Many people pick up a third party liability car insurance policy and forget about the rest of their insurance. If you own a car in India, it’s mandatory to take out a third party plan if you want to drive the car on the road. But just getting one of these policies doesn’t mean you’re sorted. You should know the benefits of taking out a comprehensive policy. And more importantly, you should know what your insurance plan will cover and what it will not.
Top reasons for insurance claim rejections
- Accidents caused due to breaking the law
- Regular wear and tear of the vehicle
- Gross negligence on the part of the vehicle owner/driver
- Driver has no valid licence
- The damaged vehicle was moved without authorisation from the insurance company causing further damage to the car
Third party Policies
Inclusions
If you’ve opted to take out only a third party liability policy, then your plan will cover the following:
- Damages to any person caused by an accident involving your car. If you are liable to pay compensation for injuries to anyone, the insurance policy will cover it.
- Damages to a person’s property or vehicle. If you are liable to pay someone for damages you’ve caused to their property, then the insurance plan will pay for it.
Exclusions
- The following are the exclusions of these plans:
If you incur any injuries to yourself, the insurance plan will not cover this. You will have to pay for medical costs on your own. - If your own vehicle is damaged or stolen, the insurance company will not be liable to pay any compensation.
Comprehensive Policies
Inclusions
- Damages and injuries caused to a third party will be covered.
- Damages to a third party’s vehicle or property will also be covered.
- Any damages incurred on your own vehicle will be covered.
- Any injuries to self sustained in the accident will also be compensated.
- In the event of any natural calamities such as earthquakes, floods and landslides, your insurance policy will provide financial aid.
- If your vehicle is stolen, the insurer will pay out an amount equal to the insured declared value (IDV) as per the details of your policy.
- In case of any other man-made disasters such as terrorism, strikes and fire, the insurance plan will cover your losses.
Exclusions
- Expired/Lapsed policies will not be eligible to make claims.
- In case of war, rebellion, hostilities, terror attacks or invasion, the insurance policy will not be valid.
- Insurance plans will also not cover nuclear risks.
- If you are involved in an accident while under the influence of alcohol or drugs, the insurance plan will not pay out.
- Consequential damage such as driving with a failed gearbox or engine oil leakage causing further damage.
- Any staged accidents amounting to fraud.
- Driving without a valid licence or if the driver is under age.
- Driving on the wrong side of the road.
- Using a car for any other purpose than intended in the policy, such as commercial car for private purposes and vice versa.
In some cases, insurance companies offer add-on covers or riders that will provide protection against some of the exclusions. Opting for these riders will cost you an additional premium but will also provide extra coverage such as covering injuries to the co-passenger of the vehicle.
