Car owners have insurance for their cars. But do you understand the insurance policy? You must have certain intentions in mind when implementing the policy, but are you sure your vehicle is safe from these dangers? Here are the basics you should know about car insurance to help you make a smart decision.
Is car insurance necessary?
Indian law states that every vehicle on the Indian road must have a valid insurance policy covering at least the cost of damage that the vehicle may cause to other people or vehicles.
If damage occurs under the terms of the insurance contract (and as long as there is no fraud), the insurance company will pay the amount instead of paying it out of pocket. In most cases, the insurance policy covers the costs derived from accidental damage, theft, fire, and natural disasters such as floods, earthquakes, or hurricanes.
Forget coercion. Even without it, it is recommended that you have insurance for your new car. It is not the neighbor who always suffers; Your car could also be in an accident. It really helps to spend any amount on your car insurance. Vehicle insurance must be renewed annually.
Types of car insurance
There are two basic types of auto insurance: liability insurance and comprehensive insurance. Let’s take a closer look at them.
This type of insurance covers the damages that your car causes to a third party. This is the minimum required by Indian law for the third party to be compensated if another person or vehicle is damaged due to their driving. For example, if you have an accident while driving, the insurance company will pay for the other vehicle’s damage and the people in that vehicle. However, this policy does not cover you or your vehicle.
The premium is calculated here based on the engine power of your vehicle. Since this policy only covers third parties’ damage, the premium is relatively low compared to the full coverage policy.
The name explains it. It is complete. This car insurance covers damages to you and third parties. In the event of an accident, the medical expenses of you and the passengers in your vehicle and the other party’s medical expenses will be covered. The insurance company also covers the costs of both your vehicle and the other vehicle.
Under this policy, the insurance company will also pay for damage to your vehicle in the event of a natural disaster, theft, theft, terrorist activity, or repairs in transit. Insurance companies even cover car accessories, like your car’s music system and air conditioning.
The premium is calculated here based on the insured value of your vehicle. Comprehensive insurance generally has a higher premium because the insurance coverage is extensive compared to liability insurance.
The minimum level of vehicle insurance that each driver must carry depends on the relevant national legislation. Liability insurance covers all claims against the insured. If you drive a car or a car that you do not own, you are covered by the car policy owner. Non-owner policies may be offered that cover all vehicles the insured person drives. If you rent a car and the instructions are fully covered, the rental car does, too. When paying with Visa or MasterCard, the card provides additional coverage for collision damage for rental cars, but there are some restrictions. Please check this in advance.
The liability component of auto insurance is the insured amount for damages suffered by the insured driver during an accident. For example, if the driver damages one side of the house while driving during the accident, liability insurance will pay for the damage up to the amount of liability.
The collision part of car insurance is the amount of coverage for damage caused to the car during an accident for the insured person, for which there is a deduction. The primary purpose of this coverage is to pay the costs of repairing the damaged vehicle or the vehicle’s monetary value if it is not repairable. This cover is optional.
Loss of profit
If the insured vehicle is rendered unusable, the vehicle’s loss of insurance coverage during the repair period will cover the rental costs.
Uninsured or uninsured coverage
Suppose the debtor does not have auto insurance or does not have enough auto insurance to cover the loss during the accident. In that case, their auto insurance will work the same as auto insurance for the offender.
Disburse the loan or disburse the rent
Suppose the car’s value is less than the amount owed on the loan. In that case, this portion of the car insurance will cover this negative principal if the vehicle cannot be repaired during an accident or other non-collision losses.