The different types of car insurance policies in India – Explained
Car insurance is the most sought after insurance product in the Indian market due to the Motor insurance act which makes at least third party car insurance compulsory to ply in the public places. Most of the people have good knowledge of car insurance in India and are able to compare and decide the premiums before taking a car insurance policy.
A car insurance policy has two main types, namely: - Third party car insurance and Comprehensive Car insurance. Let us understand each of them to enable us to select the best type of car insurance. These types of car insurance can be opted both for the new car as well as the old car.
1. Third Party Car insurance:
Third party car insurance or “Liability only” car insurance or “Act only” car insurance is the compulsory car insurance in India as per the Motor Vehicles Act. Any party other than the insurance company and the customer of the car is referred to as third party, hence the name third party car insurance.
The death, disability and the damage to goods or property of the third party is covered under the TP policy of the car insurance. The claim amount in case of Third party claims would be decided by the honourable courts and direct the insurance companies to settle the claim amount to the third parties on behalf of the car owner. This is the basic type of car insurance policy available in India and is compulsorily to be taken for any car to ply in public places.
The premium to be paid under the Third party type of insurance policy is decided by the Governing body for insurance, IRDA known as Insurance Regulatory and Development Authority of India. The car insurance rates in the Third party premium type of car insurance are subject to be revised each year depending on the loss ratio and other factors which are decided by the IRDA.
2. Comprehensive Insurance:
The other type of car insurance policy in India is the “Comprehensive Car Insurance” which includes the Own damage section as well as the Third party section. The Own damage section covers any loss or repairs to the car owned by the insured due to an insured peril.
The premium to be paid by the customer under the own damage section is decided by the insurance company unlike the third party insurance premium which is decided by the IRDA. The own damage premium rates are given by the IRDA and the insurance companies can decide the premium within those rates.
Insurance companies take utmost care while deciding the premium rates for own damage type of car insurance such that too high price may result in failure of the product and too less price might impact the profits of the insurance company.
3. Comprehensive with add-ons:
The other type of car insurance in India is the comprehensive car insurance with add-ons such as Zero depreciation, Consumables, Engine protection etc. The most common type of add-on opted by the car insurance customer is the Zero Depreciation cover along with the comprehensive car insurance policy.
The “Zero depreciation” car insurance policy is also known as “Nil Depreciation” or “Bumper to Bumper” car insurance in India. This type of car insurance in India can be termed as the total coverage for car as the zero depreciation add-on enables the insurance companies to pay the complete claim amount without factoring depreciation. Bumper to bumper car insurance is an add-on or rider available under the own damage section of the car insurance policy.
These are all the types of car insurance in India and the customer can choose any type of car insurance depending upon his/her premium paying capacity, requirement, coverage etc. Car insurance renewal tips: The car insurance renewal quote should contain the extra coverage in the form of add-ons such as Bumper to bumper, Consumables etc., at a reasonable premium.
For best types of car insurance in India please visit www.policybachat.com and select the best car insurance type from the top general insurance companies.