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

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.  

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.  

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. 

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.

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

Read More: Return to Invoice Cover