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Tata Capital > Blog > Insurance > Types Of Car Insurance Coverage Available In India

Insurance

Types Of Car Insurance Coverage Available In India

Types Of Car Insurance Coverage Available In India

Introduction

As per the World Health Organization, nearly 1.3 million lives are lost as a result of road accidents every year. Another 20-50 million people suffer injuries, sometimes even leading to permanent disabilities.

These accidents come with high costs for both the driver and any passenger affected by the accident. Further, the damage to the vehicles is also expensive – sometimes even requiring entire parts to be replaced. 

Even while exercising a lot of caution, one’s car could be damaged due to unexpected contingencies such as natural disasters, breakdowns, etc. One must be prepared for such instances, by opting for various car insurance covers, so that at least the financial aspect of the problem is taken care of.

Before looking at the different types of car insurance coverage available in India, let’s look at the terminology used in motor insurance in India:

First Party – the policyholder who is the owner of the vehicle

Second Party – the insurance provider 

Third Party – the person to whom the first party owes damages in case of an accident

Types of Car Insurance Coverage in India

Different types of car insurance coverages are available in India, that protect different parties in an incident. The basic coverage can be enhanced by choosing add-ons. Here are the basic types of car insurance plans available in India:

Third-Party Liability-only Coverage

This type of coverage pays for any liability arising from the death of a third party involved in an accident, medical expenses for treatment of an injury to the third party and the cost of repairing the vehicle of the third party involved in the incident.

This cover is mandatory in India for all vehicle owners as per the Motor Vehicles Act and if one is caught driving without one, it could lead to heavy penalties and even imprisonment for up to 3 months. 

Own Damage (OD) or Collision Damage Coverage

This coverage pays for the repair/replacement of parts of one’s vehicle when it has been damaged in an accident.

The amount of the cover is decided based on its Insured Declared Value (IDV) – which is the current market price of the vehicle. It is the ex-showroom price of the vehicle minus the depreciation value. 

Though it is mandatory as per the Motor Vehicles Act of 2019, coverage is generally required if the car is purchased via financing options. 

Personal Accident Cover

Personal accident insurance covers one’s medical expenses on getting injured in a car accident. It also reimburses one due to loss of work.  

Comprehensive Car Insurance

This comprehensive insurance gives the highest form of protection and includes all third-party liabilities, collision damage and personal accident coverage. It also covers non-collision damage such as due to disasters – flooding, storms, etc. 

This cover can be enhanced with greater cover and more protection through the purchase of add-ons. 

Zero Depreciation Insurance   

This is usually an add-on to collision damage cover. In case of an accident, the repair reimbursements are capped at the Insured Declared Value (IDV) of the vehicle which includes its depreciation.  

However, a zero depreciation cover allows one to claim the full market price of the vehicle without any depreciation. 

Types of Car Insurance Policies Offered by TATA Capital

Tata Capital offers three types of Car Insurance policies:

Third-Party Coverage 

This cover is mandatory for all car owners in the country. This provides cover against any death liabilities, medical expenses and vehicle damage to the third party involved in an accident. 

Own Damage Coverage

This is a standalone cover against damage to one’s car while driving.

Comprehensive Coverage

This provides all-inclusive cover against a third party and collision damage to the policyholder’s car. One can also buy add-ons to protect engines, tyres, keys, etc. to provide a wholesome cover to one’s car. Roadside assistance cover, daily assistance cover and emergency transport are also some of the beneficial extras that one can add to their comprehensive cover for assistance post/during an accident.

Conclusion

Insurance companies also come up with additional benefits to reward responsible driving behaviour. E.g. the No Claim Bonus is a reward of a percentage reduction in insurance premiums in the subsequent year, if one doesn’t file a single insurance claim in the previous one.

For more information, check out the Tata Capital Motor Insurance products and add-ons from time to time to avail of well-rounded protection for one’s vehicle, the driver and others on the road.

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