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Why is a Comprehensive Policy in Motor Insurance a Good Idea?

Motor Insurance, car insurance, comprehensive motor insurance policy, comprehensive policy, Liability insurance policy, Third Party insurance, Coverages in comprehensive policy, Natural disasters, floods, earthquakes, theft, terrorism, vandalism

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Ramesh: Hi Rakesh!

Rakesh: Hi Ramesh, How are you?

Ramesh:All good, planning on buying a new car.

Rakesh: Wow! Do opt for a comprehensive motor insurance policy.

Ramesh: What is that?

Are you in a similar dilemma?

Don’t know which type of motor insurance policy to opt for?

Here are a few insights on why taking a comprehensive motor insurance policy is a good idea.

Investing in a car has its own share of expenses. Whether it is the maintenance cost or the ever rising petrol costs, you name it! Therefore, it is always advisable to opt for the right insurance cover which can lessen the expenses in case your car is damaged.

 Third Party Car Insurance vs. Comprehensive Car Insurance

Third Party Car Insurance

As per the Motors Vehicles Act, purchasing a third party car insurance is compulsory. Third Party Insurance/Liability Insurance covers your damages to a third party vehicle. It covers for the injuries caused to other people or to third party property. It does not cover for your own loss. Suppose, there is a damage caused due to floods or accident to your own vehicle, you cannot ask for a compensation under your liability cover. Thus, it is always advisable to opt for a comprehensive car insurance policy.

Comprehensive Car Insurance

Unlike liability, comprehensive policy is optional. However, it is very important to cover your own losses alongwith third party. Although you need to shell out a little extra from your pockets, it covers losses due to natural calamities and man-made disasters.

Types of Damages Covered Under Comprehensive Car Insurance 

  • Natural disasters: storms, tornadoes, hurricanes, earthquakes, hailstorms
  • Fire, civil commotions, explosions
  • Vandalism and theft
  • Damage from impacts with animals note: a crash from swerving to avoid animals will likely fall under collision
  • Broken / shattered windows and windshield
  • Falling objects
  • Terrorism
  • Acts of God

 Why Do I Buy Comprehensive Car Insurance?

When buying a motor insurance, here are some pointers which need to be considered if you are thinking about a comprehensive motor insurance policy.

  • Value and Age of the Car

If your car is new and expensive, opting for a comprehensive policy along with some add on covers will be a wise investment.

  • Lease Holder/ Lender Requiring Comprehensive Policy

Many lease holders and auto lenders mandate for a comprehensive insurance policy as they believe that the car is their asset until the loan is paid off. In case the car is damaged, they will not be facing a financial setback unlike in Third Party insurance where only damage caused to others is considered. You should check with your auto loan/ lease holder to make sure if there is any such requirement.

While it maybe very tempting to save money and not opting for a comprehensive coverage, it is certainly not beneficial. While deciding on a comprehensive coverage, it is a good idea to compare the premiums with the cost or repair if your car is damaged.

Take a look at the best motor insurance plans on our website!

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Published on:20 May, 2016

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