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What Will Your Car Insurance Policy Cover

01 October, 2015

After narrowing down on the car of your choice, arranging the finance, and doing the paperwork, the most important thing that will bother you is choosing the right car insurance plan. To protect yourself from the costs of damages caused to your vehicle by accidents, natural disasters such as floods, storms, and earthquakes, or man-made calamities like riots, a car insurance policy is recommended.

Several general insurers offer car insurance plans in India for car owners. It is not just a legal mandate, but an essential instrument that will protect your vehicle from any kind of unfortunate incidents. This policy will protect your car against calamities like theft, accidents, and disasters such as floods, earthquake, and fire. It will extend Personal Accident policy cover that will cover injuries caused to family members and self during accident. Moreover, it will cover the damage caused to someone else’s property, car, or life.

There are two types of motor insurance available in the market – Third Party policy and Package policy. These policy are known to extend the following covers:

Third Party Policy:

This policy is available only for cover third-party liability. It will not cover any kind of damage caused to the car or its owner, but will extend cover for third party liabilities such as

  • Physical injury or death of third party during the accident

  • Property and vehicle damage of third party

  • Any kind of damage of life caused during the accident that will incur medical expenses, legal costs, or reimbursements

This is the cheapest of all policies as it extends cover only for third-party liability.

Package Policy:

This policy is also termed as a comprehensive car insurance plan that covers losses or damage caused to your own vehicle while extending third-party liability cover. As it offers comprehensive coverage, it is known as a Package Policy.

This policy will cover the car against damages caused due to:

  • Collision – with another vehicle or physical structure

  • Road accidents – on highways or when your car is stationary

  • Accidents caused due to fire, water, or other similar conditions

  • Damage caused due to natural disasters such as flood, lightning, storm, cyclones, etc.

  • Damage caused due to man-made issues such as riots or strikes

Apart from this, it will also cover payment of medical bills for treating injuries caused to the driver or passengers during the accident. Moreover, plans such as Royal Sundaram Car Shield extend added protection such as Depreciation waiver, windshield glass cover, voluntary deductible cover, Engine protector cover, and NCB protector amongst others.