Types of Car Insurance: You do not know this one

Types of Car Insurance in India and other countries is an important concept to know when you buy a car then you will have to buy car insurance because You like to drive to work or take your family out on chores and fun drives or enjoy time out with friends. As a responsible car owner, you keep your vehicle in good condition, obey the road rules while on the road and practice good driver etiquette. So, you wish driving your car to be a worry-free experience. Despite your precautions, your car could meet with uncertainty on the road, such as major or minor accidents, breakdowns, tire bursts, natural/man-made disasters, and so on.

Hence, you should always prefer car insurance also when you buy a car for the best solution to free of financial worries in any mishappening on the road.

So you can buy car insurance after understanding all types of car insurance, specific terms and conditions of your policy, and protections are offered for financial losses arising from any unfortunate events involving your car.

What is Car Insurance?

Car insurance is a policy to overcome unforeseen risks or losses. It is done to protect your vehicle from uncertain risks. it provides protection against the losses incurred as a result of unavoidable instances. It helps cover for financial loss by accidents, theft of cars. Car insurance gives the confidence to drive peacefully. You can take cover according to your need as per the different types of car insurance available at different car insurance companies.

From where I should buy car insurance?

It depends on your requirements and different factors such as the value of the car, type of coverage, vehicle classification, add ons, voluntary excess, etc. as per the insurance Dekho website, here is the list of best car insurance companies in India with claim settlement ratio (CSR) & Network-

Car Insurance CompanyMotor OD Claim Settlement Ratio FY20Network Garages
IFFCO Tokio General Insurance95.30%4,300+
Royal Sundaram General Insurance92.66%4,600+
The Oriental Insurance Company91.76%3,100+
HDFC ERGO General Insurance91.23%6,800+
Universal Sompo General Insurance90.78%3,500+
Tata AIG General Insurance90.49%5,000+
The New India Assurance89.60%3,000+
SBI General Insurance89.51%16,000+
Bajaj Allianz General Insurance88.83%4,000+
Future Generali India Insurance88.69%2,500+
Bharti AXA General Insurance87.99%5,200+
ICICI Lombard General Insurance87.71%5,600+
Liberty General Insurance87.48%4,300+
Cholamandalam MS General Insurance85.89%7,100+
National Insurance Company85.71%3,100+
Edelweiss General Insurance84.52%1,000+
Reliance General Insurance84.26%3,800+
Acko General Insurance83.91%2,000+
United India Insurance Company82.93%3,100+
Kotak Mahindra General Insurance82.81%1,300+
Go Digit General Insurance80.47%1,400+
Magma HDI General Insurance79.60%4,000+
Shriram General Insurance77.26%2,000+
Navi General Insurance76.20%900+

What are the types of car insurance & cover?

There are different types of car insurance & covers available for car owners. Here is the list, in which you can search and buy as per your requirements-

  1. Third-Party Liability Only Cover
  2. Collision Damage or Own Damage (OD) Cover
  3. Personal Accident Cover
  4. Zero Depreciation Insurance
  5. Comprehensive Car Insurance
  6. Liability Coverage
  7. Uninsured Motorist Protection
  8. Underinsured motorist insurance
  9. Medical Payment Coverage
  10. Gap Insurance
  11. Towing and labor insurance
  12. Rental reimbursement Insurance
  13. Classic car insurance
  14. Ridesharing coverage
  15. Custom equipment coverages
  16. Roadside coverage

Third-Party Liability Only Cover

  1. It is affordable.
  2. This policy will Cover bodily Injury and Death of the third party.
  3. It covers the property damage.
  4. this policy fulfils legal obligation.
  5. It is suitable for old vehicles and will not cover own vehicle damage.

Collision Damage or Own Damage (OD) Cover

  1. When you choose collision damage car insurance coverage, the cost of repairs to your vehicle that has been damaged is reimbursed.
  2. To determine the cost of collision coverage, its age and Insured Declared Value are taken into account to arrive at the premium. The IDV is based on the market value of the vehicle.
  3. When a claim is lodged under collision coverage policy, the maximum amount payable under the policy is given by the IDV less accumulated depreciation.
  4. If you have purchased your vehicle on a loan, you should hold collision cover.

Personal Accident Cover

  1. This cover protects the owner-driver and the passengers in case of an accident.
  2. And the medical bills and hospitalization charges are all covered by the insurance, not considering whose fault it was.
  3. When you wish to protect yourself, means the owner-driver of the car, by opting for reimbursement of medical expenses after an accident, you are using personal accident car insurance coverage.

Zero Depreciation Insurance

  1. This coverage is generally offered as an add-on to car insurance policies in India.
  2. Suppose your vehicle is damaged and you need to replace the parts.
  3. Then the insurer will consider the depreciated value of the parts for claim settlement.
  4. A Zero Depreciation Cover will help you get the complete claim amount without accounting for any depreciation in the costs.

Comprehensive Car Insurance

  1. This type of coverage gives the highest level of protection as it includes liability for third parties, damage to own vehicle, personal accident cover, and all non-collision damage such as storms, floods, fire and theft.
  2. You can further enhance a comprehensive car insurance policy with a choice of add-ons.

Liability Coverage

  1. Liability coverage is required in most US states as a legal requirement to drive a car.
  2. And Liability insurance may help cover damages for injuries and property damage to others for which you become legally responsible resulting from a covered accident.

Uninsured Motorist Protection

  1. This is a type of insurance that comes handy if you are hit by another vehicle and the at-fault driver doesn’t have car insurance to cover your repair damages.
  2. Typically, any repair or medical bills should be covered by the at-fault driver’s auto insurance.
  3. However, if the at-fault driver doesn’t have it then you will have to pay it out of your own pocket.
  4. An uninsured motorist protection policy covers you against such expenses.

Underinsured motorist insurance

  1. Many drivers choose to carry the minimum in liability coverage to save money, but this might not provide enough coverage.
  2. Underinsured motorist insurance can protect you in the event of an accident with a driver whose insurance is not enough to cover the costs.

Medical Payment Coverage

  1. Medical payments coverage can help pay medical costs related to a covered accident, regardless of who is at fault.
  2. And Medical costs following an accident can be very expensive.

Gap Insurance

  1. Car value can depreciate quickly, so an auto insurance settlement might not be enough to cover the cost of a loan.
  2. So Gap insurance may help certain drivers cover the amount owed on a car loan after a total loss or theft.

Towing and labor insurance

  1. Available if you already have comprehensive car insurance, towing and labor insurance may reimburse you for a tow and for the labor costs to repair your vehicle.

Rental reimbursement Insurance

  1. Figuring out how to get around after an accident can be expensive.
  2. Rental reimbursement insurance helps pay for a rental car if your vehicle cannot be driven after an accident.

Classic car insurance

  1. Classic car insurance provides specialized coverage designed for the unique needs of vintage and classic car collectors.
  2. When it comes to insuring your classic, antique or vintage car, you will quickly find out it’s not the same as insuring the family car.
  3. If your car is a collectible, you’ll want to look into a policy designed specifically for collectibles. While your regular car is insured with the idea that it is depreciating in value almost immediately after you buy it, a classic or antique car may appreciate in value – particularly if you are planning to put work into restoring it.

Ridesharing coverage

  1. According to allstate.com If you drive for a ridesharing company, such as Uber or Lyft, you might already be aware that a personal car insurance policy typically does not cover “business use” of your vehicle.
  2. In other words, if you’re in a car accident while you’re on the clock, you could end up paying out of pocket for expenses such as vehicle repairs or an injured person’s medical bills.
  3. Most ride-share companies are required by state law to provide insurance for their drivers.
  4. But, if you use your vehicle for both personal and business purposes, you might want to consider additional coverage to help protect it.

Custom equipment coverages

  1. Covers the cost of replacing stolen or damaged aftermarket parts, equipment, personal electronics as well as audio and/or video equipment not installed by the manufacturer of your auto.

Roadside coverage

  1. Covers the cost of common roadside services like tire changes and jump-starts.

How to choose the perfect car insurance policy?

Insurance companies in India offer many car insurance plans that serve the specific needs of the buyers, but choosing the right policy can be challenging. In India, insurance companies offer different plans with different features, and these plans come at various price points. So, it is important that you do your research well before picking the right insurance policy to best suit your needs. Here are some tips that should help you:

  1. Know your needs
  2. Compare the plans
  3. know about the claim settlement ratio of the insurer
  4. check the claim process
  5. Ask about the add-ons
  6. never provide any wrong information

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