Comprehensive Motor Insurance

There were times when people used to think of Motor insurance as only a legal obligation. But times have changed. Mindsets evolved. And people started to see its value, its role as a shield that protects them, their car and others on the road.

Regardless of how much you travel, accidents and other such unfortunate events can happen anytime, anywhere. This is where motor insurance checks in as a trusted financial safety net that saves you from being left alone in times of distress. Comprehensive Motor Insurance coverage is one of the most dependable and complete ways of getting your car protected.

Let's take a dive into what comprehensive motor insurance covers, why it is important, and how it can benefit policyholders.

Understanding Motor Insurance First............

Before we take you to different aspects of comprehensive motor insurance, let us first help you get a better grip on the broader concept of motor insurance.

Basically, motor insurance is a contract between you (the policyholder) and an insurance company, wherein the insurance company promises to either pay for damages caused to your vehicle or losses arising out of it due to accidents, theft, natural disasters, or other perils specified in the policy.

There are mainly three types of motor insurance policies.

Third-party Liability Insurance: It pays compensation to third parties for injuries, death, or property damage caused by your vehicle. It does not include coverage for damage to your own car.

Own Damage Cover: This policy pays for the loss or damage of your car after an accident, theft, fire, natural disaster, or man-made disaster.

Comprehensive Motor Insurance Cover: This type of motor insurance offers coverage for both liability to third parties and damage cover. It gives complete protection, which is why vehicle owners prefer it the most.

Motor insurance is compulsory in India and is governed by the Motor Vehicles Act, of 1988, where every vehicle owner must at least have a “Third-Party Liability Cover”. But, as mentioned earlier, third-party cover does not pay for damages to your own vehicle. It is where comprehensive motor insurance serves as a better and more suitable option. You get the maximum possible coverage, protecting you from almost all types of risk.

What is Comprehensive Motor Insurance?

Comprehensive motor insurance is the most complete form of motor insurance. Comprehensive insurance provides you coverage for both damages to your own vehicle and any kind of third-party liabilities.

Here’s a brief overview of what it normally contains:

Own Damage Cover: Protects you from damages to your car due to:

• Accidents

• Fire

• Theft

• Natural disasters (floods, earthquakes, cyclones, etc.)

• Man-made disasters (riots, vandalism, etc.)

Third-Party Liability Cover: It pays for injuries, deaths and property damage that your vehicle may cause to a third party.

Personal Accident Cover: Several of the comprehensive policies offer personal accident cover for the driver (IRDAI mandates coverage only for up to ₹15 lakhs).

Comprehensive insurance policies also include certain add-ons that you can select to strengthen your comprehensive motor insurance coverage, such as:

• Zero Depreciation Cover

• Engine Protector Cover

• Roadside Assistance

• Return-to-Invoice Cover

Comprehensive motor insurance policies are typically offered for a duration of one year only. However, you can also choose between a multi-year plan of three years.

Other Provisions

Motor insurance in India is regulated by the IRDAI, which has specified certain other provisions for comprehensive policies:

Personal Accident Cover: As of 2018, all motor insurance policies need to provide personal accident cover for the driver, as directed by IRDAI.

No-Claim Bonus (NCB): Another provision is the benefit to those policyholders who do not file any claim throughout the policy duration. Such policyholders enjoy a discount on the premium while renewing the policy. Each year that claims go unraised, the discount rates also go up.

Latest Developments in Comprehensive Motor Insurance

The comprehensive motor insurance industry is changing at a phenomenal pace with some of the most exciting innovations in recent years:

Digitalization: Search for your policy online and settle claim cashless and even instant quotes are available; insurance is digitally addressed.

Usage-Based Insurance: Some firms are testing pay-as-you-drive policies that calculate premiums based on driving behaviour and mileage.

AI and Telematics: We also see the implementation of advanced technologies such as artificial intelligence (AI) and telematics to more accurately assess risks and even personalize policies.

EV benefits: Discount rates on premiums of insurance policies for EVs are also being provided to incentivize and promote Green Transport.

Such innovations are changing the way people engage with motor insurance making it more customer-centric and streamlined.

Implications of Not Purchasing a Comprehensive Motor Insurance

Although the Indian law only mandates third-party liability insurance and IRDAI has mandated the own-damage cover, failing to buy comprehensive motor insurance can still have some serious repercussions:

The Cost: Without this cover, you'll have to foot the bill if your vehicle is damaged in an accident or stolen.

Penalties for Non-Compliance: According to the Motor Vehicles Act, driving without valid insurance can attract fines, suspension, or even imprisonment.

For example, say your car is stolen and it is not covered under comprehensive coverage, or even your own damage cover; in that case, you will not receive any money for the loss, and you are on your own. Likewise, getting into an accident without enough coverage could leave you in some serious financial troubles.

Why You Should Opt For A Comprehensive Motor Insurance Plan?

While a comprehensive motor insurance may feel like an additional expense at first, it is a worthwhile investment for an unparalleled coverage. It acts as an unmatched value, protecting you from any kind of financial burden arising out of any kind of unexpected events that may happen with your own vehicle, or protecting you from third-party liabilities.

More than just a policy, it ensures you are ready if life tries to surprise you. 

So, the next time you find yourself renewing your policy or purchasing a new vehicle, keep this in mind: 

Comprehensive motor insurance isn’t a luxury, it’s a necessity.