What is vehicle insurance?
Vehicle insurance, also known as auto insurance or motor insurance, is a type of insurance designed to protect against the financial risks associated with vehicle damage. It covers a variety of vehicles, including cars, motorcycles, auto rickshaws, and commercial vehicles like trucks, buses, and taxis.
How does vehicle insurance work?
Vehicle insurance provides protection from various types of damages and losses, including:
- Accidents and Collisions: Covers damage caused by traffic collisions and accidents with other vehicles.
- Third-Party Claims: Protects against claims made by others for damage or injury caused by your vehicle.
- Natural Disasters and Weather-Related Incidents: Some policies include coverage for damages from natural disasters such as floods, storms, and earthquakes.
- Theft or Robbery: Covers losses due to theft or robbery of the vehicle or its contents.
- Physical Injuries: Includes coverage for physical injuries sustained by the driver or passengers in the event of an accident.
- Driver’s Death: Provides a payout in the unfortunate event of the driver’s death.
Benefits of vehicle insurance
Theft Protection: Covers losses due to theft or robbery of the vehicle and its contents.
Damage and Repair Costs: Covers expenses for damage and repairs from accidents, crashes, and natural disasters.
Third-Party Liability: Protects you from the financial burden of third-party claims, which can be complex and costly to resolve.
Death Benefits: Provides financial support to the family in case of the driver’s death.
Different types of vehicle insurance
Third-party insurance
This insurance covers damage or injury caused to a third party by your vehicle. It does not cover any damage to your own vehicle or injuries to the driver. It typically has a lower premium compared to other types of insurance.
Own damage insurance
This policy covers losses due to theft, natural disasters, man-made incidents like vandalism and riots, and accidental damage. It includes repair costs and personal property loss in the event of an accident.
Comprehensive damage insurance
This is an all-inclusive policy that covers both third-party liabilities and own damage. It offers extensive protection but comes with a higher premium and deductible.
Collision insurance
This insurance covers damage to your vehicle caused by a collision with another vehicle or an immovable object. It also covers damage from potholes or vehicle rollovers but does not cover mechanical breakdowns or wear and tear.
Additional Coverage Options
- Glass Insurance: Covers damage to the glass of rear/side windows and sunroofs.
- Engine Protector Cover: Covers repair costs for engine damage due to flooding or oil leaks.
- Consumable Cover: Covers the cost of consumable items like washers, air conditioning gas, bearings, engine oil, and fuel filters.
- Gap Insurance: Also known as depreciation cover, it covers the depreciation cost (the difference between the original price and the current market value) at the time of the claim.