Different Types of Car Insurance in India
The different types of car insurance plans available in India cater to different types of vehicle owners. As is the case with the other types of insurance, in motor insurance too, the one-plan-fits-all rule doesn’t apply. This is why you need to assess your needs and then choose the type of car insurance that matches your needs. Take a look at this article to know more about the different types of car insurance policy in India and how to choose the best option for your vehicle.
What are the types of car insurance in India?
There are primarily 3 types of car insurance plans available in India. They are the third party insurance plans, the own damage insurance plans and the comprehensive insurance plans. Each type of car insurance policy offers a specific form of motor insurance coverage. This is why you need to understand how they work and then buy the plan that would be of best use to you.
Type 1 – Third party car insurance
The first category under which car insurance is available in India is the third party insurance plans. This is a compulsory form of motor insurance that every vehicle owner must-have. It is an inexpensive form of vehicle insurance. The covers available under this type of plan are:
- Damage to the third party vehicle
- Physical injury to the third party
- Damage to the third party property
- Personal accident cover
- Legal costs cover
As you can see, there is no compensation available for damages to your own vehicle under the third party car insurance plans.
Type 2 – Own damage car insurance plan
The next type of car insurance coverage available in India is the own damage cover. Here, you get an exclusive cover for the damages to your own vehicle. The covers include:
- Damage to own vehicle due to a road accident
- Damage to own vehicle due to natural calamities like floods and earthquakes
- Damage to own vehicle due to man-made issues including riots and vandalism
There is no cover available for any third party damages in this type of motor insurance. To have an own damage policy, you first and foremost need to have a third party plan in place.
Type 3 – Comprehensive car insurance
As the name suggests, a comprehensive car insurance plan is a full car insurance cover. Under this type of policy, you get a combination of the third party car cover and the own damaged car cover. The features of comprehensive car insurance are:
- All third party liability covers
- Coverage for own vehicle for damages due to accidents, natural calamities or man-made disasters
- Personal accident cover
- Option to add riders
- Legal cover
Difference between comprehensive and third party insurance
Take a look at this table to clearly understand the main difference between 3rd party insurance and comprehensive insurance:
|THIRD-PARTY CAR INSURANCE||COMPREHENSIVE CAR INSURANCE|
|Cost||A third party plan is cheap and costs just a few hundred rupees. The price of the policy is fixed.||A comprehensive plan is more expensive. The price is not fixed as the premium depends on the cover and the riders bought, along with the deductible chosen.|
|Covers||A third party plan only covers third party damages. It also offers a personal accident cover for the policyholder.||A comprehensive plan offers coverage for third party damages, own damages and also a personal accident cover.|
|Riders||Riders are not available with third-party insurance plans.||You can add a variety of riders when you buy a comprehensive plan.|
|Flexibility||This plan is not flexible at all.||Here, you can customise your policy by buying add-on covers, choosing your deductible amount, etc|
Common mistakes related to car insurance
If you are in the process of buying a car insurance plan, make sure you do not commit any of the following errors:
- Choosing an incorrect type of cover
The biggest mistake that you can make is to choose an incorrect type of car insurance cover. If you need a comprehensive plan, do not settle for a third party plan. Or, if you feel a third party plan is enough, do not waste your money by getting a comprehensive plan. Do your research so that you know which type of car insurance is ideal for you.
- Choosing an unsatisfactory insurer
Apart from a good plan, you also need to have a good insurance provider. The insurer you choose should have a healthy claim record, a good customer support team and an excellent digital presence. Many people make the mistake of choosing an unsatisfactory insurance provider due to which many issues pop up during the policy tenure.
- Not comparing
A big mistake is to buy car insurance without comparing. Never buy the first plan you come across. You need to know what your options are. Then, you can make an economical, informed and unbiased choice.
- Only looking at the price
While the price is an important factor, it isn’t the only thing you should base your decision upon, when buying a car insurance plan. Along with the cost, also consider the covers, the claim process, etc.
- Letting the policy lapse
A big mistake that many policyholders make is to allow the car insurance cover to lapse. This is a dangerous error that you should avoid. Renew your plan on time and have an active cover at all times.
Stay away from these common insurance mistakes and you will surely be able to get the best value out of the plan you buy.
When you buy a car, it becomes your responsibility to keep your vehicle, yourself and the people around you safe. The best way to do this is by investing in a good vehicle insurance policy. Choose from the best types of car insurance and find your ideal cover. Then, get the plan and stay protected.