Categorized | Car Insurance

liability only or comprehensive-which auto insurance to choose?

Vehicle insurance is mandatory in India. It is illegal to drive without auto insurance. The choice of taking liability only Coverage or the comprehensive coverage lies with the customer. It is important to know what they mean and what they include so as to make the choice.

Liability Cover
Liability cover is the mandatory aspect of motor insurance. As per the law, it is the minimum insurance one need to have to be able to take the vehicle on road in India. This covers the third party (While the first party is insured, second the insurer) for:
  • Third party liability for bodily injury,
  • Third party death
  • Third party property damage
If in case of an Accident one is liable to pay the third person for injury death or property damage, insurance company takes care of it. Liability only Policy also covers the owner driver of the vehicle for injury and death.

One can also combine this basic cover with Fire and theft cover:
  • Liability only policy with Fire only cover
  • Liability only policy with theft only cover
  • Liability only policy with fire and theft cover
This type of insurance is the bare minimum one needs to have but is ideal if the cost of the vehicle has reduced substantially due to accident or years of use.

Comprehensive Cover
Comprehensive package policy covers the own damage part of the vehicle along with the liability only aspect. Comprehensive car insurance will cover:
  • Third part liability for bodily injury, death and property damage
  • Fire, explosion, self ignition, or lightning
  • Natural disasters like floods, hurricanes and storms, earthquakes, Landslide etc.
  • Burglary, housebreaking or theft
  • Riot, strike, or terrorist activity.
  • Accidents
  • Malicious act
  • In- transit by road, rail, inland-waterway, lift, elevator or air
Comprehensive cover includes personal accidental benefit for the owner of the car. Accessories installed in the vehicle after the purchase can also be covered under the policy on payment of extra premium. Insurance companies come up with attractive add on covers to compliment the basic comprehensive cover like:
  • Depreciation cover
  • NCB protection cover
  • Personal belongings cover
  • Daily allowance cover
  • Loss of keys
  • Road assistance cover
The purpose of taking comprehensive car insurance is to offset the cost of repair incurred on one’s own vehicle in case of an accident. Taking comprehensive car insurance makes even more sense if the vehicle is new, expensive, and has been accessorised. In such cases, damage repairs cost a lot. If one has this cover all one has to pay is the Deductible and the rest is covered by the insurance company up to the sum assured. Besides Comprehensive insurance offers facilities like cashless Claim settlement and eases out the process.

Liability cover while cheap covers for the damages to other person or property and not to your own vehicle. Comprehensive car insurance is expensive on face of it but can protect you from major financial difficulty if claim situation arises.