Car Insurance - Everything You Need To Know| North Loop Official Blog
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29 Sep 2020

Car Insurance - Everything You Need To Know

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What is Car Insurance?

Car insurance is a formal contractual obligation between an insurer (insurance company) and an insuree (policyholder). The policy states that any damages incurred by a car due to accidents, disasters (natural calamities, man-made disasters, etc.) are covered in exchange for a regular payment known as the premium.

Types of four-wheeler insurance in India-

Conventionally, there are three types of four-wheeler insurance policies in India-

  • First-party car insurance- This is a type of four-wheeler insurance policy wherein any damages incurred by the car owned by the policyholder as well any injuries with by the policyholder are covered within the policy. Some insurers even cover damages occurring due to natural calamities, etc for a higher premium. On the other hand, any damages or injuries dealt by a third party are not covered within the policy.

  • Third-party car insurance- This is a type of four-wheeler insurance policy wherein any damages/ injuries dealt by a third-party due to collision involving the car of the policyholder are covered by the insurer. However, any damages incurred or any injuries dealt by the policyholder or their car are not covered by the insurance company. The Government of India has made third party motor insurance policy mandatory in India. Even comprehensive insurance policies fulfill these criteria.

  • Comprehensive car insurance- This is a type of four-wheeler insurance wherein any damages/injuries dealt by the policyholder as well as the third party due to collisions are covered within the policy. This also covers any damages occurring to the car owned by the policyholder due to fire, natural calamities, or even theft of the car. However, the premium payable is significantly higher in the case of comprehensive car insurance.

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Importance of car insurance in India-

As the latest rules and regulations implemented by the motor act of India, it is mandatory for all motor vehicles, especially cars to have an insurance policy, with the bare minimum of third-party insurance.

Cars are slowly moving from the bracket of luxury to necessity and with the increase in the number of vehicles plying on roads, the occurrence of accidents is becoming more and more frequent. Such unprecedented incidents make insurance policies absolutely vital for car owners as they save a lot of money and come in clutch at the time of accidents.

Features of Vehicle Insurance-

Car Insurance Online policies, offered by major banks and other institutions can significantly reduce the burden laid on car owners for various reasons-

Car insurance policies provide coverage under a wide spectrum of aspects, such as theft of vehicle, damage incurred due to various reasons (as specified within the policy), personal accident-related injuries, etc.

Comprehensive cover laid out by banks provide coverage under the circumstances of theft or loss of vehicle, wherein the predetermined IDV (insured declared value) of the car is covered by the insurance company.

In the case of damages incurred by the car, the insurance company provides coverage only in the case of damage dealt due to natural calamities such as (earthquakes and fire), during the time of a collision (conditions as specified by the insurer), and during the time of man-made disasters (as specified by the insurer)

In the case of personal accident, the treatment for any injuries sustained by the policyholder during the time of a collision is covered by the insurer, up to a specific amount. Personal accident covers are add-on policies in most cases.

Some insurance companies also provide lucrative discounts on insurance renewals if a claim has not been made during the policy tenure, known as the no-claim bonus.

Car Insurance Online policies can be purchased with North Loop, offering low premiums and high covers and a 100% digital mode of insurance ownership.

Exclusions of car Insurance-

Car insurance does not include the following-

  • Any damages incurred to a third party due to non-collision of the vehicle (Third-Party Insurance).

  • Any damages incurred to one’s own vehicle at the time of collision (Third-Party Insurance).

  • Damages arising to a third party due to natural diseases (Third-party insurance).

  • When one drives without a legal government-issued license.

  • Damages/theft of vehicles occurring outside the country.

  • When an accident occurs due to the driver being under the influence of alcohol.

  • Accidents occurring due to overspeeding.

  • Accidents incurred by any other person riding the car apart from the owner.

  • Accidents occurring when not adhering to the road-legal rules and regulations.

  • Damages occurring at the time of war, invasion of a country, or nuclear risk.

Advantages of purchasing car insurance online policies-

Advantages of car insurance are-

  • Ease of purchase or renewals of the policy.

  • Minimal documentation.

  • Cost-effective and time-saving.
  • Ease of comparison between different policies.

  • No-claim bonus and other benefits can be availed on online insurance policies.

Choose North Loop for the best car insurance online policies, offering high covers for low premiums, speedy renewals, and a 100% online insurance plan offering utmost convenience. Sign up now!

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.