What is Car Insurance?

Learn about Car Insurance with James Bond
YouTube video
Tomorrow Never Dies 1997

Case breakdown: Movie Tomorrow never dies

This scene shows you how Q, Quartermaster of the Q division reaches out to James Bond with a car insurance damage form. He asks Bond whether he will need collision coverage, to which Bond replies in the affirmative. Q goes on to ask about fire, property damage, and personal injury.

In this blog, Learning Perspectives will explore Car Insurance.

What is Car Insurance?

Car insurance, motor insurance, or auto insurance helps in protecting the vehicle from damage or risks associated with the vehicle. This insurance protects your financial loss against accident or theft. Car insurance provides coverage for:

  • Property- Theft or damage to the vehicle.
  • Liability- Legal responsibility for physically injuring others or causing damages.
  • Medical- Cost of treating medical injuries.

Motor insurance usually covers the following:

The damages to the vehicle due to the following perils  are usually covered under the OD section of the Motor Insurance policy:

  1. Fire, Explosion, Self-Ignition, Lightning
  2. Burglary/Housebreaking / Theft
  3. Riot & Strike
  4. Earthquake
  5. Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost
  6. Accidental external means
  7. Malicious Act
  8. Terrorism acts
  9. While in Transit by Rail/ Road, Inland waterways, Lift, Elevator, or Air
  10. Land slide / Rock slide

Minimum coverage depends upon the coverage chosen by an individual.

Insurance Costs:

Premiums payable for car insurance depend on many variables. Different insurance providers charge different premiums. Before buying car insurance, it would be wise to compare prices across various platforms.

For Own Damage:

The Sum Insured under a Motor Insurance policy reflects the value of the motor vehicle determined based on the concept known as Insured’s Declared Value.

It is the value arrived at based on the Manufacturer’s present value and depreciation based on the Age of the Vehicle.

For Third Part Damage:

Compulsory Personal accident cover for owner-driver is also included. The policy can also be extended to cover various other risks like Personal accidents to occupants of vehicles, Workmen’s Compensation to drivers, etc over and above the cover available to him under the statute.

References:

https://www.policyholder.gov.in/Why_Buy_Motor_Insurance.aspx

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