By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Investment Simplified
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Cryptocurrency
    • Popular Searches
    • Benefits of Using Blockchain Technology
    • What Is A Cryptocurrency Hardware Wallet?
    • What is Market Capitalization In Crypto?
    • What Is Staking In Crypto?
    • Investor’s Guide to Crypto Trading
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • Investment
    • Mutual Funds
      • Popular Searches
      • Tax Saving SIP
      • What is Arbitrage Fund?
      • What are Gold Mutual Funds?
      • What are Contra Funds?
      • Best SIP Plans to Invest
    • EPF
      • Popular Searches
      • EPFO Member Portal – Login, Registration
      • EPFO Establishment Search
      • Guide to Your EPFO Member Login
      • EPF Interest Rate
      • What Is UAN Activation?
  • Insurance
    • General Insurance
      • Popular Searches
      • Home Loan Insurance Calculator
      • What is Marine Insurance?
      • How Does a Marine Insurance Policy Work?
      • Types of Marine Insurance in India
      • Types of General Insurance in India
    • Car Insurance
      • Popular Searches
      • Commercial Vehicle Insurance Guide
      • What is Own Damage Insurance?
      • Car Insurance with Zero Depreciation
      • Engine Protect in Car Insurance
      • Return to Invoice Cover Meaning
    • Travel Insurance
      • Popular Searches
      • Domestic Travel Insurance
      • How to Buy Travel Insurance Online?
      • What is Overseas Travel Insurance?
      • International Travel Insurance
      • What is Travel Medical Insurance?
    • Pension & Retirement
      • Popular Searches
      • Commutation of Pension Calculator
      • EPF Pension calculator
      • Public Provident Fund
      • What is Individual Retirement Account?
      • Calculating PPF
  • Banking
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Enquiry by SMS, Missed Call, Netbanking
      • SBI Balance Enquiry
      • Union Bank of India Balance Enquiry Number
      • BOB Balance Enquiry
      • PNB Balance Check Number – Enquiry by SMS, Missed Call, Netbanking
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care – Missed Call and Toll Free Number
      • Bank of Maharashtra Customer Care
      • PNB Customer Care Number
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS Form
      • Axis Bank RTGS Form
      • HDFC RTGS Form
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque
      • Cancelled Cheque
      • Account Payee Cheque
      • Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in March 2023
      • Bank Holidays in April 2023
      • Bank Holidays in May 2023
      • Bank Holidays in June 2023
      • Bank Holidays in July 2023
    • Mobile Banking
      • Popular Searches
      • SBI Mobile Banking
      • HDFC Mobile Banking
      • Bank of Baroda Mobile Banking
      • Indian Bank Mobile Banking
      • Canara Bank Mobile Banking
    • Passbook
      • Popular Searches
      • SBI Passbook
      • Union Bank Passbook
      • BOB Passbook
      • HDFC Passbook
      • Axis Bank Passbook
    • Demand Draft
      • Popular Searches
  • PAN Card
    • Popular Searches
    • What is a PAN Card
    • NSDL PAN Card
    • UTI PAN
    • e-PAN Card
    • PAN Card Apply
  • About Us
  • Contact
Reading: What is a Motor Insurance Policy, Its Types, Key Features & Benefits
Share
Investment Simplified
Search
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Cryptocurrency
    • Popular Searches
    • Benefits of Using Blockchain Technology
    • What Is A Cryptocurrency Hardware Wallet?
    • What is Market Capitalization In Crypto?
    • What Is Staking In Crypto?
    • Investor’s Guide to Crypto Trading
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • Investment
    • Mutual Funds
      • Popular Searches
      • Tax Saving SIP
      • What is Arbitrage Fund?
      • What are Gold Mutual Funds?
      • What are Contra Funds?
      • Best SIP Plans to Invest
    • EPF
      • Popular Searches
      • EPFO Member Portal – Login, Registration
      • EPFO Establishment Search
      • Guide to Your EPFO Member Login
      • EPF Interest Rate
      • What Is UAN Activation?
  • Insurance
    • General Insurance
      • Popular Searches
      • Home Loan Insurance Calculator
      • What is Marine Insurance?
      • How Does a Marine Insurance Policy Work?
      • Types of Marine Insurance in India
      • Types of General Insurance in India
    • Car Insurance
      • Popular Searches
      • Commercial Vehicle Insurance Guide
      • What is Own Damage Insurance?
      • Car Insurance with Zero Depreciation
      • Engine Protect in Car Insurance
      • Return to Invoice Cover Meaning
    • Travel Insurance
      • Popular Searches
      • Domestic Travel Insurance
      • How to Buy Travel Insurance Online?
      • What is Overseas Travel Insurance?
      • International Travel Insurance
      • What is Travel Medical Insurance?
    • Pension & Retirement
      • Popular Searches
      • Commutation of Pension Calculator
      • EPF Pension calculator
      • Public Provident Fund
      • What is Individual Retirement Account?
      • Calculating PPF
  • Banking
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Enquiry by SMS, Missed Call, Netbanking
      • SBI Balance Enquiry
      • Union Bank of India Balance Enquiry Number
      • BOB Balance Enquiry
      • PNB Balance Check Number – Enquiry by SMS, Missed Call, Netbanking
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care – Missed Call and Toll Free Number
      • Bank of Maharashtra Customer Care
      • PNB Customer Care Number
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS Form
      • Axis Bank RTGS Form
      • HDFC RTGS Form
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque
      • Cancelled Cheque
      • Account Payee Cheque
      • Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in March 2023
      • Bank Holidays in April 2023
      • Bank Holidays in May 2023
      • Bank Holidays in June 2023
      • Bank Holidays in July 2023
    • Mobile Banking
      • Popular Searches
      • SBI Mobile Banking
      • HDFC Mobile Banking
      • Bank of Baroda Mobile Banking
      • Indian Bank Mobile Banking
      • Canara Bank Mobile Banking
    • Passbook
      • Popular Searches
      • SBI Passbook
      • Union Bank Passbook
      • BOB Passbook
      • HDFC Passbook
      • Axis Bank Passbook
    • Demand Draft
      • Popular Searches
  • PAN Card
    • Popular Searches
    • What is a PAN Card
    • NSDL PAN Card
    • UTI PAN
    • e-PAN Card
    • PAN Card Apply
  • About Us
  • Contact
Investment Simplified > General Insurance > What is a Motor Insurance Policy, Its Types, Key Features & Benefits
General Insurance

What is a Motor Insurance Policy, Its Types, Key Features & Benefits

Lakshey Bahl
Lakshey Bahl April 29, 2022 11 Min Read
Updated 2022/09/12 at 3:41 PM
Share
SHARE

Owning a vehicle isn’t a luxury anymore but a necessity to reach places conveniently. Sadly, driving on roads has its own perils. The bad condition of the roadway and lack of driving discipline can increase the chances of road accidents. The sad part is that it not just damages your vehicle but can cause bodily injuries too.  

Contents
Types of Motor Insurance Policy You Should Know AboutFeatures of Motor Insurance PolicyWhy to Buy a Motor Insurance?Things to Know Before Buying a Motor InsuranceWhat Affects the Premium of Motor Insurance?Benefits of Motor Insurance RenewalTypes of Motor Insurance Policy You Should Know About ConclusionFAQs

So, what’s your key to protection? Well, you can rely on a motor insurance policy. We suggest – use it before you lose it!  

Types of Motor Insurance Policy You Should Know About

Motor insurance can be broadly divided into these categories:

Car Insurance

The Indian government requires that all private vehicles owned by individuals have this type of motor insurance. In addition to protecting the car against damage from accidents, fire, theft, and other perils, it also provides coverage for any injuries to the owner. It also covers any harm and losses brought on to the third party.

Commercial Vehicle Insurance

Comprehensive motor insurance offers wholesome coverage. This means that it is more thoughtful than Tarun’s dad as it covers your vehicle, too, along with third-party damage. Besides providing the benefits of third-party motor insurance, a comprehensive motor insurance policy also covers your own vehicle and the cost of repairs to the damaged parts. 

First Party Insurance

The Motor First Party insurance policy is another name for the Motor Package policy, commonly known as the Motor Comprehensive Policy. In addition to loss or damage to the vehicle brought on by various insured dangers, it also covers all risks covered by the Motor Liability Only policy. Vehicle Insurance.

Third Party Insurance

Third-party insurance is what a helmet is to bikers. Having third-party motor insurance is mandatory, and you can get into legal trouble for not having it. A third-party motor insurance policy basically covers all the expenses arising out of damage to a third party, which can be a person, property or even another vehicle.  

motor insurance policy

Features of Motor Insurance Policy

Insurance is an essential part of owning a vehicle. Although it is an ongoing annual expense, the good news is that you can make significant premium savings. Therefore, it would be wise to be well-versed in the specifics of such policies.

  • Mechanism and working

A motor insurance plan’s operation is highly interesting, despite being relatively simple. The most important thing is to compare and choose a suitable auto insurance plan based on your needs. The comprehensive covers or the third-party plans are your options. Next, you can select add-on covers known as riders. Once you have enough insurance coverage, you must continue paying the premium to maintain the policy in effect.

  • Covers

A car insurance policy expands the coverage to include individuals and other parties in addition to the covered vehicle. The insurance plan will cover the medical costs if the car’s driver, passengers, or the drivers and passengers of the other car are hurt in the collision. Repair expenses for automobiles and other items harmed in the collision will also be paid for. These are the helpful methods that an automobile insurance plan provides a complete and all-encompassing cover.

  • Compulsory

According to Indian law, if you purchase a vehicle there, you are required to have motor insurance coverage. Whether you purchase a bike, a scooter, or a car, you must also do so as soon as possible with proper motor insurance coverage. Both new and used cars must abide by the rule.

Key Takeaways

  • A motor insurance policy provides coverage for private cars, two-wheelers and commercial vehicles.  
  • It is mandatory to have a motor insurance policy. 
  • You can take two types of motor insurance policies – third party insurance and comprehensive insurance.  
  • Third-party insurance does not provide coverage for the insured’s own vehicle.  
  • A comprehensive plan is better for people who get on the roads frequently. 
motor insurance policy

Why to Buy a Motor Insurance?

Given the poor conditions of the roads, having motor insurance has become a necessity. It not only provides financial protection but also covers third party damages. The insurance company offers a large number of facilities to the policyholder such as:

  • Direct Settlement
  • Engine Protection Cover
  • Deprecation Cover
  • Towing Facility
  • 24×7 Roadside Assistance

Things to Know Before Buying a Motor Insurance

Are you unsure of what to look for when purchasing or renewing auto insurance? Here is a comprehensive list of twenty factors to help you make a decision.

  • Understand Requirements: Spend some time reflecting on yourself, and you’ll have a better notion of how to go about getting a suitable auto insurance policy.
  • Range of the Cover: You can either get insurance with the intention of saving money in case of accidents and complying with legal requirements, or you can purchase it only to check the required insurance box. In most circumstances, the superior choice is the second. When you choose a Comprehensive Plan, you secure insurance coverage for the items included in the policy as well as compliance with the law.
  • Add-on Covers: When purchasing add-on covers, you should use common sense. They might be thought of as supplemental coverage that could be added to a Comprehensive Plan.
  • Know the Basic Plan: The Third-party Car Insurance Cover is the component of a car insurance policy that is required. According to this coverage, the insurer will assist you if your car causes damage to or injuries to third-party persons or property.
  • Cashless Facility: The term “cashless” in the context of insurance refers to a claim settlement process where no prior payment is required.

What Affects the Premium of Motor Insurance?

Nowadays, one of the first things people look at when choosing to purchase insurance is the cost. But do you understand what goes into calculating the premium? Here we go:

  • Insured declared value (IDV): The sum that reflects the current market value of your car is known as the “insured declared value,” or “IDV.” This value, which is often established by your insurance company, is the estimated present worth of your car after deducting its depreciation value.
  • Car Owner: The price of your auto insurance premium depends just as much on you as it does on your vehicle, as is the case. The owner’s driving history typically affects the cost of auto insurance in India. This indicates that having a clean driving record entitles you to lower vehicle insurance premiums.
  • Coverage required: The cost of your auto insurance may vary depending on the level of protection that your vehicle needs. Comprehensive auto insurance typically carries a higher cost, but it is nevertheless necessary.
  • Frequency of claims: This is another variable that affects the cost of your auto insurance. The insurance companies offer a discount on the premium for the following year to those who haven’t filed any claims throughout the annual policy year.
motor insurance policy

Benefits of Motor Insurance Renewal

Since car insurance policies are valid for a limited period, they need to be renewed before their expiry date. Thus, car insurance renewal is something that one must not skip at any cost. Here are some of the major benefits associated with a car insurance renewal.

  • Third Party Coverage: Your insurance renewal will come to your rescue if there is an accident involving other people or property. It will deal with legal issues as well as any expenses related to the accident. This involves harm to buildings or properties, as well as accidents that cause people to become disabled or die (third-party).
  • Comprehensive Coverage: You may keep your complete coverage for your car against natural disasters including landslides, earthquakes, floods, and cyclones by renewing it online. Theft, vandalism, burglary, riots, and other man-made calamities will also be covered.
  • Switch Insurer and Cover: You can select a different insurer while renewing your auto insurance online. First-time auto insurance policies are frequently bought directly from the car dealer. The insurer or the policy may not have received much consideration at that time. You do, however, have that choice and chance when the contract is renewed.
  • No Claim Bonus: You qualify for an NCB if you renew your auto insurance online within the policy duration without filing a claim. It is an insurance premium discount that may be redeemed at the time of policy renewal. For the first year, the reduction is at a minimum of 20% and rises to a maximum of 50% for the fifth year in a row with no claims.
  • Add-Ons: It’s possible that you need more coverage than what your policy offers and aren’t quite satisfied with it. You can choose riders to extend your insurance coverage when your policy is renewed. You have access to add-ons like zero-depreciation protection, engine cover, cover for accessories, and more, depending on the insurer you select.

Types of Motor Insurance Policy You Should Know About

 Conclusion

Consider motor insurance as the polish to your shoes and the jam to your bread. While your vehicle can work on its own, it is best to back it with the best motor insurance policy.  

It will save you from any unexpected costs occurring due to damage or theft of your vehicle. Plus, you’ll be saved from getting a huge dent in your finances.

Now that you are armed with vital details, protect your vehicle with a motor insurance policy.  

FAQs

1. How is the motor insurance premium calculated?

 Formu;a to calculate OD premium amount is: Own Damage premium = IDV X [Premium Rate] + [Add-Ons] – [Discount & benefits]

2. What does a motor insurance policy not cover?  

There are a few things that a motor insurance policy does not cover. It includes damages done due to driving under the influence of drugs or alcohol. Also, if you are driving the vehicle without a legitimate driving license, you won’t get any coverage for the damages.  

3. Which motor insurance policy is suitable for me – comprehensive or third-party?  

When we speak of insurance, there is no one size fits all. You must thoroughly assess your needs before deciding on the policy.  
If you are not a frequent driver and your car stays in the garage most of the time, you can opt for third-party motor insurance. Plus, if you have an old car, third-party insurance would be sufficient. But if you get on the roads often, it would be best to opt for a comprehensive plan.  

4. Will the motor insurance premium vary between cities?  

The premium of the motor insurance policy depends on the city in which the vehicle was registered. If you move to a whole new city, the premium will still depend on the city of registration.  

5. Do I also need insurance for my scooter? 

All vehicles on the road, including scooters, need to have motor insurance.  

6. What is the validity of a motor insurance policy?  

With a 4-wheeler insurance policy, you’ll have to renew it every year. In the case of a two-wheeler policy, you can opt for insurance cover with a term of 1, 2 or 3 years.  

7. What is the period of motor insurance policy?

Every single motor insurance policy is a 12-month, annual policy.

8. Does motor insurance policy cover my car in case of damange due to natural disasters like flood and earthquakes?

Fortunately, it does. Any damage to your four-wheeler brought on by cyclones, floods, earthquakes, storms, etc. is covered by a car insurance policy. Make sure your car is covered with comprehensive insurance.

Read More: Return to Invoice Cover

Share this Article
Facebook Twitter Whatsapp Whatsapp Email Print
Previous Article ppo What is PPO: Beginner’s Guide for Pensioners
Next Article General Insurance What is General Insurance: Walking You Through the Basics
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Searches
  • Home Loan Insurance Calculator
  • What Is Home Loan Insurance
  • Marine Insurance Types
  • What Is Commercial Insurance
  • What Is Commercial Vehicle Insurance
  • Home Insurance Definition
  • General Insurance Types
  • What Is Marine Insurance
  • What Is General Insurance
  • Motor Insurance Basics
  • What Is General Insurance
  • How Marine Insurance Works

Social Media

Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

Recent Post

Bank of India Passbook
Bank of India Passbook
Banking
ICICI Bank Passbook
ICICI Bank Passbook
Banking
IDBI Bank Passbook
IDBI Bank Passbook
Banking
PNB Passbook
Punjab National Bank Passbook
Banking

You Might also Like

ad valorem

Ad valorem tax: Ad Valorem Meaning and its Functionality Explained

Ad valorem is a Latin phrase, and the literal ad valorem meaning…

Read More
DCB net banking

DCB Bank Netbanking – Registration, Login Process & Fund Transfer

If you are a customer of DCB Bank and want to know…

Read More
Union Bank Debit Card

Union Bank Debit Card

Union Bank of India provides Visa, RuPay and MasterCard debit cards in…

Read More
bank of baroda mini statement

Bank of Baroda Mini Statement: How to Download BOB Mini Statement?

Bank of Baroda mini statement can be downloaded online as well as…

Read More
IS logo 250px

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhaar
  • Mutual Funds
  • Banking
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy
Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhar
  • Mutual Funds
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy

Social Media

Copyright © 2023 Investment Simplified. All rights reserved.

Welcome Back!

Sign in to your account

Lost your password?