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How does insurance company plans differ for different cars?

Ever since he became financially independent, Vineet had dreamt of one thing. He wanted to bring a car home. He was so motivated that he had started saving from his first salary itself. After years of being patient, now the time had come to bring a swanky new set of wheels for himself.

He had booked the car, but there was an aspect that was keeping him worried. The salesman at the car dealership had told him that he needed to get insurance before they could hand over his vehicle. He had no issues with buying insurance. However, he was confused about the different plans that different car insurance companies were offering.

He had been doing his research, and the more he explored, his dilemma only became stronger. Each insurance provider offered different plans and had a different name for each of them. He wished there was a simpler way to compare these plans so he could make an informed decision.

Do Insurance Plans Differ across Companies?

If you are in a similar confusion, you may want to know that insurance plans are the same across companies. Although their names may differ, the coverage they provide is more or less the same. 

The following are the three types of car insurance that may suffice your needs when you are a car owner. 

  • Third-Party Insurance

India is a country in which road accidents are a major cause of fatalities every year. In 2019, 151 thousand individuals lost their lives due to road accidents. If you get in an accident where a third party is also involved, you will be liable to pay for the damages caused to that person. 

Third-party insurance covers for such liabilities arising from death or bodily injuries afflicted on a third person in a road accident. The government of India has mandated for car owners to buy at least this insurance, as per the Motor Vehicles Act 1988. This four-wheeler insurance policy also gives you peace of mind that you won’t have to arrange for finances at the last minute if you were to get in an accident.

The Act protects the rights of the claimants who are not able to prove negligence on the part of the vehicle involved. It is called “no-fault liability” claims and is covered under third-party insurance. Moreover, it also covers “fault liability” claims. Some companies may call this a “liability only” or “act only” policy.

Third-party insurance covers the following:

  • Third-party injuries or death – The policy will cover the damages in case of injuries or death of a third party person caused by your car.
  • Third-party property damages – If your car were to damage the property of an individual, the policy will cover it too.
  • Personal accident cover for owner-driver – The policy will also provide compensation in case of accidental death or disability of the car owner.

Third-party insurance does not cover the damages caused to another automobile in an accident. Nor does it provide compensation if the belongings of the policy owner get stolen or damaged in the accident.

  • Comprehensive Car Policy

If you are looking for maximum protection, you should go ahead with a comprehensive car policy. This four-wheeler insurance policy covers the interests of both parties and the car in an accident. 

Under this policy, the owner-driver of the car gets a personal accident cover. The third-party involved in the accident also gets coverage. Moreover, a comprehensive car policy offers protection to the maximum amount.

Apart from damages and injuries caused by accidents, this four-wheeler insurance policy protects the vehicle against multiple other incidents. For instance, it also covers natural disasters like fire or flood, theft, vandalism, damages caused due to falling objects, and glass damages like a broken windshield.

One of the best benefits of taking this policy is that you can also take add-ons to make it more inclusive. For instance, you can take 24X7 roadside assistance when you buy this policy. It is useful when you are on a highway, and your car breaks down. In this situation, your insurer will provide everything right from towing service to car servicing to another vehicle if you do not have the time to wait.

Similarly, you can choose from a host of other add-ons like zero depreciation, engine protection, right to invoice, NCB protection, etc. 

  • Pay as you Drive

It is a kind of comprehensive car policy that depends on the total number of kilometres your car has driven. It means that the premium is not constant but changes as per your usage. If you drive your car occasionally, you will have to pay a lower premium. On the other hand, your premiums will increase if you use your car frequently. To calculate the distance covered by your vehicle, the insurer will install a telematics device in your car.

Pay as you drive can be the most affordable car policy for your needs, especially when your car is several years old or when you have multiple vehicles. In such situations, paying high premiums for all your vehicles can pinch your pocket.

Moreover, you also get the option to choose add-on covers for additional coverage when you choose to buy car insurance online. If you ever want to shift your policy, you can opt for a regular insurance plan. 

Is Insurance Different for Different Cars?

One of the confusions that Vineet had was if the insurance plans are differed as per cars. If you have a similar question, you may want to know that insurance plans do not depend on the car. However, the cover amount is based on the Insured Declared Value (IDV) of the vehicle. It will vary across the make and model of your car.

Moreover, the price of insurance can vary across different car insurance companies. When you take add-on cover, the premiums can increase.

In Summary

When you buy a new car, getting insurance can be overwhelming, particularly when it is your first car like Vineet. The information shared above will resolve most of your troubling questions and enable you to make an informed decision.

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