Motor Insurance: Everything you need to know about the types

Holding an insurance policy is mandatory for every motor owner in India, according to the Motor Vehicle Act, 1988. Insurance offers a sense of relief if you ever meet an accident or in case of theft. It also provides legal and financial cover which comes handy in a scenario of duress. However, the type of coverage you get, and the sum assured depends on the kind of policy you opt for.

Motor insurance types are of three kinds in India. The word motor covers all of them. You need insurance based on the vehicle you own. Let us learn about them in detail –

  • Two-wheeler insurance:

If you own a bike or a scooter, you need two wheeler insurance. Depending on the kind of policy you opt for, you get coverage for accidents, thefts, natural calamities, and humanmade calamities. The plan covers the motorcycle while it is stationary or in transit. You get a mandatory personal cover of a specific amount in cases of accidents and protection from legal obligations owing to injury or death or damage to third-party person or property.

  • Four-wheeler insurance:

Vehicle owners can choose from different car insurance plans. This insurance policy offers coverage against loss or damage to vehicles owing to an accident, natural, and humanmade calamities. You also receive legal and financial assistance in case of injuries, death, or damage to the third-party person or asset. If you need to make a maximum of the coverages, opt for a plan that allows additional riders and higher sum assured.

  • Commercial insurance:

Those motor used for commercial purposes like rickshaws, cabs, buses, trucks, etc. are considered commercial. The premiums you pay depends on the make, model, place of registration, and if the individual or corporate operates it. The commercial plans cover both the driver, the passenger, and the third-party involved in the accident. Precisely why the premiums and sum assured are competitive.

Kind of plans:

Depending on the coverages offered, motor insurance plans are further classified into –

  • Limited liability insurance

This kind of insurance is mandatory, be it four-wheeler or bike insurance, under the Motor Vehicle Act, 1988. The cover offers protection against damage or injury to the asset and the person. It does not cover self or your motor from theft, natural, or humanmade calamities.

  • Comprehensive policy

Such motor insurance plans providers protection to both third-party as well as policyholder. You get protection from hospitalisation costs, damage, or theft of the motor, based on the coverage opted for. You can boost the plan by buying add-on covers. The different kinds of add-on cover include zero depreciation, personal accident cover, roadside assistance and so forth.

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