Whether it be auto insurance, a retirement annuity, or funeral coverage, the majority of us carry some kind of insurance policy.

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Insurance can protect you against costs and liabilities if you are involved in a crash or your vehicle is stolen or damaged

Vehicle Insurance

In today’s hectic world, most people would rather commute in their own car than rely on public transportation. Owning a car allows for the flexibility to go wherever, whenever, and however one pleases. However, in order to protect this freedom from any unforeseen loss or damage, the car must be insured.

In addition to paying for damage to your car, vehicle insurance protects you from legal issues and third-party liability costs. Therefore, it’s crucial to get a comprehensive coverage to cover any type of car damage.

Type of vehicle insurance

The kind of coverage that different types of auto insurance policies offer allows for further differentiation. The following types of automobile insurance coverage fall under this category:

A. Third-party liability-only policy

This policy covers any third-party financial responsibilities you may incur in the situations listed below:

  • If your vehicle results in someone's death
  • If you cause physical harm to anyone with your vehicle
  • If you mistreat someone else's property in any way

In any of the aforementioned scenarios, you would be held financially liable for the third party’s loss. An insurance policy for third party liability takes care of this financial responsibility and pays the third party on your behalf. According to the regulations of the Motor Vehicles Act of 1988, a third-party insurance policy is required. In order to adequately recompense any third person injured by a vehicle, every vehicle in India is obliged to have this basic insurance coverage.

B. Comprehensive insurance policy

Despite being required and covering any third-party liability, the third-party policy does not protect you from financial loss if the car is destroyed or stolen. You are responsible for covering the financial burden of the vehicle’s damage or theft in such circumstances. However, a complete policy comes to your aid and offers protection against any damages the vehicle may sustain. Own damage cover is the term for this. The mandatory third-party liability as well as the monetary damage incurred in the following situations are both covered by a comprehensive vehicle insurance policy:

  • When a vehicle gets damaged by a natural disaster, such as an earthquake, flood, hurricane, or cyclone.
  • When the vehicle is harmed by human-caused events like fire, rioting, strikes, malicious destruction, etc.
  • If the vehicle is harmed while being transported by air, land, or sea
  • Once the vehicle has been stolen

A comprehensive policy therefore offers the vehicle complete coverage.

C. Standalone own damage insurance policy

Own damage (OD) refers to harm you have caused to yourself (in this case, car). Your insurance coverage will pay the cost of repairing your car if it has an OD part. A stand-alone own damage (OD) policy is another name for such a policy. On the other hand, a policy that just covers your debt to a third party and has no own damage coverage is referred to as “third party liability insurance.” Therefore, if you inadvertently rear-end your neighbor’s automobile and both cars are damaged, your insurance will pay for his car’s repairs, but you’ll have to pay for your own. A comprehensive policy is one that includes both the own damage (OD) and third party liability (TP) portions.

When your insurance may not cover you

You might not be covered by your policy, or it might only cover you in part, if you fall under any of the following circumstances:

  • Driving was being done by a non-policyholder.
  • Unless it is on a costs-only basis, you charge a passenger for a lift.
  • It's unsafe to drive your vehicle.
  • Even if you weren't aware that the vehicle was stolen, you still bought it.
  • Driving a vehicle without insurance, or allowing someone else to drive one, is illegal while doing so while operating someone else's vehicle.
  • You lack a current driver's license.
  • According to your insurance company, you contributed to the accident.
  • You may be able to recover some of the additional expenses you incurred from the other motorist, such as vehicle rental.
  • You may be eligible for compensation under the Financial Services Compensation Scheme if your insurance has filed for bankruptcy.