As per the Motor Vehicles Act of 1988, it is mandatory for all the vehicles plying on Indian roads to have a minimum of a third-party car insurance policy. It covers the vehicle owner against any legal and financial liabilities that may arise in case his/her vehicle is involved in an accident that may cause bodily injuries or property damage to an unknown third-party.
However, standalone 3rd party car insurance is of little help when it comes to protecting your own car against the damages due to any natural or man-made calamities. According to the data collected from the Ministry of Road Transport and Highways, more than 9 lakh road accidents took place in India during the last two years.
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It offers the highest level of security to your car
Unlike the third-party car insurance, a comprehensive plan offers a superior coverage by compensating you in case your vehicle suffers any damages during an accident. You can either claim a reimbursement from the insurance company later or take your car at a network garage for cashless repairment of the vehicle
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Compensation in case of death or disability
Comprehensive insurance covers the death and bodily injuries to the owner-cum-driver of the insured vehicle. In case, you suffer from death or, any partial or permanent disability post the accident of your car, the insurance company will pay full compensation amount to the nominee as mentioned in the policy. You can also get the co-passengers covered under this policy by opting for an add-on along with personal accident cover
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Covers legal and financial hurdles
Apart from covering the damages to your own vehicle, a comprehensive vehicle insurance policy also covers the legal liabilities that may arise in case of an accident. It provides the mandatory third-party insurance cover required to drive a vehicle in India and also covers the legal and financial obligations for the tribunal hearings of accident-related cases
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Protects your car against fire accidents
A comprehensive insurance policy also covers your vehicle against the damages caused by all types of fire-related accidents. Although it does not include mechanical defects, it does cover the fire caused by engine overheating. You’re provided full compensation for your car up to the Insured Declared Value (IDV) of your vehicle in case of such an unfortunate incident
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Secures your car against theft
If your car or any of its components gets stolen, then a comprehensive motor insurance plan will cover the entire losses incurred due to the theft. The car insurance company will provide you full compensation for your loss during such a scenario and in case your car gets stolen, you will be compensated with the entire IDV of your car
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Protection against vandalism
In case your vehicle is vandalized in an unfortunate event of civil disturbances or riots, then the comprehensive vehicle insurance policy will work as a savior by providing full reimbursement for the repairment of your damaged car. In case your car is damaged beyond repair, the insurer will provide you the full market value of the car
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Full protection from flying objects
Imagine a situation where a projectile like a ball, tree, brick or a stone falls on your car and shatters the windscreen. Even in such an unpredictable situation, a complete cover in the form of comprehensive vehicle insurance will offer full coverage for your losses. It will include compensating for the entire damage to your vehicle, including the window panes and windscreens
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Complete protection against the natural calamities
A comprehensive insurance cover also acts as a cushion against natural calamities that can render your precious car irreparable. For example, acts of nature like earthquakes, cyclones, floods, and hail storms, etc. can destroy your car beyond repair. In such a scenario, you will be provided a big relief by your car insurer in the form of compensation against the damages inflicted on your car by the natural calamity
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Third party liability coverage
A comprehensive car insurance policy also covers the government mandated third party car insurance component, as per the Motor Vehicle Act. Often, car mishaps result in third party damage. The third party refers to the person who has suffered damages by your car
While comprehensive insurance offers umbrella protection for you, your car, co-passengers and even damages incurred by third parties, yet it does not cover willful neglect and a host of other man-made damages. Here are the exclusions that are not covered by a comprehensive vehicle insurance policy:
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Regular wear & tear
Losses and damages caused to the vehicle due to expected wear and tear, including engine oil leak are covered under a comprehensive car insurance policy
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Unlawful driving practices
Underage driving, the vehicle used for criminal activities, driving without a valid license, and wrong-side driving are not covered under the comprehensive motor insurance policy. Any claims arising out of such incidents will also be rejected
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Willful damage or destruction
Any damage to the policyholder or to the car incurred deliberately is one of the primary exclusions in a comprehensive vehicle insurance policy. Remember, car insurance fraud is a crime and can land you into a ton of legal troubles
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Commercial use of private vehicles
Personal and commercial vehicles are covered under different auto insurance types. Insurance claims will be rejected if a personal vehicle is used for commercial purposes
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Driving under the influence
Any claims for damages arising out of accidents caused due to the policyholder being intoxicated or under the influence of narcotics are not covered by insurance companies. Beware, driving under the influence is a crime, punishable by law. DO NOT DRINK & DRIVE!
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Lapse of a comprehensive car insurance policy
Comprehensive car insurance is an annual contract and needs to be renewed at the end of each policy year, or else the policy gets lapsed. Any damage sustained during the lapsed duration is not covered under the insurance plan. Hence, it’s best to always go for car insurance renewal on time
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War & Invasion
Damages incurred due to a state of war, civil war, nuclear attack, terrorist attack, riots, and rebellions are not covered under an auto insurance policy
Since standalone third-party insurance has many limitations, a comprehensive insurance cover becomes crucial for the all-round protection of your car. It ensures maximum coverage for your vehicle by providing financial assistance for expensive repair works, thereby enhancing your peace of mind and reducing your anxiety about your car.