Car Insurance and Third-party Car Insurance – Explained


Car insurance is an essential investment for car owners, providing crucial financial security while driving and maintaining your vehicle. It covers unforeseen expenses related to repairing damages in case of incidents. In India, two primary car insurance options are available: comprehensivecar insurance and third-party car insurance. Depending on your needs and budget, you can select either policy to ensure optimal coverage for your vehicle. Below is an extensive overview of car insurance, including its types and details about third-party coverage.

Car insurance: Explained

Car insurance is an agreement between the car owner and the insurance company. It offers financial coverage against damages caused by accidents, natural calamities, or theft. It also provides a personal accident cover for the owner or driver of the vehicle.

A comprehensive car insurance policy provides coverage against natural calamities and man-madedisasters to your insured vehicle. You also get a personal accident cover and third-party coverage in this policy.

Third-party car insurance: Explained

Third-party car insurance protects policyholders against legal liabilities arising from damages inflicted upon third parties or their property. This coverage is mandatory for all vehicle owners in India. With a third-party insurance policy, the insurer compensates for repair or replacement expenses resulting from accidental damages caused by the insured vehicle to third-party vehicles or properties. Furthermore, medical expenses incurred by the third party for accident-related injuries are covered. However, third-party car insurance does not provide coverage for damages to the insured vehicle itself.

Importance of having car insurance

Car insurance provides a financial safety net that assists in covering damages or losses to your vehicle. It relieves you from bearing the costs of repairs or replacements if your vehicle suffers any damage. This insurance ensures that policyholders receive necessary compensation in the event of accidents, thefts, natural disasters, or third-party liabilities.

What happens if you do not have a car insurance?

Driving a vehicle in India without valid car insurance is illegal and can lead to substantial penalties or imprisonment. According to the Motor Vehicles Act of 1988, it is mandatory for every vehicle on Indian roads to be covered by a valid third-party car insurance policy. If caught driving without insurance, the car owner may face a fine of up to Rs. 2,000 or imprisonment for up to three months.

However, when purchasing car insurance, it is advisable to consider a comprehensive policy. This type of insurance offers complete coverage for your vehicle. Additionally, to enhance protection, it’s recommended to invest in add-on covers along with the comprehensive policy.

Know about add-on covers in detail

Although comprehensive car insurance policies cover significant damages, they often exclude certain types of damage, such as those to the engine, consumables, depreciable parts, and other specific contingencies. To achieve complete financial security, it’s advisable to consider additional coverage through various add-on options available for comprehensive car insurance policies in India. These add-on covers can be purchased by paying an extra premium. Here are some commonly available add-ons:

Roadside Assistance Cover: This add-on provides 24×7 assistance in case of car breakdowns, offering services like towing, fuel delivery, battery jump-start, and lockout assistance.

Key Replacement Cover: Covers the cost of replacing lost or stolen car keys, including the programming of new keys.

No Claim Bonus (NCB) Protection Cover: Ensures that your accumulated no claim bonus remains intact even if you make a claim during the policy period. This is beneficial for those with a significant NCB over several years.

Consumables Cover: Provides coverage for consumable items like engine oil, brake fluid, and coolant in case of accidental damage.

Engine Protection Cover: Offers financial protection against damages to the engine due to water ingression or oil leakage, particularly useful for those in flood-prone areas.

Return to Invoice Cover: Guarantees compensation equivalent to the car’s invoice value in the event of theft or total loss, ensuring you receive the vehicle’s full purchase price.

By opting for these add-on covers, you can enhance the scope of your comprehensive car insurance policy, providing broader protection against various risks and contingencies beyond the standard coverage. It’s essential to assess your specific needs and budget to determine which add-ons are most suitable for your circumstances.

With digitalisation, finding information about car insurance policies has become easy and convenient. With Bajaj Finserv app, you can compare and buy comprehensive and third-party car insurance policies online without hassle or paperwork.Bajaj Finserv app provides a one-stop shop forleading insurance products in India. You can choose and buy from a range of car insurance policies availableon the app based on your budget and requirements.

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