Different Types of Motor Insurance Policies
The main motive of motor insurance is to protect you against risk of loss or damage. According to Indian Motor Vehicle Act, all vehicles should have insurance. Driving an uninsured vehicle on the road is a criminal offence. One can either opt for a comprehensive cover or a third party insurance. In situation, where the owner of the vehicle has dedicatedly paid his/her insurance premium, the insurance company is liable to reimburse the insured, subject to certain conditions and limitations.
In case where the vehicle is stolen, the liability of the insurer is limited to the current market value of the vehicle or sum insured, any of which is lesser than the other. Market price is associated with the valuation of vehicle before the occurrence of theft. This facility is also appropriate in case of vehicles which have been damaged by accident to the degree past repair or beyond economic repair. According to the Thumb Rule, insures have the right to decide or consider the total losses incurred after accident, in case when the repair costs exceed 50% of the Insured’s Estimated Value or sum insured of the vehicle policy.
Let us look at some of the Different Type of Policies
Third-Party only Policies
The reason motor cover is introduced by law is to ensure that road users are protected from any damaged caused by the driver of the car. The most common type of motor insurance policy is third-party only cover, and it provides minimum protection against damage you are responsible for other people, their vehicles and their possessions.
Third-Party, Fire, and Theft
Comprehensive Car Insurance
This type of policy will shield you from damage caused to your own vehicle, as well as other people on the road, even in case the accident is your fault if the blame cannot be justified.