Defining Auto Insurance

Auto insurance (also known as vehicle insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.

Private Car Insurance

It is the fastest growing sector as it is compulsory for all the new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture.

Two Wheeler Insurance

It covers accidental insurance for the drivers of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of the beginning of policy period.

Commercial Vehicle Insurance

It provides cover for all the vehicles which are not used for personal purposes, like the Trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at the commencement of the insurance period, make of the vehicle and the place of registration of the vehicle.

Auto Insurance Coverage

Auto insurance provides property, liability and medical coverage

Property coverage pays for damage to or theft of the car.

Liability coverage pays for the legal responsibility to others for bodily injury or property damage.

Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses

Coverage Levels

Vehicle insurance can cover some or all of the following items:

The insured party

The insured vehicle

Third parties (car and people)

Third party, fire and theft

In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)

What it Covers?

The auto insurance generally includes

Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act.

Liability for third party injury/death, third party property and liability to paid driver.

On payment of appropriate additional premium, loss/damage to electrical/electronic accessories.

Exclusions

Typically, the motor insurance plan does not provide for

Normal wear and tear or general ageing of the vehicle.

Depreciation, wear and tear of consumables like tubes and tires.

Damage that occur while a person is under the influence of drugs or liquor.

Claims arising out of contractual liability.

Mechanical/electrical breakdown.

Damages that occur while a person is driving with invalid driving license.

Damage due to a war, civil war, mutiny, or nuclear risk.

Use of vehicle other than what it is meant for. For example, if a private car is being used as a taxi and gets involved in an accident, the owner will not be able to claim damages.