How Car Insurance Work In India?

How Car Insurance Work In India? With the process of claiming Car Insurance getting better, it is now possible to get your vehicle repaired and ask the insurer to pay for it using your insurance policy. Here’s all you need to know.

The first thing you must do is to go through the insurance company’s preferred garages and get the repairs done at one of them. The insurance company will then pay for the repairs minus the items not covered under the policy, which will have to be paid by the owner of the vehicle, which is you. This is known as a cashless claim.

Types of Vehicle Insurances

There are two types of Vehicle Insurances – Comprehensive and Third Party

Comprehensive Insurance

As the name suggests, a comprehensive insurance plan helps ensure the vehicle against any risk arising out of theft or damage to the vehicle, death of the driver and/or passengers in the vehicle during an accident, and damage caused by the vehicle to other people or property.

Coverage with Comprehensive Insurance

Comprehensive Insurance ensures the vehicle against:
Natural calamities
E.g. Earthquakes, floods, typhoons etc.
Man-made calamities
E.g. Burglary, thefts, riots, strikes etc.
Personal accident cover
Provides personal accident cover for the individual owner-driver and passengers of the insured vehicle while travelling in, mounting, or dismounting from the vehicle.

Third Party Insurance

Third Party insurance only covers the damage done by your vehicle to other vehicle or property. It does not cover accidents, theft or damage to the vehicle.

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Coverage using Third Party Insurance

Third party legal liability coverage protects you against legal liability arising due to accidental damages, such as:
  • Any permanent injury/death of a person
  • Any damage caused to the property
  • Caused while anyone is driving the insured vehicle

Both kinds of insurance covers are valid for only a year. They need to be renewed every year. The premium of the insurance depends on certain parameters like vehicle classification, value etc.

Car Insurance Clauses

There are some clauses which are a part of your Car Insurance that you need to be aware of. You won’t be able to claim for any damages occurring to the insured vehicle because of:
  • Wear & tear or general ageing of the vehicle
  • Depreciation or any consequential loss
  • Mechanical/electrical breakdown
  • Wear and tear of consumables like tires and tubes
  • The insured vehicle being used for purposes other than mentioned in the limitations of usage in the insurance agreement
  • A vehicle being used outside the geographical boundaries of India
  • A person driving any vehicle without a valid license
  • A person driving the vehicle under the influence of drugs or liquor
  • Loss/damage encountered due to war, mutiny or nuclear risk

Claiming Insurance

In case you are involved in an accident or you accidentally bang your car somewhere which causes some damages to your vehicle, you can claim insurance.

To claim insurance, you need to:

  • Note the licence plate number of the other vehicle involved in the accident (if any)
  • Note names and contact numbers of witnesses (if any)
  • Call the insurance company and file a claim.
  • Make a note of the claim reference number given and the list of documents required for claim processing.
  • Check whether the insurance company has a preferred garage list and make a note of the same.
  • File an FIR at the nearest police station in case of property damage, bodily injury, theft, or major damages.
  • Submit the documents to the insurance company’s representative and verify it with the originals.
  • Make any additional payments required to the garage if the insurance company does not cover the complete repair expenses.

Advantages Of Cashless Claims

  • Responsibility lies with the insurance company
  • The surveyor would take the car to the garage, get it repaired and return it back to the owner
  • The company’ garage network is generally reliable
  • The service provided by them is much better than any other local garage

Disadvantages Of Cashless Claims

  • A lot of formalities need to be followed before any action is taken
  • Often, the preparations are delayed since the surveyor may do the complete inspection before taking any decisions
  • The garage, which the insurance company chooses might be expensive and since the owner has to pay some percentage of the expenses, he may end up shelling out more money than estimated.

Advantages Of Reimbursement Claims

  • You can get your car repaired at your preferred garage by your trustworthy mechanic
  • Immediate action can be taken just after the inspection
  • The expenses may be within your budget
  • You may also get to repair other parts of the vehicle which were not damaged at the time of an accident, if required

Disadvantages Of Reimbursement Claims

  • Responsibility is entirely yours
  • Repairs done by local garages may not be dependable
Now that you know all the necessary details about Car Insurance plans, it’s time to secure the car of your dreams using the cover it deserves.