Categorized | Car Insurance

what your car insurance does not cover

Car insurance is must as per the law of the land in India and due to increased number of cars plying on the road; there is a huge demand for car insurance. Fulfilling this demand there are a large number of insurance providers offering various types of car insurance Policy to woo their customers. However, your Insurance Agent may say a lot about what their car insurance policy covers but do remember to ask them what their car insurance policy does not cover so that you don’t face a jolt when you apply for a claim.

Types of insurance policies: What they cover and what they do not cover

If you are planning to buy a car insurance policy, it is important that you learn about different types of insurance policies and what they include:

Third Party Insurance – As per Auto Vehicles Act 1938 (Act Liability), this is the minimum insurance cover that you ought to have whether you are driving a new or used car. This policy covers third party liability in case your car meets an Accident and the owner is accountable. This type of car insurance policy does not cover the owner’s expenses, damage, theft or injuries. As the insurance cover is least in this type of policy, insurance premiums are also low.

Comprehensive car insurance policy – If you feel that third party insurance is not enough and would like to go for a more comprehensive car insurance policy, you have several options to choose from in the market. However, you should be aware that your insurance Premium would accordingly go up with the number of features covered in your policy.

Apart from third party liabilities, a comprehensive car insurance policy may cover policyholder’s injuries met during the car accident, damage to vehicles due to accident, damage to vehicle due to natural calamity such as earthquake, typhoon, flood, landslide etc or damage to vehicle due to man-made calamities such as riots, acts of terrorism besides it may also cover theft of the vehicle depending on the policy you choose. You may further extend the scope of your policy by including several other features such as damage to vehicle during transit or personal accident cover.  

However, even the most comprehensive car insurance policy does not cover following:
•Consequential loss
•Wears and tears
•Depreciation
•Mechanical and electrical breakdown
•Damage to tyres (unless the car is also damaged)
•Damage caused due to war, mutiny or nuclear Risk
•Driving under intoxication or vehicle driven by some one else other than the driver stated in driver's clause of the policy
•Car breakage caused when the vehicle is used outside the geographical area

According to the Supreme Court judgment, insurance companies are also not liable to cover injuries met by the deceased who was a pillion rider, “as the insurance policy was a statutory policy which did not cover gratuitous passenger”.

The Judgment also states that if the policyholder’s child is driving a vehicle, without having an appropriate insurance cover, and met with a fatal accident, then the insurance company is not liable to compensate the death of the child.

So, even if you own the most Comprehensive insurance policy, it can not be all inclusive. Do read the policy exclusions, when you sign on the dotted line. Also, ask your policy advisor to tell you clearly what the policy excludes. You can also make a comparison of different car insurance policy, what they cover and what they do not cover at insurance comparison websites like www.easypolicy.com. Besides, you must also remember to drive responsible and never mix drink and drive to enjoy full benefits of your policy.