Different Types of Car Insurance Coverage Explained
04 March 2019
What is car insurance?
Car insurance policy is taken by the owner to protect her vehicle from damages and/or loss arising from unavoidable and unforeseen circumstances. It provides cover against theft, total/partial damage caused to the vehicle.
Let us take a look at the 7 different types of car insurance.
Liability Coverage
This is mandatory under the Motor Vehicles Act. It takes care of the repair cost or even replacement of the damaged vehicle. This coverage comes to your rescue when you are involved in an accident.
It also covers third party injury, death or damage to the property of third party.Collision coverage
If this type of coverage is included in your policy, the repair charges of your car will be taken care of by the insurer. The value of the cover should be decided based on the age of the car. In the odd case that the repair cost exceeds the market value of the car, the insurer will only reimburse the market value of the car.
Personal injury coverage
As the name suggests, this cover will take care of the personal injury expenses. The bills of medical expenses of the injured driver and passengers is covered under this. The coverage is not dependent on the accident being the driver's fault or the other party's. So, it is advisable to include personal injury coverage in your policy at the time of inception of the policy.
Uninsured motorist protection
In the unfortunate case of your car being involved with an accident with another vehicle which does not have any insurance cover, you will need to bear the repair charges out of your own funds. It may also happen that the other party's insurance cover is not enough to reimburse you for the damages sustained by your car. It is at such difficult times that uninsured motorist protection comes to your rescue. Uninsured or underinsured protection can be included in your policy as a rider to cater for unforeseen situations like the ones mentioned above. The insurer will pay the additional/shortfall amount so that you can rest assured.
Comprehensive Coverage
Comprehensive insurance coverage provides another level of coverage in the event of an accident with another vehicle. It may help pay for damage to your car due to incidents like damage from inclement weather, floods, fire and theft. It also covers the regular risk factors for the vehicle, driver, passengers, third party vehicle and its driver/passengers. If you have any anti-theft devices in your car, the premium might go down as the risk of theft is less. As the name suggests, this policy is a complete coverage for your car.
Third-party insurance
As mentioned earlier, third-party insurance is an essential component of your car's insurance cover. It covers for the injury and death of the third party involved in an accident. It also covers third-party property damage. It will take care of the legal obligations arising from an accident with a third party. The drawback is that it does not cover the damage to the own vehicle and injuries/death of the driver and passengers unless explicitly included.
- Car Insurance Add-ons Roadside assistance ‐ If your car breaks down in the middle of the journey, this cover comes to your help. The insurer will assist you to move the vehicle to the nearest service centre.
- Engine replacement ‐ If the engine of your car gets damaged, you can get it replaced under this add-on cover.
- Nil depreciation cover ‐ This ensures that the car is covered for the invoice value and you receive the maximum compensation in case of a claim.
At Liberty General Insurance, you can avail a car insurance today.
