Car In­sur­ance

Pack­age cov­ers, add-on cov­ers, the works

Consumer Voice - - Contents - Subas Tiwari & Gopal Ravi Ku­mar

There was a re­cent news item in the na­tional dailies telling us of a dis­grun­tled mar­ried man car­ry­ing petrol in a poly­thene bag to scare his in-laws and end­ing up set­ting fire to cars parked un­der­neath a two-storeyed house, dam­ag­ing them ex­ten­sively. As freaky as this in­ci­dent may seem, the point is that your pre­cious car is as vul­ner­a­ble as any sec­ond or third car on the road. There are car pile-ups, road rages, park­ing is­sues, not to for­get other more dam­ag­ing ac­ci­dents in the realm of pos­si­bil­i­ties. So, of course, there is car in­sur­ance. That’s why we are of­fer­ing here an in­sight into the whole gamut of car in­sur­ance, to help you un­der­stand the con­cept in its to­tal­ity—yes, in­clud­ing the add-on cov­ers that we may be too quick to dis­miss.

Own­ing or driv­ing a pri­vate car does not have to be a trou­ble­some thing if you take suf­fi­cient care in in­sur­ing it with a com­pre­hen­sive pol­icy (called car pack­age pol­icy) that protects not only your car but also the owner/ driver, and, more im­por­tantly, ad­dresses third­party li­a­bil­i­ties (dam­ages to some­one’s prop­erty or in­juries/death to per­sons con­nected/not con­nected to the ac­ci­dent).

Strictly speak­ing, a car in­sur­ance is an ar­range­ment be­tween the in­surer (in­sur­ance com­pany) and the in­sured (ve­hi­cle owner) wherein the in­surer pro­vides cov­er­age (an in­dem­nity) against any fi­nan­cial loss hap­pen­ing be­cause of dam­age to the car. This is ap­pli­ca­ble where the dam­age has been caused ei­ther through an ac­ci­dent or be­cause of any nat­u­ral calamity or any li­a­bil­ity aris­ing out of an ac­ci­dent or a theft.

A car in­sur­ance pol­icy is usu­ally of two types:

a) Third-Party Li­a­bil­ity Cover Pol­icy

This pol­icy cov­ers you against any legal li­a­bil­ity re­sult­ing from the ac­ci­dent of your ve­hi­cle. The in­sur­ance cov­er­age in­cludes death, in­jury or prop­erty dam­age to the third party, legal pro­tec­tion for death or in­jury claims from third par­ties in­clud­ing oc­cu­pants of your ve­hi­cle, legal pro­tec­tion for dam­age to third-party prop­erty, per­sonal ac­ci­dent benefits for you, your paid driver and oc­cu­pants of your ve­hi­cle, legal costs and ex­penses, and pro­tec­tion of your legal li­a­bil­ity to­wards your paid driver.

Ex­clu­sions

This cover does not in­clude dam­age to one’s ve­hi­cle or to the car owner him­self. The pol­icy also does NOT re­im­burse ex­penses borne by you to­wards re­pair or main­te­nance of your car.

b) Com­pre­hen­sive Cover Pol­icy

A com­pre­hen­sive cover is de­signed to of­fer pro­tec­tion to you and your ve­hi­cle. A typ­i­cal com­pre­hen­sive cover com­prises:

i) Third-party (TP) li­a­bil­ity cover: This of­fers in­sur­ance cov­er­age against third-party legal li­a­bil­ity (as de­scribed above). ii) Own-dam­age (OD) in­sur­ance cover: This of­fers cover against dam­age to your ve­hi­cle – that is, any loss or dam­age caused to your ve­hi­cle or its ac­ces­sories due to nat­u­ral and man­made calami­ties as de­fined in the scope of cov­er­age iii) Per­sonal-ac­ci­dent (PA) cover: This of­fers per­sonal ac­ci­dent cover to owner-driver, paid driver and pas­sen­gers of the ve­hi­cle. It of­fers fi­nan­cial se­cu­rity to you and your fam­ily in the un­for­tu­nate event of an ac­ci­dent. It pro­vides com­pen­sa­tion on death or per­ma­nent

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