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Why You Need A Comprehensive Car Insurance Plan?

IndianMoney.com Research Team | Updated On Friday, March 02,2018, 11:31 AM
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Why You Need A Comprehensive Car Insurance Plan?

 

 

It is compulsory to have a third-party motor insurance plan in India. According to the Motor Vehicles Act 1988, you must not drive your car, unless you have third-party motor insurance. But, a Comprehensive car insurance plan is not a must. So why avail a comprehensive car insurance plan?

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Why You Need A Comprehensive Car Insurance Plan?

 

Let's understand what is a third party motor insurance plan.

 

  • The first party is covered under the insurance plan. (The person who avails the car insurance plan).
  • The second party is the insurer.
  • The third party is the person who claims damages (on life/property) on being injured by the insured.

 

So what is a third party motor insurance plan? If you avail a third party motor insurance plan, the insurer enters into an agreement with you to compensate, on a legal liability (if you are sued in a court of law), on death of an unrelated party/bodily injuries/damage to a third party property, while driving your car.

 

SEE ALSO: Good Driver: Pay Less Motor Insurance Premium

 

What's covered under third party motor insurance?

 

 

1. Death of a third party/unrelated party in an accident: You are covered for any compensation/legal liability, on death of any third party, due to an accident with your car. There is no limit on compensation.

2. Accident causes disability to a third party: If the car which you are driving meets with an accident and causes disability/serious injury to a third party, the insurer compensates the party. The compensation amount is Rs 2 Lakhs for total disability and Rs 1 Lakh for partial disability.

3. Damage to the property of a third party: The insurer compensates a third party on damage to his property, caused by an accident due to your car. The compensation is Rs 7.5 Lakhs for cars/commercial vehicles.

4. There is owner-driver cover: The owner-driver cover is mandatory with any third party motor insurance policy. The owner-driver insurance covers the owner/person who drives the car in case of an accident, up to Rs 2 Lakhs for car/commercial vehicle.

 

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Why You Need A Comprehensive Car Insurance Plan?

 

1. The plan covers you for damage to your car: While third-party motor insurance covers damage to a third party (another's persons) car/property, if your car collides with another person's car/property, you are not covered for damage to your car.

A Comprehensive car insurance plan pays the repair costs for your damaged car.

 

2. You are covered for injuries suffered in the accident: The third-party motor insurance plan, does not compensate you for medical treatment for injuries sustained, as the driver/owner of the car in an accident.

A Comprehensive car insurance plan pays for hospitalization/medical treatment on injuries you sustain, if you drive the car and it meets with an accident.

 

3. Covered for unattended personal belongings stolen from your car: Third party motor insurance does not compensate you, on leaving personal belongings unattended inside the car. If they are stolen, the insurer will not compensate you for the loss, if you only avail third-party motor insurance.

If you avail a Comprehensive car insurance plan with ‘Loss of Personal Belongings’ add-on cover, you will be compensated for your loss. Be Wise, Get Rich.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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