Introduction to Motor Insurance:
Whether you own a two-wheeler or a car, it is a prized possession. You spend Lakhs together to buy a motor vehicle. Any damage to a motor car in an accident, costs thousands in repairs. Worse, if the motor car is fully destroyed in an accident, replacing it will be a costly affair. Buying a new motor car in case it’s stolen, costs a fortune. It is important to buy a motor insurance plan to cover the vehicle against accidents, theft, fire, natural calamities and so on.
Whether the vehicle is for personal or commercial use, it is now compulsory to buy third party liability cover called motor insurance, under the Motor Vehicle Act. If you don’t have a valid cover, you will be penalized.
What is Motor Insurance?
Motor Insurance is also called as car insurance, vehicle insurance or auto insurance. As the name suggests, a motor insurance is an insurance for cars, trucks, motorcycles, etc. Motor insurance provides financial protection against physical damage or injury to one’s body as a result of accidents, collisions and also against liabilities arising from such incidents. IT may also offer financial protection against weather or natural disasters, collision with animals, etc.
There are two types of motor insurance plans namely, third party liability cover and a comprehensive motor insurance plan.
Motor Insurance in India is of two types:
Third Party Liability Cover:
Third party liability insurance covers the damages caused by you, to an unrelated third party. In case of accidents, a third party liability insurance plan, covers all the damages that you cause to the third party, their motor vehicle and its accessories. It also covers injuries to the third party. It only covers injuries and damage suffered by the third party and not you.
Comprehensive Motor Insurance Plan:
As the name suggests, a comprehensive motor insurance plan provides coverage for all the damages caused to the third party, as well as suffered by you. The damages caused may be due to human acts or a natural calamity. It covers the damages to your motor vehicle, third-party legal liability, theft and so on. It also provides personal accident coverage. You can also add covers to your comprehensive motor insurance plan like engine protector, accessories cover, zero depreciation cover, and so on.