Types of Motor Insurance Policies You Should Know About

In today’s world, buying a vehicle is as much a responsibility as it is a necessity. With the purchase of a motor comes the duty of having insurance. An insurance policy is a contract between the motor insurance company and the vehicle owner that comprises various benefits and pays off in several ways. It acts as a shield against financial ramifications in any loss or damages arising from an accident, theft, third party liability, fire, or natural disaster. The most important thing to remember here is that as per the Indian Motor Vehicles Act, 1988, it is mandatory for a vehicle owner to hold a valid insurance cover before running their vehicle on Indian roads. 

To help you navigate through the process of buying insurance, the following are some types of motor insurances you should know about:

 

• Private car insurance:

A private car owner can insure his vehicle with a comprehensive insurance plan depending on the type of car to cover it against any damages in uncertain events such as accidents, fire, natural disasters, theft, vandalism and even terrorist attacks. As per the law, the car owner should also have a third-party liability insurance plan to cover the owner and the third party against any injuries that occurred in case of an accident. 

 

• Two-wheeler insurance:

Just like the private car insurance, the two-wheeler can also have an insurance plan to cover unforeseen damages from accidents, fire, theft etc. In the case of the two-wheeler insurance policies, they mostly come with a compulsory personal accident cover for the rider or owner. And the owner can also extend this for the pillion rider. 

 

• Commercial vehicle insurance:

The commercial vehicle insurance is as the name suggests, taken for heavy commercial vehicles such as trucks, agricultural vehicles, passenger buses, cargo vans etc. Although it also covers light commercial vehicles like auto-rickshaw, ambulance etc. Different types of premium plans are available for individual owners and commercial establishments. The premium on the insurance is usually calculated by considering vehicles manufacturing date, current showroom price, place of registration, make and model, etc. 

 

Above are the different categories of vehicles and types of motor insurance applicable to them. The types of motor insurance policies are divided further based on the coverage they offer. 

 

• Third-party insurance:

In insurance terminology, the owner or the insured vehicle is the first party, the insurance company becomes the second party, and the person or property that gets damaged in an accident involving the insured vehicle becomes the third party. The insurance policy covers the losses incurred by the third party. It is compulsory to have third party insurance in India. Third-party insurance only offers accident cover and does not cover damages due to theft, fire etc. 

 

• Comprehensive motor insurance:

A comprehensive insurance policy is an inclusive plan that covers damages by the third party, theft, fire, accidents, natural disasters, terrorist attacks etc. It also offers personal accident cover and various add-ons such as roadside assistance, engine protection, zero depreciation etc. 

 

Above are the types of motor insurance policies you should know about. Driving a vehicle without valid motor insurance is not only unsafe but also illegal in India.