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A Quick Guide to Motor Insurance

Updated: Jan 19

Table of Content:

  • Introduction

  • So, What Is Motor Insurance?

  • A Glance at Motor Insurance Types

  • Motor Insurance Based on Vehicle Type

  • Motor Insurance Based on Coverage

  • Motor Insurance - The Need of the Hour

  • Calculating Car Insurance

  • What Does Motor Insurance Cover?

  • What Motor Insurance Does Not Cover?

  • Factors Affecting Motor Insurance Policy Premium

  • Tips to Reduce Motor Insurance Policy Premium

  • How to Buy Motor Insurance Policy in India?

  • Conclusion


Motor Insurance

Introduction

Motor insurance, also known as automobile insurance, is a type of coverage that offers financial protection against vehicle-related damages. Given its importance, understanding motor insurance – its types, benefits, and other related aspects – is crucial for every vehicle owner.

So, What Is Motor Insurance?

Motor insurance, in its simplest sense, is a financial shield that protects your vehicle from potential risks. It offers financial security against damages resulting from accidents, theft, and other threats. Notably, in India, motor insurance is mandatory, which means driving a vehicle without an insurance policy is considered unlawful.


A Glance at Motor Insurance Types

Motor insurance can be classified into several types based on the vehicle it covers and the extent of coverage. Let's delve deeper into the different types of motor insurance policies.

Motor Insurance Based on Vehicle Type

  • Private Car Insurance

A private car insurance policy is designed for personal car owners who use their vehicles for personal purposes.

  • Commercial Car Insurance

This type of insurance is meant for individuals who own taxis or use their vehicles for commercial purposes.

Motor Insurance Based on Coverage
  • Third-Party Car Insurance Policy

As per the Motor Vehicles Act of 2019, availing a Third-Party Cover is mandatory. This policy offers coverage against legal liabilities caused to a third party due to your vehicle.

  • Own Damage Car Insurance Policy

An Own Damage car insurance policy helps you stay covered against the damages caused to your car due to accidents, fire, theft, etc.

  • Comprehensive Car Insurance Policy

A comprehensive car insurance policy offers the benefits of both Third Party Liability cover and Own Damage coverage.

Motor Insurance - The Need of the Hour

With the recent update in the Motor Vehicle Act 2019, it's essential to understand the various aspects of motor insurance. It's more than a legal requirement; it's an investment for your future.


Calculating Car Insurance

Choosing the right insurance policy isn't just about understanding the types and benefits. It's also about calculating the premium and understanding the factors that affect it. A car insurance calculator can be a useful tool here.

What Does Motor Insurance Cover?

Motor insurance typically covers:

  • Damages caused due to natural and man-made calamities

  • Theft or malicious acts

  • Third-party liability

  • Personal accident cover for the driver

What Motor Insurance Does Not Cover?

Motor insurance usually does not cover:

  • Ageing, wear and tear of the vehicle

  • Mechanical or electrical breakdown

  • Damage caused under the influence of alcohol, drugs and other intoxicating substances

  • Damage caused by the driver without a valid driving license

  • Consequential loss

Factors Affecting Motor Insurance Policy Premium

Various factors influence the motor insurance policy premium, including the type of insurance premium, car model, RTO, Insured Declared Value, age, and claim history.

Tips to Reduce Motor Insurance Policy Premium

Although everyone wants to reduce the insurance premium, it's essential not to compromise on coverage. Here are a few tips to reduce the premium for a motor insurance policy without compromising on the insurance coverage.

How to Buy Motor Insurance Policy in India?

There are two modes of buying a motor insurance policy in India: online mode and offline mode.


Conclusion

Understanding motor insurance is crucial for every vehicle owner. This guide provides a comprehensive overview of motor insurance, its types, coverage, exclusions, and more. Remember to always choose a policy that suits your needs and requirements. After all, insurance is not just about fulfilling a legal obligation, but it's about securing your financial future.




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