Someone once said, ‘Safety is not just a slogan; it is a lifestyle choice.’ Insurance is a choice you make to safeguard the things you value. The word ‘Insurance’ is a reasonably self-explanatory word – it means you shield yourself financially from unanticipated or accidental expenditures.
Insurance companies provide a range of options for you to choose from; depending on how much you value your four-wheeler and how much you wish to invest. Here are five types of car insurance coverage you should know of before you buy online car insurance policy.
- Liability Insurance – It is purchased by an insured (the first party, you) from an insurer (the second party, company) for protection against the claims of another (the third, random person) party. The first party (you) is responsible for the damages or losses whether caused by yourself or by the third party.
- Collision Coverage – Collision insurance coverage pays for damage caused to your car in an automobile accident when you are “at fault.” The standard collision insurance policy will pay for repairs up to the fair market value of your car.
- Comprehensive Coverage – Comprehensive car insurance – also known as Fully Comp Cover – is a higher level of protection you can purchase for your car. Third-party policies cover damage to others as the result of an accident where you are guilty.
- Personal Injury Protection – Also known as Personal Insurance Protection (or PIP-personal injury protection,) it is an augmentation of car insurance that covers medical expenses and, fairly frequently, lost wages as a result. Also called “No-Fault” coverage because of its inbuilt inclusive nature, it pays out claims irrespective of whose fault the accident may have been.
- Uninsured /Underinsured Motorist Protection Uninsured motorist coverage protects you if you’re in an accident with an at-fault (guilty) driver who does not carry liability insurance. Underinsured Motorist coverage kicks in when you are in an accident with a guilty driver whose liability limits runs short of covering the damages and medical expenses.
Recently in 2014, the Government passed the Road Transport and Safety Bill to replace the Motor Vehicles Act, of 1988. Amongst other changes, the Bill heavily penalizes those individuals caught driving without a valid car insurance policy – if you do not wish to go through the hassle of dealing with a company or an insurance agent, you can always choose to purchase online car insurance.
As per the amendments, if Traffic police catches you; you would have to pay in any of the following situations:
- Mohan is driving his SUV around without any insurance, he swerves left to avoid hitting a cow crossing the street, and he rams into a two-wheeler riding without a helmet.
If you unintentionally damage any person or surrounding property, you are legally responsible for paying the losses incurred. If you have got no valid insurance cover, you would have to bear the losses incurred. If you take a life, the liability could go very high!
- Manav is late for his French lessons and instead of breaking for a speed bump, accelerates his car, flies up and losing control ends up on the divider with a crushed bumper and hood
Your comprehensive car insurance policy bears the costs of repairs for such damage. Without insurance, the onus of paying for the repairs is on you.
- Meena is late for a job interview and is speeding. At a traffic light, she is stopped by a cop (Constable on Patrol) asking to see her PUC certificate and insurance papers
This is a situation we have all been in and had to pay for it literally – The Motor Vehicles Amendment Bill, passed in 2017 by the Lok Sabha, has implemented a hike in penalties by as much as five times. i.e. the penalty/fine for driving without insurance is now Rs. 2,000.