As per the Motor Vehicles Act, 1988, it is mandatory to have a car insurance policy for every vehicle owner to be able to drive on the Indian roads. There are various types of insurance policies offered by different insurance providers in the markets. An ideal car insurance policy should cover the most important components that can protect you from financial losses in the event of an accident or damage to your car. Read on to know more about the key components that an ideal car insurance policy in India should include.
Key Components of an Ideal Car Insurance Policy
An ideal car insurance policy should have the following key components:
- Own Damage Cover: This coverage is optional and provides protection to your car against damages caused due to accidents, theft, fire, or natural disasters. It includes the repair or replacement cost of the vehicle, depending on the extent of the damage.
- Third-Party Liability Cover: This is the minimum coverage required by law and covers any damages or injuries caused to a third party during an accident involving your car. It covers compensation for bodily injury, death, and property damage caused to a third party by your car.
- Voluntary Deductible: This is the limit chosen by the insured to fulfil a certain portion of the insurance claim from their pocket. This amount is based on the variables in their risk and worth. However, this amount is not compulsory. Greater the voluntary deductible, lower is the premium.
- No Claim Bonus (NCB): This is a reward given to policyholders for not making any claims during the policy period. It reduces the premium amount payable during policy renewal and increases the sum insured.
- Add-on Covers: These are additional coverage options that you can opt for along with your car insurance policy. Add-on covers include engine protection, zero depreciation cover, roadside assistance, and more. They provide extra protection and enhance the scope of your policy.
- Personal Accident Cover: This coverage is mandatory and provides compensation to you or your family members in case of disability or death due to an accident involving your car. It covers the medical expenses and loss of income due to disability or death.
- Insured Declared Value (IDV): A IDV in car insurance is the maximum amount of money which the insurance provider pays in case of total loss or theft of the vehicle. It generally represents the car’s current market value.
- Comprehensive Car Insurance: This insurance cover provides coverage against third party legal and financial liabilities, own damage cover for the insured vehicle and the policyholder.
- Insurance Provider: It is important to choose the correct car insurance provider for the issuance of your policy. Their claim settlement ratio, reputation, and the coverage offered are a few key components of an ideal car insurance policy. You can apply for car insurance online by visiting the insurer’s website or offline by visiting their branch.
- Grievance Redressal: It is important for you to be aware of the grievance procedure of your insurance provider. If your insurer fails to address your concerns, you can contact their grievance officer. Insurance corporations typically provide this information in their policy wordings for easy access to the customers.
Conclusion
Having an ideal car insurance plan is crucial for every vehicle owner in India. It not only protects you against financial liabilities towards third parties, but also covers the damages caused to your insured vehicle. An ideal policy must have the mandatory third party liability and personal accident cover, add-ons, and optional own damage cover. The no claim bonus is an additional benefit which rewards you for not having made any claims during your policy tenure. By opting for an ideal car insurance policy, you will be able to drive your vehicle with a sense of peace. You will be financially protected against any unforeseen events thereby arising on the road.
