what is motor insurance
Ever wondered what is motor insurance? It is mandatory under Indian laws if you own a motor vehicle. Motor insurance helps you meet any unexpected expenses that may arise if your vehicle meets with an accident. It can also monetarily assist you in case of bike/car theft. Like other insurance policies, a motor insurance policy functions as a risk-mitigating tool. It protects you from creating a massive dent in your finances when you face an emergency. Read on to learn more about motor insurance.
Types of Motor Insurance
Third-party insurance policy:
Third-party insurance policy is mandatory insurance that you must have when you buy a vehicle. It provides coverage for the damage caused to third parties and vehicles due to accidents, theft, and fire.
Comprehensive insurance policy:
This type of insurance policy provides you the best of both worlds as it provides both third-party cover and own damage cover. Even if your car gets stolen, you can file a claim under such a policy and get compensated. Typically, most policyholders prefer purchasing a comprehensive insurance policy and also take on various add-on covers such as zero depreciation cover, personal accident cover, etc., to make it more useful.
Own-damage insurance policy:
In case of any damage to your vehicle due to fire or rain, or theft, you can raise a claim under this policy to compensate you for the expenses incurred for repairing your vehicle.
Coverage Under Motor Insurance
Motor insurance covers various types of damages caused to the insured vehicle, third-party vehicles, and property. The coverage depends on the type of policy purchased by the policyholder. Generally, the coverage under motor insurance includes:
Third-party liability coverage:
This covers the damages caused to the third-party vehicle or property. It is mandatory by law in most countries.
Comprehensive coverage:
This covers damages to the insured vehicle, third-party vehicles, and property. It also covers damages caused by natural calamities such as earthquakes, floods, and storms.
Personal accident coverage:
This covers the medical expenses incurred due to injuries suffered by the driver and passengers in the insured vehicle.
Uninsured or underinsured motorist coverage:
This covers damages caused to the insured vehicle by an uninsured or underinsured motorist.
It is important to read the policy document carefully and understand the coverage offered by the policy. Common complications that can arise while availing coverage under motor insurance include incorrect documentation, delayed claim processing, and disputes regarding the extent of coverage.
Factors Affecting Motor Insurance Premiums
Motor insurance is an insurance for your vehicle that has been deemed mandatory by the Indian Government. According to the Motor Vehicles Act, 1989, all types of motor vehicles like cars, commercial vehicles, jeeps, and motorbikes have to be insured.
Importance of Motor Insurance:
There are several reasons to ensure
That your vehicleis covered by comprehensive motor insurance. Some of them are as follows:
Lack of roadways infrastructure especially within cities
In case of any accidents, it covers the damages, thus taking care of liabilities
If you choose the right policy, it also covers for hospitalisation
In case of demise, the right policy also covers the family
How to Buy Motor Insurance
If you want to purchase a new vehicle, you should start shopping for a motor insurance policy as soon as you can. It makes little sense to wait right till the end, as finding the perfect policy that suits your needs can take a while. The sooner you begin, the more options you will have to choose from. It is also advisable not to purchase the first policy you come across. Do your research and obtain all the motor insurance details that you can from various sources. You can also ask your friends and family to recommend a few insurance companies you should look at.
