Types of car insurance Policy:
There is no legal rule that you must have insurance on every purchase you make but with the exception of automobile purchase. It is imperative that you insure your car as soon as you purchase it.
Based on the Motor Vehicles Act, 1988 every owner of a car must possess car insurance. It is compulsory for each and every owner of a car running on public roads must cover the cost with insurance. The policy should be able to cover the sum which the owner may become lawfully accountable to pay as compensation to third parties as a result of accidental death or bodily wound or equipment casualty to property. Also the owner is advised to carry the certificate of car insurance with him as a proof.
Basically there are two types of car insurance policy. They are Type I and Type II.
Type-I:
This type of insurance is better known as Third Party Insurance. This type of car insurance is compulsory. This policy covers the owner of the car against damage that may be caused to a third party's belongings or the third parties themselves.
Simply put if you run into another car and the collision results in damage to that car or its occupant or occupants, then a third party policy will pay the claim for medical bills of its occupants or for the repairs to the vehicle. This will also cover any passengers in your car but not you.
One disadvantage of this policy is that it does not cover the costs of your car repairs. But you can put in some riders to the policy so that it covers your legal liability for the compensation to be paid. Compensation paid arises when:
Type – II:
This is known as the comprehensive car insurance cover. This type of policy covers payment for third party compensation and wounds. The policy will payout when your car is being stolen of damaged due to fire. This policy also extends payout for any damage to your car irrespective of the fact of whose fault the accident occurred.
This policy covers loss or damage to the car and its
In addition to the coverage under liability only, this policy covers loss or damage to the insured vehicle and its add-ons due to explosion, burglary, self-ignition or lightning, fire, malicious act, riot and strike, earthquake, terrorist act, flood, hurricane, typhoon, storm and any other natural calamities not mentioned here.