Motor insurance is an insurance policy for any motorized vehicle. This includes cars, two-wheelers, buses, trucks, etc. When you own a motor vehicle, there are many situations where damage to the vehicle can cause financial losses. Also, in the unfortunate event of an accident or a collision, there can be damage to third-party property or person too. In such events, a motor insurance policy can protect you against financial losses arising due to the damages to the vehicle(s) or person(s).
The mandatory aspect of Motor Insurance
Chapter XI of the Motor Vehicles Act, 1988, makes it mandatory for any vehicle owner to purchase a motor insurance policy before using the vehicle in a public place. This includes driving the vehicle on public roads or even parking it in a public area. The insurance policy should at least cover damages to third-party.
Types of Motor Insurance Policies in India
In India, motor insurance policies can be classified based on the type of vehicle and the type of cover.
Type of vehicle
Based on the type of vehicle, motor insurance policies are of the following types:
- Private Car Insurance
- Two-Wheeler Insurance
- Commercial Vehicle Insurance
- Goods Carrying Vehicle
- Passenger Carrying Vehicle
Type of cover
Based on the type of cover, motor insurance policies are of the following types:
- Third-Party Liability cover
- Own Damage cover
- Comprehensive cover (this includes third-party + own damage)
Significance of Motor Insurance in India
While a third-party liability cover is mandatory, a comprehensive motor insurance policy offers a range of benefits to vehicle owners:
- Reduces third-party liability – Since this is a mandatory cover, it protects you against financial losses arising from damages if the accident is caused by you. The policy covers all damages or injuries caused to the third-party property or person(s).
- Provides cover for your vehicle – In case of an accident or a collision, regardless of who causes the accident, there is a possibility that your car gets damaged too. A comprehensive policy includes financial protection for damages to your vehicle.
- Covers hospitalization costs – In an accident, while some vehicle owners are lucky to get away with minor bruises and cuts, others can suffer fractures or severe injuries and need to be treated at a hospital. In such cases, a comprehensive policy covers hospitalization costs taking the financial burden away during such stressful times.
- Provides cover against natural and man-made calamities – Apart from accidents and collisions, natural calamities like earthquakes, floods, cyclones, etc. or man-made disasters like riots, vandalism, terrorist activities, etc. can damage your vehicle. A comprehensive cover offers protection against all such calamities/disasters.
Major insurers like Tata AIG offer a wide range of add-ons or riders to allow vehicle owners to customize the policy based on their individual requirements. Here is a look at some common add-ons:
Add-ons with Motor Insurance Policies
While some add-ons are available across all vehicles, others are specifically designed for a car or two-wheeler or a commercial vehicle. This is a generic list. You will need to look for the add-ons available to you before selecting a plan.
- Zero Depreciation Cover
- Roadside Assistance
- Engine Protect
- Tyre Protect
- Consumable Expenses Cover
- No Claim Bonus Protection Cover
- Loss of Personal Belongings Cover
- Key Replacement Cover
- Repair of Glass, Fibre, Plastic, and Rubber Parts Cover
- Return to Invoice Cover
- Courtesy or Hire car Cover
- Emergency Medical Expenses Cover
- Loss of equipment or goods Cover
- Additional transportation expenses Cover
- Loss of Income Cover
- EMI protector Cover, etc.
All these covers offer certain benefits and are designed to suit the requirements of different kinds of vehicle owners and vehicle types. Ensure that you talk to the insurer to get a detailed list of add-ons available to you.
How to apply for a Motor Insurance Policy?
You can apply for a motor insurance policy by visiting a dealer or an agent of the insurance company or the branch office of the company OR by visiting the insurer’s website and buying it online. Most insurers offer a paperless option of applying for a motor insurance policy on their websites. You need to provide your personal details in the application form, information about your vehicle like its make and model, engine number, etc. Then, you can choose the add-ons that you want to include and create a policy that you need. Insurance companies will display the premium amount and allow you to make the payment online too. You will receive a copy of the policy document at your registered email id.
Remember, motor insurance is designed to give you peace of mind when you are driving on the road as you know that you are financially protected in case of any mishap. While accidents do not occur every day or to everyone, they can never be predicted. Driving in India has its own perils and hence, buying a motor insurance policy is recommended right after you buy a vehicle.