Automotive

What is typically covered under motor insurance?

Buying a vehicle, especially in India, is a remarkable achievement in one’s life! Whether traveling for a vacation, a day outing, to a grocery store, or to the workplace, Indians unanimously prefer two-wheelers or four-wheelers as their mode of transport.

As a result, there’s been a significant rise in the number of vehicles and motorists over the years. Given the need for safety on the road, the Government of India established the Motor Vehicles Act of 1988. According to this law, every private and commercial vehicle owner in India should mandatorily have motor insurance in place. 

The law primarily aims at protecting vehicle owners from self as well as property damage, at times of unforeseen circumstances. It provides financial aid to policyholders and their families in the event of accidental damages or death. Overall, it ensures the safety of others and the vehicle owners.

Seeking to learn more about motor vehicle insurance?

Keep reading till the end as this blog will cover what is motor vehicle insurance, what is covered and not covered under the insurance policy, what are the different types of motor vehicle insurance, and why one should invest in it. 

What is motor vehicle insurance?

Motor vehicle insurance, also known as car and auto insurance, can be purchased for all types of vehicles such as cars, trucks, two-wheelers, and other private or commercial vehicles. It provides financial protection to vehicles and their parts against losses or damages caused due to traffic collisions, natural disasters, thefts, man-made calamities, etc. Typically, the insurance policy covers accidental damages caused to vehicle owners while driving, passengers, and third-party legal liabilities.

What is covered under a motor insurance policy?

A motor insurance policy covers a vast array of damages caused to the insured vehicle due to:

●      External means

●      Natural disasters like cyclones, earthquakes, floods, etc.

●      Man-made damages like theft, riots, explosions, etc.

Apart from these, you may opt for personal accident coverage in which the insurer bears the cost of medical treatments required by the driver due to any eventuality while driving. 

The policy even covers the legal liabilities of vehicle owners, paying compensation for accidental damages caused to any third-party motor vehicle as well as death or injury caused to any third-party.

What is not covered in a motor insurance policy?

Damages that are not insured under a motor vehicle insurance cover include:

●      Wear and tear of the vehicle or its parts due to prolonged usage.

●      Mechanical breakdown of the motor vehicle.

●      Loss or damage caused by wars or nuclear risks.

●      Damages attributable to racing or speed testing.

●      Loss or damage occurred outside the insured geographical area.

●      Damages incurred to the vehicle’s tubes or tires.

●      Deliberate damage or loss.

●      Loss or damage caused to the insured vehicle by an unauthorized person without a valid license.

●      Using the insured vehicle against the usage restrictions.

●      Loss or damage caused due to rash driving or driving under intoxication.

Although these are the loss or damages that are usually not covered by motor insurance companies, the coverage terms and conditions may vary from insurer to insurer. 

What are the types of motor insurance policies?

Mainly, there are three types of motor vehicle insurance coverage – private car insurance, two-wheeler insurance, and commercial vehicle insurance. 

●      Private Car Insurance: Purchasing a private car insurance policy will not only let you protect yourself and your vehicle but also your family members. This motor vehicle insurance policy safeguards vehicles against damages incurred by natural calamities like earthquakes, floods, road accidents, etc., and insures vehicle owners against liabilities like third-party damage or physical injury.

●      Two-wheeler Insurance: Just like private car insurance, two-wheeler insurance policies provide personal accident and third-party liability cover to two-wheeler motor vehicles. 

      Commercial Vehicle Insurance: As the name implies, this insurance coverage provides financial protection to commercial vehicles and vehicle owners. Owners operating vehicles like cars, trucks, taxis, etc., for commercial purposes should mandatorily have this insurance in place. Commercial vehicle insurance policies protect transport businesses and their owners from liabilities, losses, and damages caused to their vehicles due to accidents, natural disasters, or man-made calamities.

      Third-party Insurance: This insurance policy only covers damages or losses caused to a third-party vehicle or a third-party person. 

●      Comprehensive Insurance: This is a valuable vehicle insurance policy as it covers extended benefits to the damages incurred on insured vehicles and their owners as well as third-party liability.

Why invest in motor vehicle insurance?

A motor insurance policy will ensure:

●      Paying hefty medical expenses incurred on you due to physical injuries caused by a road accident.

●      Paying legal fees if you are sued for causing damages to a third-party vehicle or third-party person.

●      Paying repair costs if your vehicle suffers damage or loss due to theft, natural calamity, etc.

●      Paying compensation to your family in the event of accidental death. 

Final Words

So, now that you have read the entire blog, you know what is covered under a motor insurance policy and why you should invest in it. Just ensure to choose the right insurance policy for your vehicle. With the most suitable motor vehicle policy in place, you can enjoy stress-free driving!