If you buy a vehicle, you must know that purchasing vehicle insurance is mandatory in India. By law, you need to have insurance when you own a vehicle. In simple terms, vehicle insurance basically protects you against financial loss in case of an accident—man made or natural.
Vehicle insurance could include insurance for a car as well as a two-wheeler. Vehicles like buses, lorries and trucks that are used for commercial purposes are generally covered by Commercial Vehicle Insurance.
What is a Vehicle insurance?
As the name suggests, vehicle insurance protects you from financial loss in case of an accident or natural disaster like floods or fire. You must pay a premium (generally annually) and the insurance company agrees to pay your losses as per the terms and conditions defined in your policy. Vehicle insurance provides could also cover damage to property, third person liability expenses, and medical coverage depending on the premium paid. Naturally, the higher the premium, the larger the benefits you get.
What is covered in a Vehicle insurance policy?
A typical policy would give the following protection when you purchase vehicle insurance:
1. Loss or damage to your vehicle due to natural disasters: This includes, but is not limited to, fire, explosion, lightning, earthquake, flood, typhoon, hurricane and landslide.
2. Loss or damage to your vehicle due to non-natural disasters such as burglary, theft, riot, or a malicious act.
3. Third Party Legal Liability: This is protection against legal liability if your vehicle happens to be in an accident resulting in the permanent injury or death of a person and damage caused to the surrounding property.
What Is not covered in a Vehicle insurance?
In general, vehicle insurance does not cover wear and tear or mechanical breakdown of your vehicle.
What is the amount covered in Vehicle insurance?
All vehicles are insured at a fixed value known as Insured’s Declared Value abbreviated as IDV. It is calculated based on the vehicle manufacturer’s listed selling price, the cost of any added accessories and deducting the annual depreciation.
What is the process to claim insurance money?
If you are unfortunately involved in an accident involving your car or two-wheeler, do contact your insurance company or agent immediately if you are in a position to do so. If you are not in a position to do so ( if you are hospitalized, for example), ask a trusted family member or friend to contact your insurance agent on your behalf. You will be given a claim number which is also called the reference number which you need to keep handy as reference for any claims.