Car Insurance in India & Policy Types

Car/Auto insurance is type of insurance which covers the liability of both third party and own damage, damage to the car parts,  medical expenses etc., in case of damages arising from an accident, theft, fire, cyclone, flood, earthquake etc.

According to the law every car should have a valid car insurance policy. Car insurance policies are valid only for a year and we need to be renew it annually. In auto insurance, insurer charges according to the tariff rates. No insurer can charge lower rates than the tariff rates and no insurer could also give extra benefits than those prescribed by the tariff.

Types of Auto/Car Insurance Policies

  1. Act Liability Policy
  2. Third Party Policy
  3. Comprehensive Policy

Act Liability Policies: Act Insurance policies are only limited to the body injury and death of the third party.

Third Party Policy: This type of policy covers the liabilities of the damage of property of third party, personal injuries and death. This policy indemnifies the insured against his legal liability in respect of damage to property of third parties over and above 2,000. The limit of liability is as follows

  • Private car: Unlimited
  • Motor Cycle: Unlimited
  • Goods and passenger carrying vehicle – Rs. 20,000,
  • Other miscellaneous or special type of vehicle: Rs. 50,000.

Comprehensive Policy: This type of policy offers complete coverage for both third party and own damage liability.

The comprehensive policy covers the following risks:

  • Third party liabilities
  • In case of accident , it covers damage of own vehicle and the other party’s vehicle
  • Damage to car parts and body.
  • Charges of repair
  • Medical Expenses etc.

At the payment of extra premium, the following risks are also covered

  • Death or injury to family members who are above 16 years and below 65 years
  • Theft, strikes, Riots etc.

To take the auto/Car insurance, fill up a proposal form. This form is divided into three parts i.e.

  1. Identification of Vehicle: Give your vehicle’s registered number, size, model etc.
  2. Risk Information: Give details of policies taken in past, equipments etc.
  3. Declaration: Give your declaration that information given by you is true.