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Benefits of Car Insurance Plans in India

Benefits of Car Insurance Plans in India

Car insurance provides financial assistance in case of accident or theft or due to natural calamities. While it is mandatory to take car insurance in India, there are several other key benefits. Understanding the benefits would help car owners to take right car insurance plans and claim them at appropriate times. What is Car Insurance? What are various benefits of Car Insurance Plans in India?

What is Car Insurance?


Car insurance would provide protection against loss or theft or damages done to the car due to accident and further liabilities arising out of it. Car Insurance is mandatory in India. If not taken, it would attract high penalties along with imprisonment.

Types of Car Insurance


Before we get into benefits of car insurance, one need to understand the types of car insurance policies available in India.

1) Third Party Liability Car Insurance

This provides protection against third party injuries, third party death and third party property damage. This is simple car insurance, which is mandatory to consider as per Motor Vehicle Act 1988. This does not cover damage to own vehicle.

2) Comprehensive Car Insurance Plan

This covers both third party liability and own coverage i.e. Third party injuries, third party death, third party property damage, theft, fire, calamities, damage to the car due to the accident. This variant covers both mandatory car insurance as well as damage to own car, hence it is termed as comprehensive car insurance plan.

Benefits of Car Insurance Plans in India


Here is the list of key benefits in car insurance policies.

1) Insurance for Damage / loss of vehicle

Car insurance would provide financial assistance in case of damage to the car due to accident, fire or self-ignition and also to third party injuries or death. Beyond this, if car suffers losses or damage due to theft or burglary or riots, it would be covered as part of the plan.  Another key benefit is that it covers loss or damage while in transit through road, rail or water.

2) Personal Accident Coverage

Major advantage in car insurance policy is that it covers personal accident cover which is a fixed amount. Personal accident coverage would include protection against death due to accident and permanent total disability etc., One can add personal accident coverage based on maximum seating capacity in the car and without naming a person.

3) Third Party Liability

One key benefit of car insurance is that it not only covers own car damage, but also third party liability e.g. if the car accident results in the damage of third party properties, legal liabilities arising of any bodily injured, death of third party etc., Means this not only covers self vehicle damages, but also covers the damages or liabilities arising out of such accident.

4) Network of Garages

Car insurance generally covers the majority of network of garages so that in case of damage of the car, the owner can easily take it to the nearest garage and get it repaired by getting financial assistance from the insurance company.

5) No Claim Bonus

No claim Bonus is nothing but the bonus provided by the insurance company in case of no claims made during the previous year of the policy. NCB is offered as discount to premium if there are no claims made in previous years. If there is a continuous claim free year, one can get good amount of discount on the car insurance premium.

6) Mandated by Law

Car Insurance is mandated by law.  If you are driving a car without valid insurance, it is illegal in India. In case you do not take car insurance policy, you are liable to pay penalties + need to go to jail too.

Understanding the benefits of car insurance would help you to take the appropriate car insurance plan and also understand the legal aspects of considering such plans.

Suresh KP

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