Car owners certainly have to get their car insured. But do they know the importance of it? You may be having certain things in mind while you are going to select car insurance policy, but are you sure that it protects you completely from the accident and damage risks? Here are the basics that you have to know to make a smart decision.
Is Car Insurance Mandatory?
As per the Indian motor law, any vehicle need to have an insurance policy covering at least the damages caused to the vehicle the people involved in it. In case, if the damage is covered under the insurance contract, the amount of damage is paid by the insurer rather than the owner of the vehicle. An insurance policy covers the cost of damage caused by theft, accident, fire, and natural disaster such as cyclones, earthquakes and floods.
Types of Car Insurance
There are mainly two types of car insurance policies, comprehensive and third party insurance.
-Third Party Insurance
Third party insurance covers the damages that are caused by the car to the third party. As per Indian law, vehicle owner should at least have a minimum amount of insurance to compensate the damages of third party. This policy doesn’t cover the damages caused to you. The premium of this type of insurance is calculated based on the capacity of engine.
-Comprehensive Insurance
Comprehensive Insurance covers both the damages caused to you and the third party. The coverage includes medical expenditure and damage caused to the vehicle due to accident, burglary, natural calamity, repair, during transit and terrorist activity. Some insurance companies exclude music system and A/C, but there are companies that cover these features, as well. The premium of the comprehensive insurance is calculated based on the present value of the vehicle.
The reputed companies offering these two types of insurance provide online car insurance renewal options for hassle free premium payments
How to Decide on Coverage you need?
There are two main things you have to consider while buying a car insurance or deciding on coverage:
-Your Capacity to Pay Premium
The minimum coverage you need in India is third party insurance. If you can afford higher, then you can think about protecting yourself from the accident. In case, if you are already having a loan to pay or any other financial obligations, then the premium can get higher. So calculate and find the amount of premium that you have to pay for car insurance.
-Additional Coverage
If you want to be protected more, then you can get additional coverage. The amount of premium differs based on the coverage you are choosing.
Personal Injury Protection
This covers all the passengers in the car.
Uninsured Coverage
If you are hit by a vehicle that is not insured, then the company pays both medical and car damage costs.
Collision
This covers the cost of repairs of the car in case of collision.
Car Accessories
This covers the damage of accessories such as A/C and music system
Keep these points in mind so that you can buy the right policy.
Author writes blogs on various insurance types such as car, medical, etc. To get more information on various insurance policies, visit reliancegeneral.