Insurance Policies

Whenever you buy a car, you need to insure it or get the insurance papers transferred into you name in case it is a second hand car.

There are various insurance players in the market who offer Motor Insurance Policies. Popular among them are the General Insurance Company (GIC) and its four subsidiaries:

New India Assurance Company
Oriental Insurance Company
National Insurance Company
United India Insurance Company

Besides, there are several private insurance players, who have tie-ups with car companies to offer you motor insurance.

So why do you need insurance or your car?

Legally, you need to take motor insurance as soon as you buy a car. Every year, you need to renew the insurance policy by paying the premium.

Basically, there are two types of motor insurance, Policy A or Policy B. While you can satisfy the legal needs by getting the former kind of insurance policy, it is always wiser to go for the latter, as it is much more comprehensive. Policy B is also known as comprehensive insurance policy.

Differences between motor insurance policies

Motor Policy A: This insurance policy covers personal injury and property damage caused by your car. The parties covered under this include:

• Pedestrians, occupants of other vehicles etc. except those within your vehicle,

• Driver of the other vehicle

• The passengers with whom your vehicle is for hire. Here, the owner of the vehicle gets an insurance cover on third party property damage only in case of an accident. In other words, if you are in an accident, the affected party can claim damages from you. The premiums generally are dependent on the cubic capacity of the car.

This cover does not go to fire and theft accidents, for which you need to pay additional premiums.

Motor Policy B: The premiums of this comprehensive insurance’s are much higher than those paid for regular insurance cover. This type of policy covers both third party insurance and own damage liability. Covered under this policy are:

• Loss or damage to the vehicle caused by environment as well as other reasons. That is, accident, fire, explosion, lightning, theft and other malicious acts are covered under this policy.

• Damage to the vehicle while it is under transit.

• Risks due to natural/man-made calamities like floods, earthquake, riots, strikes and terrorism.

Damage to accessories like car stereo, car AC and other items that are not part of the original equipment.