What is Motor Insurance.??

Owning a vehicle is a pricey thing that someone purchases for his family or himself. Some proud owners take Loans from banks to have the pleasure of having their own travelling convenience. Vehicles are such objects though being expensive they  can’t  be kept in some locker or at some secret place to hide away from thief’s or external elements.  This brings up to a major challenge of providing safety and protection to your Vehicle from Theft or external damages or some Natural Calamities  so that you don’t end up losing all the money that you have invested in being a proud owner of your Vehicle.  To Save you from these damages Motor Insurance companies have come up where they charge you some nominal amount annually and in return they provide safety/ Insurance to your Vehicle.

Let’s Learn More about the Vehicle Insurance Policy.

Is Motor Insurance Mandatory?

Yes,in most parts of the world it is mandatory to have at least third-party policy coverage before you acquire your vehicle and start driving it on the roads.

What does the Insurance policy covers?

Motor insurance policy, you will be usually covered against the following for your vehicles :

  • Damages and losses, resulting from natural calamities such as earthquake, floods, fire, lightning, landslide, hurricane, etc.
  • Damages that result from human intervention, including burglary, theft, riots, strike or any other activity born of malicious intent.
  • Third-party legal liabilities owing to damages (both bodily injuries and death) caused to third-party as well as financial losses to a third-party property.

Types of Insurance for Your Cars and Bikes

Car Insurance are categorized into two major types  Comprehensive and Third Party Insurance.

COMPREHENSIVE INSURANCE covers third-party liability along with  other types of damage that may occur to the car. It will cover theft, damage due to accidents, fire, explosions, or natural calamities, and third-party liability.

Third -Party LIABILITY covers any damage caused by your car to a Third-Party vehicle or property; and injuries to a third-party person.

This Brings us to another important question: how much will the Insurance Company Pay for your Bike or Car during the losses.

The insurance coverage amount of  vehicles are Usually insured at a fixed Insured Declared Value (IDV). In other terms, IDV is higher for the new vehicle and less for older. As the Age of your vehicle increases the IDV value of your vehicle decreases.

Factors that decide the premiums for your motor insurance.

Lets Understand some of the major factors that affect motor insurance premiums that can lead you to make an informed decision while choosing an Insurance policy for your vehicle.

  • Type of Insurance Coverage :

As Discussed above no vehicle can play on road with our a third party Insurance policy so if you opt for Comprehensive Insurance policy for your Vehicle you must need to have a Third party policy too. Thus a comprehensive policy would attach higher premiums as opposed to its third-party counterpart.

  • No Claim Bonus:

No Claim Bonus (NCB) is the reward that insurance companies provide you for driving  responsibly year round and not filing for damages.

  • Installed After Market Accessories

Upgrading your Vehicle with aftermarket Accessories or bringing up some changes to your Vehicle that was not listed by the Manufacturer will attract some extra amount to your insurance premium.

For instance if you have installed an after Market  CNG Kit to your car then this is needed to be informed to your Insurance provider along with the RTO.

Now Let’s Understand the Features of each type of insurance policy


Third-Party Car Insurance Policy

  • Affordable – You can purchase the cheapest policy in the market by covering third-party liability only
  • Covers Bodily Injury and Death – The insurance policy will cover the bodily injuries and death of the third party
  • Covers the Property Damage – The damage of vehicle or property of the third party will be covered by the insurance policy
  • Fulfils Legal Obligation – The insurance plan will fulfil the legal obligation in the best possible way
  • Suitable for Old Vehicles – If you are buying an insurance policy for an old vehicle whose market value is less than the repair/replacement cost, you will be benefited by the third party liability plan

Drawback of third Party Insurance: 

  • Will not Cover Own Vehicle Damage – The drawback of the policy is that it will not cover the own vehicle damage. 
  • Will Not cover Theft of your vehicle or damage caused due to some Natural Calamities,

Comprehensive Insurance Policy

  • Comprehensive Policy comes with a wide range of coverage options to opt .
  • It includes the accidental damages to the third-party
  • Covers vehicle collision and other risk factors
  • Damage due to manmade and natural disasters are covered by the policy
  • This is the highest form of insurance plan that you can buy from a car insurance company
  • Protection against damage from accidents even though you are at fault
  • You can subscribe to additional riders to enhance the insurance cover
  • Complete protection for the vehicle including theft

Motor Insurance Firms Provides Some Add-on Insurance Cover for the Vehicle

The following are few of the add-ons that  can be included as per your needs to get optimum protection for your car:

  • Roadside Assistance – If your vehicle stops in the middle of the road, the insurance company will come to your rescue. You will get assistance so that the vehicle can be moved to the nearest service station very easily.
  • Nil Depreciation/Zero Deoriciation  Cover – zero depreciation cover will help you get maximum compensation for your car. The vehicle will be insured to the invoice price so that there will be no loss.

Buying a Motor insurance gives you  peace of mind as you know you’ve someone who will take care of your vehicle in case of any theft or damages occurred.