The term motor insurance covers different types of motor insurance. Buying motor insurance? Make sure you buy an insurance policy which suits your vehicle. These vehicles can be two wheelers like scooty, scooter and motorbike or three or four wheeler vehicle.
If you are thinking that policy for four wheeler vehicle is same as of two wheeler, then let me tell you that you are wrong. There are subdivision in insurance of four wheeler vehicles. If you are using your four wheeler for commercial purpose then you must buy policy designed for commercial purpose.
Similar is the case, if you have purchased your car for private usage then buy policy designed for private purpose. There are basically 2 types of motor insurance policy in India which are explained in detail below.
Types of Motor Insurance in India
Broadly Motor insurance have been classified into 2 different categories:
1. Based on the Coverage
The Motor insurance policies based on the coverage offers –
Such type of insurance policy covers third party liability. While it also covers the expenses incurred by the policy holder on the event of theft, damage etc. However the policy holder even gets benefits from the personal accident covers. Such type of claim is given if policy holder dies during the accident or face some injury.
2. Zero Depreciation Cover
This type of insurance cover is highly famous add-on cover that is used in motor insurance. Such type of cover ensure that the policy holder receive the entire amount after accident on the event of replacement of parts. One of the most important point about this cover is that it is available for vehicles having life span less than 3 years.
Third-party liability insurance is one of the insurance policy which is mandatory for the vehicles running on the road. This type of insurance policy provides protection to the third-party for damage where the policy holder was accountable for the accident. The coverage of this insurance is very limited and it doesn’t protect the policy holder from the theft or damage to the insured vehicle.
4. Engine and Electronic Circuit Cover
This is another add-on cover which protects the insurer from the expenses incurred due to the damage in engine and electronic circuit. If anything happens to the engine or electronic circuit of your vehicle, the damage is bear by the insurer.
2. Based on Purpose of Use
Vehicles can either be used for private or commercial purposes. The type of insurance policy that the car owner purchases is dependent upon the future use of the vehicle.
1. Private Motor Insurance
Private motor insurance cover is taken for two-wheeler, three-wheeler or four-wheeler owners. Well Private motor insurance policy is taken when the car owner purchases the car with the purpose of using the vehicle for personal use. However such type of insurance covers provides protection against accidental damage or third-party liability protection.
2. Commercial Motor Insurance
Commercial motor insurance is taken when the car will be used for commercial purpose in future. It protects the business from getting trapped into financial loss via damage in the vehicle. This type of policy also covers accidental cover and third-party liability protection.