5 Types Of Car Insurance Coverage – Complete Guide

1321

5 min read

Updated on Jul 13, 2022

Buying an insurance policy for your car is a significant task, especially when you are doing it for the first time. The fact that a large number of companies are offering different types of car insurance, is a good enough reason to get confused and overwhelmed while looking for a suitable insurance policy for your vehicle.

Further, it is also important to consider different aspects that your car insurance should cover to fulfill your requirement in an efficient way. The different types of vehicle insurance cover that your car insurance agency should provide should be pertaining to driving conditions, condition of the vehicle, third-party needs as well as conditions that are specific to the driver.

However, it is also important to note that the premium of an insurance increases depending on the coverage it offers. Thus, you must customize your insurance plan in a way that it covers all the important features while removing the ones that are not required.

In this article, we will discuss about the 5 different types of car insurance coverage that are available for your vehicle. However, before going into the details of the types of car insurance coverage, let’s first understand the meaning and the requirement of an insurance coverage.

What is an insurance coverage?

An insurance coverage is the protection against any kind of risk and liability offered by an insurance company to protect a person or a unit for any damage or mishap. An insurance coverage is required to assist in case of any emergency or financial loss that you might face.

Buying a car insurance is necessary as it is mandated by the Motor Vehicles Act, 1988.

5 types of vehicle insurance policy

Here we are discussing 5 types of vehicle insurance policies that you can choose for your vehicle and the points to remember while choosing the best insurance coverage for your car.

1. Coverage for Liability

The liability insurance is a type of car insurance that safeguards the driver if an accident takes place because of any fault or negligence of the driver.

A liability insurance plan offers the following advantages:

  • It offers coverage for repair of any damage or for any replacement for third-party.
  • It offers coverage for third-party medical bills in case of any medical treatment or hospitalization.
  • Also, as per legal requirement the car holder should buy insurance for minimum liability that must be included in the insurance plan.
  • Also, law specifies that you should choose a plan offering more liability insurance premium than the obligatory requirement so as to cover maximum risk and help limit your own costs.
  • In case you choose an upper “sum-assured” plan, it is not worthy enough to pay a hefty amount when your plan limit exhausts.
  • The liability plan covers for third-party grievances in case of wound, demise or harm to property.
  • This type of car insurance coverage is compulsory as per the 1988’s Act of Motor Vehicle.

2. Coverage for Collision

The collision coverage is a type of vehicle insurance that covers the cost for the damage of your car after an accident. Subscribing for this cover will let you have your insurance company paying for your car repairs. It covers the following:

  • If there is major damage done to your car and the repair charges are higher than its market value, the insurance agency will pay you the amount that is equivalent to the present market value of your car.
  • Subscribing for coverage on collision should mostly depend on the age of the car. You must include this coverage while opting for a coverage for a brand new car.
  • Having a collision insurance is better if you have a loan on your car.
  • In case of an old vehicle, you can opt for a low coverage on collision.

3. Coverage for Personal Injury

The personal injury coverage is an additional cover to protect against certain risks. One can opt for this type of vehicle insurance along with the insurance cover for compulsory liabilities.

  • It covers all the expanses linked to the accident.
  • It also covers medical costs of the person driving the car as well as of the other passengers sitting in the car.
  • Most importantly, here, the insurance agency bears the medical bills without considering the person at fault.
  • This plan provide protection to the person driving the car, the passengers, as well as the owner of the car.

Thus, the Personal Injury coverage allow you to make the most of your insurance plan by making it cost-worthy.

 

4. Coverage for Uninsured Motorist

The Uninsured Motorist protection help you pay for repairs in case of an accident where the damages are caused by the other driver who doesn’t have an insurance cover to pay off.

This is specifically helpful in case the insurance policy of the third-party is not adequate to meet the requirement for the damage. This protection can be even used for an extra rider to limit your exposure.

In this type of car insurance policy, the insurance agency will pay off the additional charges to minimize your costs on medical and other damages.

5. Comprehensive Coverage

This is an all-inclusive protection or full coverage car insurance to cover for all types of risks linked to your car, the person who is driving, the people who are sitting in the car at the time of the accident, the damage to the vehicle of the third-property, and the people sitting in the third-party vehicle.

Moreover, it also cover the following risks:

  • Damage caused due to weather
  • Damage caused due to flood
  • Damaged caused due to fire and
  • Damaged caused due to theft

Depending on your budget, you can purchase the Comprehensive or full coverage car insurance plan. Moreover, you can even use devices like anti-theft in your vehicle as well as other security tools to limit the premium amount quoted by the insurance company.

Let us now discuss some of the important aspects that needs to be taken into account while buying an insurance.

In general, when you opt for an insurance – be it compulsory, comprehensive or any other policy – the basic requirements that needs to be noted are related to budget, risk protections, features and benefits, among others.

Features of third party insurance:

  • Affordability
  • Offering cover for death or injury
  • Offering cover for assets
  • Realize legal compulsion
  • Suits best for old vehicle

Features of Comprehensive Insurance:

  • Present wide cover options
  • Comprises third-party accidental damage
  • Include vehicle collision risk
  • Include cover against damage done by natural calamity
  • Include coverage for theft

Reasons to upgrade to a Comprehensive vehicle insurance

  • It provide highest value in return
  • Offers damage against accessories of your vehicle
  • Covers for damage against natural calamity
  • Covers for damage done by animals
  • Covers for damage due to riots, strike
  • Covers for damage to third-party

Benefits of Comprehensive vehicle insurance

  • All-inclusive plan protects you and your vehicle
  • Suits best for brand new car
  • Also suits for luxurious/sports car
  • Presents ‘Roadside Assistance’ added under this plan

Conclusion
Depending on the need, you should buy the best insurance plan for your car offering maximum advantages and covering maximum risks. Rather than choosing a cheaper option, it is better to opt for a policy depending on the value and make of your car. Here, it is best to compare different policies before opting for the one that suits your car best. So tread well and evaluate your options well while choosing an insurance for your car.

Jan 28, 2022
SHARE THIS ON
Author Bio
Author Image

PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

Related Blogs

Would love to hear from you

Share your candid feedback. Your email address won’t be published, we promise!

All fields are required

Find your suitable insurance plan

Speak to our advisor

Enter Value

Popular Posts

Trending Articles

Corporate Office : Mahindra Insurance Brokers Ltd ( A Mahindra Group Company ) Sadhana House, Ground Floor, 570 P. B. Marg, Behind Mahindra Towers, Worli, Mumbai 400018.

Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).

Insurance is the subject matter of solicitation.

For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.

Copyright © 2022 Mahindra Insurance Brokers. All Right Reserved.

Get A Call Back
Get A Call Back