Finance

Different types of car insurance plans: Checkout Which One is Suitable for You

Buying a car insurance policy for the first time can be overwhelming, with various companies offering different types of car insurance policies for the customers. It is wise to choose the plan that suits your vehicle-type, driving conditions, or other factors related to your vehicle. The factor determines your insurance coverage, which further affects the premium of your car insurance policy. So, it is necessary to select the features required for your vehicle and forego the features that aren’t important while choosing your plan.

There are three types of car insurance plans which you can choose for your car:

Third-Party Liability Coverage:

This is coverage for damages done to any third party due to your negligence or fault. This liability will help you rescue from the expenses you would have to pay to the third party for the damages done to their vehicle or person. This is mandatory insurance by the Indian Motor Vehicle Act.

Benefits Included in Third Party Insurance

  • Covers the cost of the repair or replacement for the third-party damages
  • Covers medical bills in case of third party bodily accident
  • You can buy the minimum coverage permitted by law
  • This is one of the cheapest policy in the market
  • Suits all vehicle whether old or new
  • Does not cover any damages done to own vehicle

Comprehensive Car Insurance

A comprehensive policy covers both own damages as well as third-party liability.

Benefits of Comprehensive Car Insurance

  • Provides complete protection of the vehicle from theft, fire or any other damages due to natural or human-made calamities.
  • Covers accidental costs of the third party.
  • Covers damages due to vehicle collision and other risks factors.
  • This is the highest insurance plan that you can choose along with other riders. 

Add-on Insurance Covers

These covers can be added along with your basic insurance policy. They have added advantage of providing optimum protection for your car. 

Roadside Assistance – This cover helps in case your vehicle stops mid-way by providing necessary roadside assistance. Your vehicle would be moved to the nearest service station, or if required, you will get the towing aid. Roadside assistance also provides a separate vehicle in case of emergency or accommodation facilities. 

Engine Replacement– This covers all the engine replacement expenses caused due to engine damage for factors such as natural calamities. 

Nil Depreciation Cover- In this cover, the vehicle is insured at the invoice price, ensuring zero loss. Nil depreciation cover helps to get the maximum compensation for your car damages.

Car insurance premiums

The premium of car insurance policy is directly proportional to the IDV (insured Declared Value). Choosing a higher insured declared value would attract more premium while a lower IDV has a lower premium. Choosing too low IDV value will decrease the coverage, and you may have to end up paying from your pocket. Apart from IDV, other factors such as the driver’s age, the car model, etc. also affect the insurance premium of the cars.

Every car owner should wisely choose the insurance policy with maximum benefits and minimum risks. While third-party liability is the minimum that a car insurance holder should buy, it is always recommended to buy a comprehensive policy to get wider coverage.

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