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Ist Floor, 38 N, Shree Balaji Tower Hisar
+91 98965-80000
by Anand Prakash Gupta
Car insurance in India comes in two forms: third-party (TP) liability-only policy and comprehensive policy. A third-party-only policy is mandatory, whereas a comprehensive policy is optional and more extensive. What is covered and what is not depends on which type of policy you are opting for. The third-party liability policy covers damage to others, whereas the comprehensive policy covers damage to your own vehicle as well, since it is more extensive.
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Car insurance is a contract with an insurance company for getting protection from any financial loss. The loss can be due to an accident, theft, or any damage to your vehicle. The insurer covers every cost from repair to liabilities in return for the premiums paid by you. In many places, insurance is often a mandatory legal requirement.
The process through which the car insurance or motor insurance works follows a process. Let us look at how the works:
| Aspect | Description |
| Contract | You pay a regular premium to an insurance provider in exchange for financial protection against specific risks. |
| Coverage | The insurer compensates for covered losses, such as vehicle repairs after an accident, property damage, or injuries caused to others if you are responsible. |
| Protection | Serves as a financial cushion, ensuring you don’t bear heavy expenses on your own in case of unexpected events. |
In the third-party policy, you get basic and legally mandatory protection that covers third-party bodily injury or death, and property damage caused by your car. This also includes a compulsory Personal Accident (PA) cover for the owner-driver. This coverage, however, does not include any coverage for the damages done to your own car, theft, or losses arising from any natural calamities like floods, earthquakes, or cyclones. It also excludes protection against any man-made incidents like riots, strikes, or vandalism, as well as damages due to any fire or explosions.
Comprehensive policy offers all the benefits of a third-party policy along with much broader protection. This covers damage to your own vehicles, theft, and losses due to both natural and manmade disasters. This kind of insurance has coverage for fire, explosions, and a mandatory Personal Accident (PA) cover for the owner-driver, making it a more complete and secure option for vehicle owners.
Most of the car insurance policies in India, including the comprehensive ones, come with some exclusions. For example, any damage or injury caused when driving under the influence of alcohol or drugs is not covered. Also, if any accident is caused while diving without a valid license, you will not get your claim. Any mechanical or electrical breakdown without an accident is also excluded. Normal wear and tear of the vehicle or its parts due to everyday vehicle use is not covered either.
If a private vehicle is used for commercial or illegal purposes, any damage arising from that will not be compensated. Damages to tubes or tyres of a car are also generally excluded unless they arise due to any accident. Consequential losses occurring indirectly due to an initial event, such as driving through waterlogged roads after flooding, are also not covered.
Lastly, any damage that takes place outside the geographical limits mentioned in the policy is excluded. Losses resulting from war, invasion, or nuclear risks are not covered.
Car insurance in India helps protect you from financial losses due to accidents, theft, or damage. A third-party car insurance policy is mandatory and covers the legal liabilities, while a comprehensive car insurance policy offers broader protection for your own vehicle, including protection for your own vehicle. However, most policies exclude damages caused by drunk driving, invalid licences, mechanical failures, normal wear and tear, or illegal use of vehicles. Understanding what’s covered and what’s not in car insurance helps you choose the right policy and avoid claim issues.
At Shree Balaji Insurance Brokers Pvt. Ltd. , you can compare and choose from a wide range of car insurance plans from top insurers with a balance of coverage and affordability. Protect your car and choose the best car insurance in India with SBIBPL.