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What all does Car Insurance Cover?

What all does Car Insurance Cover?

Snapshot: Do you understand the risks and people covered by the various types of car insurance policies and what all does a car insurance covers? Read on!

Car Insurance cover is a sure-shot way to keep you covered against liabilities and risks. The law mandates all car owners to have insurance cover for their vehicles. But more than this, a car insurance is required to keep your vehicle covered in case of a mishappening. So, do you understand the risks and people covered by the various types of car insurance policies? Read on!

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Liabilities and Risks Coverage

The actual coverage may vary from product to product. However, most of the car insurance policies address the following aspects:

Liability towards bodily damage - Any damage that is caused by the policyholder to others or his/her family members when driving someone else’s car with their permission.

Liability towards property damage - Damage to property such as another person’s car is covered under this head.

Collision cover - Covers damage to the car due to collision with another vehicle, object, turning over or sometimes even due to damaged roads.

Non-collision physical damage - Damages to the car in case of storm or windshield break etc. which is not due to collision are covered here.

Payments towards medical charges - Any medical costs incurred due to an accident for the policyholder and the passengers in the car are covered under this head.

Underinsured motorist and uninsured motorist coverage - In case a negligent driver has no or insufficient insurance, the bodily injury and property damages are compensated for.

Lesser known coverage facts

Many additional features are doled out by some insurers as freebies or sometimes by payment of additional (usually nominal) rider charges. Some of these are:

Wear and Tear - Normally the value of car-parts is depreciated each year. A Zero Depreciation cover will ensure that damaged parts are not depreciated before reimbursement.

Roadside Assistance - A 24*7 help service in case of a breakdown, tyre puncture etc.

Extended Accident Cover - Personal accident cover for the owner, in case he/she has a driving license.

Mechanical or electrical breakdowns - An engine protector cover for all non-accidental damages.

Limited Liability - With this cover, one can get reimbursement of the original cost of the car, in case of total loss and not the depreciated value, subject to a maximum of two years from registration date.

Additional Geographical Extension - The car insurance can be extended beyond India to areas like other countries of the Indian sub-continent and even Maldives.

What car insurance does not cover

Whilst it is important to know what the car insurance covers, you should also be aware of what it does not. Some of the damages not covered are those of the engine due to oil leak or due to climatic changes as in monsoons, damages due to driving under the influence of alcohol or the car being driven by someone without a driving license, damage to the car due to war-like situations or terror attacks or a deliberate attempt by someone to cause an accident. If the policy holder has contracted the car to someone else, the insurance will not extend to the person to whom the car has been pledged.

Types of Car Insurance Coverages

The car insurance policies are of two types:

Third Party Insurance

The insurance covers damages due to third party (pedestrians, passengers, driver, owner). Any legal liability in case of any accident caused by the car and any compensations that need to be made thereof are usually covered by this type of insurance. This also includes any liability for death and injury or damage to property of passengers, pedestrians, occupants of other vehicles and outsiders.

Comprehensive Car Insurance

This is a cover for any damages caused to the car due to natural or man-made calamities.  Natural consists of fire, explosion, hurricane, earthquake, storm and the like. Man-made calamities consist of theft, riot, burglary, housebreaking, terrorist activity, damage du tot travel by rail, road, waterway or air. This can be coupled with personal accident cover for passengers in the car as well.

A last word…

Choosing the right car insurance policy for you is of utmost importance. You should check out the various policies on the offer, compare them carefully and then select the one that suits your requirements the most. Also, do remember that the insurance must be renewed well in time before the previous one expires, generally annually. If the policy is not in force at the time of a mishap, there will be no coverage possible.

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