Insurance Regulatory and Development Authority of India is the apex body who controls the insurance business in India. It guards the benefits of the policyholders, regulates, encourages and ensures orderly growth of the insurance sector in India.
The Indian Government has made third-party liability coverage mandatory for all vehicles. It is a legal obligation for the owner of the vehicle to compensate for the loss incurred by a third party due to an accident caused by the vehicle. Therefore, every vehicle owner needs to have at least third party insurance. Driving in India without a vehicle insurance cover is a legal offence according to the Motor Vehicles Act of 1988. The major function of motor insurance, for both two-wheelers and four-wheelers, is to acts as a defense line against any mishap.
Types of Insurance
As per the IRDA, motor insurance can be categorized into two parts:
- Third Party Liability Only Policy – A third party car insurance plan provides coverage against any legal liability arising out of injuries to a third-party when the policyholder is at fault. It covers damages and bodily injuries caused by the insured vehicle, to a third party person or property.
- Comprehensive Insurance Policy – A comprehensive car insurance plan offers complete protection against the damages caused to your car due to any mishap. This policy provides coverage for the damages caused to your car, third-party legal liability, theft, along with the personal accident coverage. This coverage can be boosted by selecting add-ons, such as engine protector, personal belongings cover, zero depreciation cover, etc. This cover offers full-fledged coverage. A comprehensive car insurance policy also includes coverage for fire, theft, riot, natural and man-made catastrophes that causes damages to your car.
The Insurance Regulatory and Development Authority provides complete guidelines about motor insurance for both two-wheelers and four-wheelers. To protect the interests of the insurance policyholders, IRDA presents some dos and don’ts about motor insurance policies.
Following are few tips about what to do when you plan to buy motor insurance policy in India:
- Decide the general insurance provider from whom you are willing to buy a motor insurance plan. It is not necessary to buy motor insurance from the dealer. You can buy it from any insurer who fulfils your needs and requirements.
- It is vital to read the entire insurance proposal form carefully. Keep a photocopy of the completely filled insurance proposal form as a record.
- Go through the inclusions and exclusions mentioned in the insurance policy. Clear the concept, never hold any doubts for later.
- Choose add-on features with the insurance policy that suit your needs and requirements.
- During verification, provide all the important documents of your vehicle.
Be well versed while purchasing an insurance policy. Here are the things you should avoid when you buy insurance for your vehicle:
- Don’t allow anyone else to fill your insurance proposal form.
- If you face difficulty in understanding the language, seek help from the insurance provider.
- Do not let your insurance policy lapse. Always try to renew your motor insurance within its due date.
- Do not provide your insurance provider with incorrect information. This may land you in a legal situation.