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Different Types of Motor Vehicle Insurance in India



Different Types of Motor Vehicle Insurance in India

Motor vehicle insurance is mandatory for all vehicle owners in India. There are three types of motor vehicle insurance in India: private car insurance, two wheeler insurance and commercial vehicle insurance.

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An insurance policy covers you and your vehicle against accidental damages, damages caused by natural calamities, theft and malicious acts. So read ahead to know the need, benefits, types and covers of motor vehicle insurance.

Why Do You Need Motor Vehicle Insurance?

You must be wondering why you need motor vehicle insurance. To understand why, you must first know that the Indian government has mandated motor vehicle insurance under the Motor Vehicles Act, 1988.

This is not just it. Having motor vehicle insurance ensures that your vehicle is protected against accidental damages, any damage caused by natural calamities, and even theft. In addition, this ensures that you are financially secure during unfortunate events.

Classification of Motor Vehicle Insurance in India

Motor vehicle insurance in India has been divided based on the ownership type of vehicles. Here are the classification types of motor vehicle insurance in India:

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Two-Wheeler Insurance

Two-wheeler vehicles such as bikes and scooters are protected under a two wheeler insurance policy. Damages caused during accidents, fires, natural calamities, and theft can be claimed under this insurance. A two-wheeler insurance policy also provides a mandatory personal accident cover for the owner of the vehicle. You can opt for a third-party or comprehensive plan under a two-wheeler insurance policy.

Private Car Insurance

A car insurance plan covers private cars against accidental damages, fires and other mishaps. There are two types of car insurance: Third-Party Policy and Comprehensive Policy. Insurance premiums of cars vary depending on car models, engine type and previous policies.

Commercial Vehicle Insurance

A commercial vehicle insurance policy covers vehicles that are not meant for personal use. This insurance type covers motor vehicles such as trucks, buses, light commercial vehicles, ambulances, taxis, auto-rickshaws, etc.

Types of Motor Insurance Policies in India

You now know about the classification of motor vehicle insurance in India. However, you must know that India has two types of motor vehicle insurance policies. They are:

Third-Party Insurance

A third-party insurance plan is a standard coverage policy which only covers damage and loss inflicted on a third-party individual. It has been mandated as per law for whoever owns a vehicle. As it is a mandatory policy, it can also safeguard you and your vehicle from litigation.

Comprehensive Insurance

One of the most common and valuable types of insurance policy is comprehensive insurance. It will protect you and your vehicle in case of accidents and third-party damages as well. It is an optional insurance policy which can be opted for the overall protection of all parties involved in an accident.

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How to Choose the Right Motor Insurance Policy?

Opting for the right insurance policy as per your requirement is imperative. Make sure that you conduct your due diligence before choosing a motor insurance policy for your vehicle. Some points to be considered while choosing a motor insurance policy are as follows:

  • Insured Declared Value (IDV): Your vehicle’s market value is called Insured Declared Value. A policy premium depends on this value. Hence, you must ensure that your IDV is correctly entered while choosing a policy.
  • Add-ons: While choosing a motor insurance policy, see if it has add-on covers which offer high benefits. An add-on cover is offered with a motor, which can come with several useful benefits.
  • Speed of claims: You must find out the speed and ease of raising claims through an insurer. Many insurers offer a speedy and hassle-free claim process. Make sure you choose the one with the easiest claim process.
  • Network garages: See if your insurer has a network of garages which offer a cashless facility. This can help you raise claims without any hassle.
  • Door-step pickup & repair: A door-step pickup and repair facility can be handy. This facility will ensure that you don’t have to make a trip to a garage to raise a claim.

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Motor Insurance Premium Calculator

Always use a premium calculator while purchasing a motor vehicle insurance plan. You can easily find premium calculators from different insurers online and compare plans and offerings to know what is best for you. Select an add-on cover with your insurance plan and use the premium calculator to check which one has maximum benefits.

Also, always conduct thorough research before choosing a motor vehicle insurance policy for your vehicle. See which insurer is offering the maximum benefits with a hassle-free claim process. This will help you opt for a policy which is the most suited for your vehicle.

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