What Does A Comprehensive Insurance Plan Cover?

Owning a car brings comfort and convenience, but it also comes with responsibility. One of the most crucial responsibilities is having the correct motor insurance. In India, you need to have at least a third-party car insurance policy by law. However, many individuals choose to buy a comprehensive insurance policy because it provides wider protection.

This article will cover what comprehensive car insurance means, how it’s different from third-party insurance and what it covers.

What is comprehensive insurance?

As the name suggests, comprehensive car insurance provides more than just basic coverage. It not only covers damage caused to another person’s vehicle or property in an accident but also covers damage to your own car.

This means if you are involved in an accident, your insurer will help pay for the repairs or losses faced by both you and the other party. It also protects you from damage caused by events beyond your control, like fire, theft, natural disasters or vandalism.

What is covered in comprehensive insurance?

A comprehensive motor insurance policy will offer protection in many situations. Below are the main things it usually covers:

It offers the highest level of security for your car

Unlike the third-party car insurance, a comprehensive plan offers a superior coverage by compensating you in case your vehicle suffers any damage during an accident. You can either claim a reimbursement from the insurance company later or take your car to a network garage for cashless repair of the vehicle.

Compensation in case of death or disability

Comprehensive insurance covers 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 the 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.

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.

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.

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 loss incurred due to the theft. The car insurance company will provide you with 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.

Protection against vandalism

In case your vehicle is vandalised in an unfortunate event of civil disturbances or riots, then the comprehensive vehicle insurance policy will work as a saviour by providing full reimbursement for the repair of your damaged car. In case your car is damaged beyond repair, the insurer will provide you with the full market value of the car.

Full protection from flying objects

Imagine a situation where a projectile like a ball, tree, brick or stone falls on your car and shatters the windscreen. Even in such an unpredictable situation, 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.

Complete protection against 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 hailstorms can destroy your car beyond repair. In such a scenario, you will be provided with a big relief by your car insurer in the form of compensation against the damages inflicted on your car by the natural calamity.

Third-party liability coverage

Often, car mishaps result in third-party damage. A comprehensive car insurance policy also covers the government-mandated third-party car insurance component. The third party refers to the person who has suffered damages by your car.

What are the benefits of buying a comprehensive motor insurance policy?

Choosing a comprehensive policy costs more than a third-party one, but the advantages are worth it. Here’s why:

1. More complete coverage

With comprehensive insurance, you are not only protected from the legal claims made by others (the third-party liability), but also from damage to your own car. Whether the damage is due to a natural catastrophe, fire, theft or accident, the insurance will cover the costs. This is not possible in a third-party policy.

2. Peace of mind

Unexpected events can take place anytime and can cause extreme damage and cost a lot to fix. With the comprehensive insurance, you won’t need to worry about paying the entire thing from your own pocket. The policy helps cover all these losses and gives you a sense of security each time you drive.

3. Protection from many different risks

India gets to witness a wide range of situations that can easily damage a car, such as animals, riots, road accidents, theft, heavy rains and even potholes. A comprehensive policy protects you from man-made and natural dangers, making sure you are covered in almost every possible situation.

4. You can customise the policy with add-ons

One great advantage of comprehensive insurance is that it lets you add extra coverages depending on your needs. Some of the well-known add-ons include:

• Return to invoice: In case of a theft or total loss, this add-on will pay you the original invoice value of your car.
• Zero depreciation cover: This guarantees you get the full claim amount without reduction for part depreciation.
• Engine protection cover: Useful during floods when the engine might get water-damaged.
• Roadside aid: Helps if your automobile breaks down and you need help directly on the spot.

5. Better support and quicker claim process

Comprehensive policies are often known for their smoother and faster claim process. Many insurers provide extra customer support such as direct repair services at the garages, towing services and help with documents. This means less hassle and faster resolution if something goes wrong.

6. Improved resale value of your car

When you decide to sell your car, having a history of regular comprehensive insurance can work in your favour. Buyers often prefer a car that's been well-protected, as it gives them confidence that the vehicle is in good condition. This can help you get a better price when selling your car.

What is not covered by comprehensive insurance?

Even though comprehensive insurance gives wide coverage, it doesn’t cover everything. Here are some of the common exclusions:

1. 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.

2.vWillful 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 in a ton of legal trouble.

3. 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.

4. 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!

5. 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.

6. 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.

What is the difference between comprehensive and third-party policies?

Both comprehensive and third-party insurance policies serve different purposes, and it’s important to understand how they compare. Choosing the right one depends on your needs, budget and the level of protection you want for your car. Let’s look at how comprehensive insurance is different from third-party insurance:

Conclusion

In India, while third party car insurance is legally required, it only provides basic protection. A comprehensive car insurance policy offers wider safety, protecting you from unexpected costs caused by natural calamities, theft or accidents. It might cost a little more, but the advantages and peace of mind it offers are worth it. You can also customise your plan with add-ons to suit your needs.

Still unsure which car insurance plan is right for you? Let us help you pick the best option. Simply fill out the form on this page to get personal advice on the right car insurance for your needs.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.