What is Car Insurance?
A car insurance policy is a contract between a car owner and an insurance provider. In exchange for a nominal premium, insurance companies offer financial protection to four-wheelers from unforeseen events like accidents, theft, fire, calamities and third-party liabilities. With a valid car insurance policy, you can also save yourself from heavy traffic fines.
Three types of motor insurance policies are third-party, own damage and comprehensive car insurance. Moreover, a car owner can buy a Personal Accident Cover of up to INR 15 Lakh to cover the death, injuries and disability of the owner and driver of the insured car.
Coverage Under Car Insurance Policy
What is Covered
What is Not Covered
What is Covered
- Third Party Liabilities – Damages caused by the insured car to the third party are covered under the comprehensive car insurance policy. These liabilities include third-party death, disability and property damages.
- Accidents – Damages sustained by the insured vehicle due to road accidents or collisions are covered in the comprehensive insurance policy.
- Theft – Any partial or total loss sustained by the insured car due to theft or burglary is covered under the car insurance policy. An amount equal to the car’s IDV is compensated in theft cases.
- Natural Calamities – Damages caused to the insured car due to earthquakes, cyclones, typhoons, hurricanes and other natural disasters are covered.
- Man-made Acts – Damages sustained by the insured car due to manmade acts like strikes, riots, terrorist activities, etc, are included in policy coverage.
- Fire – Losses to the insured car due to fire, self-ignition or explosion are covered under the comprehensive insurance plan.
- Animal Attack – Accidental damages sustained by the insured car due to animal attacks or rat bites are also covered under the car policy.
- In-transit Damages – Any damage sustained by the insured vehicle while it was in transit via road, water, rail and air are covered under the four-wheeler insurance policy.
What is Not Covered
- Car’s Depreciation – Any depreciation/wear and tear sustained by the car and its parts over time is not covered under a comprehensive insurance policy.
- Invalid Driving License – Damages sustained by the insured car when being driven without a valid driving license are also not covered under the policy coverage.
- Drunk Driving – Accidental damages sustained by the insured car when the driver was under the influence of alcohol or drugs are not covered.
- Outside Geographical Limits – Claims cannot be raised for damages to the insured car when driven outside the geographical limits, as mentioned in the policy wording.
- Mechanical Failure – If the car sustains mechanical or electrical failure, such damages will not be covered under the motor insurance policy.
- Illegal Driving – Damages sustained by the insured vehicle when being driven illegally, such as in a race or using the vehicle for unlawful purposes.
