You and we use many types of vehicles daily to go from one place to another and to travel and roam around. And while traveling there are many types of dangers on the road. Vehicle insurance helps us financially in case of such perils or accidents.
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What is vehicle insurance?
Vehicle insurance is also known as motor insurance or vehicle insurance. In this type of insurance, all types of vehicles are insured, including private vehicles, four wheelers and two wheelers and commercial vehicles etc.
Vehicle insurance provides financial assistance to you in case of an accident with your vehicle, theft, or other cases related to the loss of your vehicle. If you get any kind of injury during a vehicle accident then that too is covered under this insurance.
Under vehicle insurance, if there is any damage, accident, or theft with your insured vehicle, then you are paid by the insurance company.
How does vehicle insurance work?
It is a contract between the insurance company and the motor owner. Under which the insurance company compensates your vehicle and the loss caused to you in case of an accident of your vehicle.
For example, you have bought a new vehicle and you have got vehicle insurance for that vehicle. So in such a situation if you have an accident with your vehicle. The insurance company then covers you for the loss of your vehicle and the injuries you suffer. and pays you for your losses and injuries.
Apart from this, under third party insurance in vehicle insurance policy, financial assistance is also provided to third party property, pedestrian to save the loss of the insured vehicle in the accident.
Types of Vehicle Insurance Cover
There are two types of cover in vehicle insurance. which is like this:
Third Party Insurance
Third party accident insurance covers damages caused to a third party. This type of insurance covers the damage caused to the property of a third party person caused by your insured vehicle.
According to the Third Party Act, it is mandatory to pay compensation to the third party for any damage caused to the property of a third party such as serious injury, disability, or death in an accident.
Under the Indian Motor Vehicles Act 1988, it is necessary to have a liability insurance policy to drive a vehicle on the road. If a third party person suffers damage (injury or damage to his/her property) and makes a claim for that damage, you have to compensate him/her for the damage.
The amount of damages caused to the third party person is decided by the court. Hence, third party insurance pays for the damages caused by the third party on your behalf. It does not cover damage to the insured vehicles.
Comprehensive Insurance or Package Policy
This vehicle insurance covers the damage caused by your vehicle to the property of a third party. It covers death or disability of the driver, vehicle owner and passengers in case of an accident involving the insured vehicle.
Instead of taking third party insurance, you should take comprehensive insurance or package policy as it provides cover for your vehicle along with your third party insurance. Your premium in this policy depends on the type of vehicle and it also depends on the extent of your damage.
Types of Vehicle Insurance
Vehicle insurance is necessary to compensate for the loss of the vehicle due to theft and vehicle accident. There are three types of vehicle insurance, which are as follows:
Two Wheeler Insurance
As it is clear from the name of this insurance, this insurance is done for two wheelers. Like scooter, bike, scooty etc. This insurance covers any damages caused to the two wheeler drivers. It is up to you to take a package policy or a third party policy while buying a new 2 wheeler vehicle.
Car Insurance
This insurance is for private cars. It is also called four wheeler insurance. Car insurance If there is an accident in your car, then under this insurance, the damage caused to your car, car driver and any third party is covered. Under the Indian Motor Vehicle Act, if a person buys a new car or four wheeler, then he is required to take third party insurance for 3 years.
Commercial Vehicle Insurance
Commercial vehicle insurance is clear from the name itself that this type of insurance is done for commercial vehicles. This insurance is designed for traders who have more than one vehicle to run their business. Which are used to carry goods or passengers from one place to another.
In this type of insurance, more than one vehicle is insured. This insurance compensates if the vehicle is stolen or the vehicle is damaged in an accident. Along with this, it also compensates for the loss caused by the third party in the vehicle accident.
Vehicle Insurance Benefits
- If a person or driver dies in a vehicle accident, the insurance company pays a lump sum amount to the beneficiary or family of that person.
- If there is any kind of damage to your vehicle in an accident or accident, then that damage is covered by the insurance company.
- If your insured vehicle causes any damage to a third party person or his property, then that damage is compensated by the insurance company. The insurance company keeps you free from legal liabilities.
- In an accident, you get hurt or you are seriously injured, then the insurance company pays for your hospital expenses and your other medical expenses.
What is covered by auto insurance?
By purchasing vehicle insurance, we get many types of covers. Following are the vehicle insurance covers:
- Theft, accidents, riots, terrorism and natural calamities etc. are covered.
- Man-made calamity How damages caused to your vehicle due to fire, flood, storm, earthquake and explosion etc. are covered.
- In personal accident insurance, the insurance company covers the medical expenses of the driver of the vehicle in case of an accident. Which is most important after any person’s accident.
- Third party vehicle insurance also covers damage to any third party property such as death and injuries to someone.
What is not covered by auto insurance?
- If the vehicle driver i.e. the driver does not have a valid license and he commits any kind of accident then no claim is accepted by the insurance company.
- There is no claim for wear and tear due to aging of the vehicle.
- If a vehicle is involved in illegal activities, then the accident that happens to that vehicle is covered.
- Breakdown of electrical and mechanical parts are not covered by vehicle insurance.
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