Car Insurance

Package covers, add-on covers, the works

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