Car insurance involves securing your car against unforeseen circumstances. The way we opt for life insurance plans, companies also offer car insurance plans to financially cover possible damages to your car in the future. The primary use of a car insurance policy is to provide protection against losses incurred due to accidents or other unfortunate circumstances.
So how does car insurance work? The insured person pays stipulated premiums to the insurance company, which in turn covers the financial losses involving the car, for the duration of the policy. Car insurance covers aspects such as bodily damages, property damage liability, uninsured motorist coverage, medical payment, collision coverage and others.
Vehicle insurance in India is mandatory according to the Motor Vehicle Act, 1988. This in fact is a wise decision made by the Government as society in general is the greater benefactor from such a rule.
Various companies in the market struggle to bring out the best car insurance plans. There are usually four types of car insurance covers- fully comprehensive auto insurance, third party insurance, specialised car insurance and third party-fire and theft insurance. Companies in India thus offer car insurance at four different levels, depending on the premium one pays for it.
Car insurance has several benefits. Take for example the third-party insurance policy. This involves a comparatively cheaper premium but insures your car when you are at fault and have collided and caused damage to a third party. With fully comprehensive car insurance, you are covered for all kinds of possible damages that your car may incur. Even though the premium one pays here is comparatively higher, it definitely is worth it. Third party fire and theft insurance covers the costs of your vehicle in case of a fire, a theft, or an accident. The benefit you get from this type of policy is that the insurance company is essentially paying up for a damage that you have caused! Cars that are 25 years or older also benefit from car insurance policies. With specialised car insurance, vintage cars are covered with a policy similar to the fully comprehensive plan, but since these cars' requirements are different, the plan also varies.
There will be several advantages that you get with car insurance policies, but make sure you go through its terms and conditions before opting for a particular one. Ensure that you take a policy that best fits your needs.