Motor insurance, also known as car insurance or auto insurance, is a type of insurance policy that provides financial safety to private car owners against financial losses coming from crashes, theft, or other damages to their vehicles. It is a legal requirement in many countries to have motor insurance to drive a car on public roads.
Motor insurance covers the different risks involved with having and running a vehicle. The coverage may change based on the type of contract and the insurance company, but some common components of car insurance include:
- Third-Party Liability Coverage: This is the basic and required component of car insurance. It covers the legal responsibility of the car owner towards third parties (e.g., passersby, other drivers, or property owners) for bodily injury, death, or property damage caused by the covered vehicle.
- Own Damage Coverage: This includes losses to the covered car due to crashes, theft, fire, or natural disasters. It includes coverage for repairs or replacement of the car, subject to the terms and conditions of the insurance.
- Personal Accident Cover: Most motor insurance plans include personal accident coverage for the owner or driver, giving relief in case of accidental death or injury coming from a car accident.
- Add-On Covers: Motor insurance often offers extra add-on covers, also known as riders or endorsements, that can be bought for added security. These add-ons may include zero-loss cover, engine safety, motorist help, key replacement, and more.
- No Claim Bonus (NCB): Insurers often reward customers for claim-free years by giving a discount on the rate at the time of renewal. This deal is known as the No Claim Bonus (NCB).
- limits: Motor insurance plans have certain limits, such as driving under the influence of alcohol or drugs, driving without a legal license, and intentional damages. Such restrictions are mentioned in the policy paper.
Motor insurance is important not only because it is required by law in many places but also because it saves car owners from major financial responsibilities in case of crashes or damages. It provides peace of mind to drivers, knowing that they are financially covered against unexpected events that may occur while running their cars.
Zero Devaluation Cover: This add-on cover ensures that the insurance company will not consider the devaluation of car parts while settling a claim. It results in higher claim payouts, especially for expensive car parts, and lowers the out-of-pocket costs for the car owner during fixes.
Roadside help: This feature offers 24/7 help in case of car problems, flat tires, power issues, or other situations. Services may include towing, fuel delivery, battery jump-starts, and key help.
Engine Protection Cover: It gives security for engine losses due to water intrusion, oil leaks, or other internal issues. Regular comprehensive plans may not cover engine damage, making this add-on helpful in regions prone to floods or monsoons.
Goods Cover: This cover reimburses the cost of goods like engine oil, coolant, nuts, bolts, and other things that are not usually covered in a standard car insurance policy.
Personal Accident Cover for Passengers: The basic car insurance policy usually includes personal accident coverage for the owner or driver. This add-on extends the service to other people in the car.
Return to Invoice (RTI) Cover: In the event of a total loss or theft of the covered car, the RTI add-on cover ensures that the insurance company gives the invoice value of the car rather than the reduced value.
Key Replacement Cover: This cover offers safety in case of loss or theft of the car keys. It includes the cost of changing the keys and, in some cases, even the cost of resetting the key fob.
No Claim Bonus (NCB) Protection: The NCB is a discount on the price given for every claim-free year. With NCB security, the insured can make one claim during the policy period without losing the collected NCB.
It’s important to carefully review the terms and conditions, policy limits, and fees connected with each add-on cover. Evaluate your wants and driving habits to decide which add-ons would be most helpful for your private car. Always speak with your insurance company or agent to understand the details of each add-on and how they can improve your car insurance coverage.
