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How Does Car Insurance Work In India?

Car insurance policy not only protects from third-party liability, but it also provides financial support in case of damage to your car and injuries sustained by you during the accident. The process of filing an insurance claim has become much more accessible than before. Also, as you can buy or renew car insurance policies online, it has become much easier to make a firm decision that benefits you and not the insurance agent.

When you buy a vehicle from your own, it becomes an integral part of your life. Car insurance provides financial security in case of an accident or theft. There are certain damages and parts which are not covered in every policy. You should read the fine print that includes what all is covered under the insurance policy before finalizing it. In case you need additional cover, check for available add-ons.With add-ons, you can also get cover for the damages caused by natural events such as hurricanes, floods, earthquakes, etc.

The primary aim of car insurance is to protect you from third-party financial liability in case of an accident. By buying a comprehensive Car Insurance Policy, you can get third-party cover, damage to your vehicle, personal accident cover, and cover for replacing parts as well.

Types of car insurances

There are two types of insurance policies in India that are third-party and comprehensive. Both types of insurance policies are only valid for one year from the date of purchase.

  1. Third-party car insurance policy: This type of insurance policy only provides cover for the damage done by your vehicle to third-party vehicle or property. It also covers medical expenses for the injuries sustained by the third-party and provides accident cover in case of death. It will not cover any damage to your vehicle or any injuries suffered by you. These insurance policies are mandatory, and you cannot drive your car without it on Indian roads.
  2. Comprehensive car insurance policy: It provides cover for third-party as well for the damage to your vehicle. This type of insurance policy also allows you to buy add-ons for additional protection. These policies are expensive in comparison to third-party insurance. It provides cover for damages caused in an accident or because of a natural or man-made event.

Standard clauses under car insurance policies

Some common clauses apply to almost every car insurance policy available in the market. These clauses can result in denying or reduction in the claim amount. Some of the standard clauses are:

  • General aging or wear and tear to the vehicle
  • Mechanical or electrical breakdown in the system
  • Any damage to tires or tubes
  • If the car is used outside India
  • If the person driving the car does not have a valid license
  • If the vehicle is being used for a purpose not mentioned in the policy
  • If the person is driving under the influence of alcohol or any drug

The process of filing a claim

  1. If you have met an accident or your car has been stolen, you can submit an insurance claim to get financial support. To file a claim, you will need the following information:
  • The license plate number of the vehicle(s) involved in the accident (if available)
  • Names and contact numbers of any witness(s) (if possible)
  1. Once you have this information, call the insurance company.
  2. Provide then the reference number or policy number and ask for the list of documents they require.
  3. Get a list of preferred garages from the company in your area.
  4. File an FIR in the nearest police station and get a copy of FIR. You can also download a copy of FIR from the Police Department’s website. FIR is essential in case of property damage, theft, injuries, and more.
  5. A representative will visit the garage to access the damage.
  6. Consult him about the amount that the insurance company is going to pay.
  7. Once the representative has verified the documents and provided information about the amount, pay the remaining amount for the damage that is not covered under your policy.

In case this is going to be a cashless payment, the insurance company will pay the garage directly; otherwise, you have to submit the invoices as well for the claim.

You might be a safe driver, but you cannot assure the same for every driver on the road. Most of us do not care about car insurance policy more than a mandatory instrument. Many car owners only get third-party insurance cover, which puts them in financial turmoil in case of an accident or theft. Thus it is better to get a comprehensive car insurance policy with add-ons (if required).

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