If you wish to drive in India, securing an insurance for your vehicle is essential. According to the Motor Vehicles Act of 1988, it is mandatory to arm your vehicle with a third party liability insurance. This type of insurance covers damage caused to a third-party or his property. However, during the accident, if your vehicle gets damaged or you suffer an injury, a third party liability insurance won’t cover the same. This is where a comprehensive insurance or package car insurance policy comes into the picture.
Read on to understand the basics of a comprehensive car insurance and how it works.
What is Comprehensive Car Insurance?
As the name suggests, this type of car insurance offers comprehensive coverage in case of an unfortunate event or accident related to the vehicle. What does comprehensive mean? It means the insurance will provide financial coverage for third party liability as well as own damage in case you encounter an unfortunate incident, resulting in damage or loss. This includes damage caused by accidents, fire, natural calamities, and human-caused disasters.
The premium for car insurance has two components:
1. Third-party liability coverage
2. Own damage cover
The IRDAI decides the premium for the third party liability coverage. It is based on the vehicle’s displacement size and remains the same for all models with the same cubic capacity.
The amount you pay towards your own damage portion relies on your car’s model, registration date, place of registration, and additional accessories.
Here is a detailed explanation of what a comprehensive insurance covers.
● Third-party Coverage
You may be a skilled driver, but suppose one day, a pedestrian suddenly jumps in front of your car, while you are driving on the highway. Despite your efforts to hit the breaks on time, your car collides with the pedestrian, causing major injuries. The treatment costs amount to around ₹2.5 lakhs. In this scenario, the third-party coverage will pay the entire bill.
The policy will also offer cover the expenses if the injured person’s family members file a lawsuit against you. Additionally, if there’s any damage caused to the third party’s property, that too will be compensated for by your policy.
● Personal Accident Coverage
Let’s understand this also with an example. Suppose you are driving and another motorist hits your car or loses control, resulting in a major collision that damages your vehicle or causes physical injury to you. The personal accident portion of your coverage will handle the medical bills. Basically, the personal accident coverage protects you against the risk of physical disability or death due to an accident.
● Theft
Suppose you are in a hurry, and you park your four-wheeler in an open area. Once you return, you notice that the car is missing. If you have a comprehensive car insurance, the insurer will cover you by paying out the insured declared value (IDV) of your car in case of a theft. That means the settlement amount, at maximum, can be the invoice value minus depreciation.
In insurance, the depreciation rate is decided by the IRDAI. At present, the rates are as follows:
The list of requisite documents varies based on the type of claim you are submitting. Here are the details:
● A duly filled out claim form with your signature
● Copy of your policy document
● Photocopy of the registration certificate
● Copy of your valid driving license
● A copy of the First Information Report (FIR) is required if the claim is related to an accident or theft
● Original repair bills
● Documents supporting the extent of damage your car sustained
● Details of the garage from where you got your vehicle repaired
The final list of documents you can confirm with your insurance agent or insurer’s representative. You will need to submit the documents at the time of claim processing. Submission of these documents can be done online, either via the official app or the website, in common cases.
There are several scenarios in which your claim request might get rejected. These include:
● According to the law, if, at the time of an accident, the alcohol content in your body is found to be over 0.03%, not only will your claim request be denied, but you may also face legal repercussions.
● Your claim won’t be approved if the driver is found to be a minor or without a valid driving licence at the time of an accident.
● You cannot submit a claim for consequential losses or if the loss is due to wear and tear.
● Your insurer won’t be able to assist if you are using your car for sports activities, carrying out illegal activities, or using your personal car for commercial activities.
Comprehensive car insurance safeguards vehicle owners by offering extensive coverage beyond the mandatory third-party liability insurance. This policy protects against accidents, natural disasters, theft, and personal injuries. It assures that you are financially protected for third party liability as well as own damage in the event of unforeseen circumstances.
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.