- An insurance policy to cover you against loss and damages to your motor vehicle due to accidents, theft, fire or natural disasters.
- You can take motor insurance for your private 4-wheelers (cars, SUVs etc.), or your 2-wheelers (bikes, scooters etc.)
- A firm can take commercial motor insurance for vehicles in their name
There are generally two types of liabilities that are covered in motor insurance policies:
- 3rd party liability: This compensates for the damages caused to other individuals or their vehicles when involved in an accident with your vehicle. By law, this type of motor insurance is mandatory in India
- Comprehensive plan: This includes 3rd party liability cover as well as for you and your own vehicle
Off late a new type of motor insurance policy has been approved by the IRDAI. This is known as Pay as you go policy wherein you pay only for the kms driven. Premiums are calculated as per the declaration given at the time of the policy.
- Another way of classifying motor insurance (both 2-wheeler and 4-wheeler insurance ) is in the scope of their coverage:
- - Regular policy (with depreciation): This is the same as a Comprehensive policy as mentioned above. In this kind of motor insurance policy, the insurable value of your vehicle is calculated basis the depreciation caused due to the age and condition of the vehicle. Additionally, in this kind of policy, there are many exclusions, like generally plastic parts are covered only for 50% compensation.
Inclusions in motor insurance (keeping aside exclusions listed later):
- Terror act
- Other accidental damages
Exclusions in motor insurance
- Damage due to driver being under the influence of alcohol or drugs
- Illegal usage of the vehicle
- Not having a valid driving license
- Loss outside the jurisdiction (i.e., India)
- Any other loss which violates the policy agreement