What Does a Car Insurance Cover In India, Meaning and Types

Depending on the product or insurance you choose to buy, the level of coverage differs. In this article, we are going to discuss the list of possible coverage offered by a car insurance policy in general.

But before we proceed further in the article, you might be interested in knowing what is insurance coverage.

Meaning of Insurance Coverage

An insurance coverage is the security offered by an insurance company against any kind of risk and liability to protect a person or a unit. It assists the insured person or unit in case of any emergency or financial loss.

What does a car insurance cover in India?

Here are the possible features of a basic Car Insurance Coverage:

Liability against bodily injury: A car insurance gives coverage against bodily injury claims of people in case of an accident.

Liability against property damage: It also give coverage against property damage costs to third-party damages.

Covers medical costs: Most of the insurances available offer car insurance coverage against medical claims by paying the medical bills of the policy owner and other passengers involved in an accident.

Coverage for uninsured or under-insured cases: In case a third party is involved in an accident and the party involved is not covered enough by the insurance or has no insurance at all, then this car insurance coverage can be used to pay for the damages. Some Indian states cover physical injuries under this policy, while some states give coverage for property damages as well.

Coverage in case of Physical Damage to the car

Below are some of the instances in which your car’s physical damages are covered:

• In case of a collision involving your car
• In case of non-collision damages caused by natural phenomena

In general, the vehicle insurance policies are broadly divided into two different categories depending on their coverage types:

1. Comprehensive Car Insurance Policy

Here, the auto insurance coverage is offered against any damage or loss caused to the vehicle and the accessories of the vehicle that are covered under the policy. This damage could be caused by man-made catastrophe or by natural calamities, and are categorized under:

• Man-Made Calamities: In case of man-made calamities, the cover is given against theft, car breakage, riot, strike, damage due to terrorism, and due to other wicked activities. This type of auto insurance coverage also covers your car in transit via air, rail, road, waterways and so on. Further, with this policy the insured person gets personal accident coverage wherein the person driving the vehicle is covered.
• Natural Calamities: In case of natural calamities, the coverage is provided against damage caused due to fire, flood, cyclone, storm, hurricane, lightening, rockslide, and damage due to earthquake among others. Thus, almost all the natural disasters are covered under this auto insurance coverage. Further, in the comprehensive car insurance coverage, you can also avail coverage for personal insurance for people sitting in the car.

Another compulsory feature of the comprehensive plan is the legal liability coverage for third party. Under this feature, the owner of the policy is safeguarded against any legal liability caused due to an accident involving his car. Moreover, this car insurance coverage also protects against legal liability in case of death, permanent bodily damage or permanent damage to any asset such as property.

Another interesting feature of this policy is that it provides coverage to vehicles against theft or fire even when the vehicle is parked in a parking lot and not in use for the time being.

2. Third-Party Car Insurance Policy

All insurance policies involves two parties –

• One is the insurance company/agency offering the insurance and paying the compensation, and
• The other is the insured person or unit who can claim for the insurance amount against any damage or loss.

Thus, in case an accident involves a third-party, it can be termed as the one that doesn’t fall in the category of the insurer or insured. They may be anyone like a passersby walking on the streets and getting hit by a vehicle, or the passengers/people sitting in car and so on. It can also be the driver or passengers using a public transport, such as a bus or taxi. It also includes the fare paying as well as non-fare paying passengers.

The third-party car insurance policy covers the insured against all the legal liabilities in terms of compensation that needs to be paid due to an accident involving your vehicle. It include both compensation for death, major injury etc. for third-parties like street-side walkers, passengers etc.

In case of personal vehicle, the owner of the car is insured for any major injury or death caused to anyone sitting in the car while the accident takes place. This car insurance coverage also protect against damages to property of third-party.