Car insurance is important to ensure that you are financially protected in the event of an accident or mishap. There are two broad categories of car insurance policies available, third-party liability insurance and comprehensive car insurance. Before you buy a plan, it is important to assess your requirements and choose a plan that helps you get maximum coverage.
You can use the car insurance comparison tool offered by various reputed insurers like Tata AIG. However, before you buy car insurance online, it is important to go through the policy wordings too. In this article, we will discuss five essential components of the policy wordings of a comprehensive car insurance policy.
Car insurance policies are available in two types:
- Third-party liability car insurance policy: In this plan, the insurer offers protection against losses to a third-party person or property if your car causes an accident or mishap. It is important to remember that any damage to your car or injury to you is not covered by this policy.
- Comprehensive car insurance policy: In this plan, you get third-party liability insurance and own-damage insurance bundled together. Hence, if your car meets with an accident and suffers damages and you get injured in the accident too, then the comprehensive policy offers financial protection along with third-party damage.
While a third-party liability insurance policy is mandatory in India, many car owners have started opting for a comprehensive cover as it offers complete protection. However, many car owners face the problem of claim rejection despite purchasing a comprehensive plan.
Usually, the problem is non-adherence to some term or condition set by the insurer in the policy document. Hence, if you are buying a four-wheeler insurance policy, it is important to go through the document to understand what it covers and the terms of the coverage.
5 Essential Components of a Comprehensive Car Insurance Policy
Here are five essential components of a comprehensive car insurance policy document that you need to know.
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The third-party liability component
In India, the Motor Vehicles Act, 1988 makes it mandatory for all cars to have a third-party liability insurance policy. This offers financial protection against losses caused by your car to a third-party person or property. When you buy comprehensive car insurance online, it includes this mandatory component. Go through the policy documents and understand the inclusions and exclusions of the third-party insurance component.
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Comprehensive cover component
When you buy a comprehensive car insurance policy in India, the coverage includes third-party liability and own damage. The comprehensive cover section includes details of the own-damage coverage offered by the policy. It is important to go through this section thoroughly as it will detail the extent of coverage offered to your vehicle. It will include terms and conditions under which a claim can be rejected by the insurer.
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Personal Accident Cover
Comprehensive policies also include a personal accident cover for the owner/driver of the car. This section will include the list of injuries covered under the policy. It will also detail the scale of compensation you can expect as per the injury.
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Inclusions and Exclusions
The four-wheeler insurance policy document has a section dedicated to the inclusions and exclusions of the policy. It is very important to go through this list as it will help you file a claim in accordance with the terms of the policy. Also, it can help you avoid using your vehicle for purposes that might lead to the rejection of a future claim.
For example, if your car is registered for private use and you give it to someone for commercial purposes, then the damages caused if it meets with an accident will not be covered by the four-wheeler insurance policy. If you are aware of this, then you can avoid giving your car to an acquaintance for commercial use.
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Overall terms and conditions
The terms and conditions or the ‘fine print’ is an important aspect of any agreement. The same holds true for your four-wheeler insurance policy too. While most car owners tend to ignore this section assuming that the conditions would be standard, it is prudent to spend time reading this section before buying car insurance online.
Insurance companies follow the terms and conditions while processing claims. Hence, make sure that you are aware of all the terms set by the insurer before you sign the dotted line.
Summing Up
Many people have started comparing insurers before buying car insurance policies. While the policy document might include jargon that can seem difficult to understand, you can talk to the insurer to understand the terms before making the purchase. The policy document includes everything that you need to know about the coverage offered and the claims process. Hence, make sure that you go through it thoroughly to have a complete idea of the protection you are purchasing. Good Luck!
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