accident.

 To Sum Up

Understanding these insurance categories will help you decide which one fits your requirements.  However, not only buying is enough; one also has to regularly review and adjust the coverage policy as required.

These services are now easier; you can get a custom-tailored 4-wheeler/car insurance policy for your car. Now you can rest assured of your knowledge of various categories of car insurance coverage. So next time you look to buy one, don’t forget it.

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