A motor insurance gives you the financial cushion when your vehicle suffers a damage. It is mandatory for every vehicle plying on Indian roads to be insured. However, it is important for you, as an owner, to know what is covered under motor insurance. In this article, we will focus on the coverage offered by most motor insurance plans.

Coverage against damages suffered due to natural calamities

The wrath of nature is beyond the control of humans. Most motor insurance plans give you financial coverage against damages suffered by your vehicle due to natural calamities such as fire, earthquake, floods, lightning, etc.
In other words, the insurer compensates the cost you incur while repairing your vehicle due to damages suffered because of the aforementioned natural calamities.

Coverage against damages suffered due to man-made calamities

Most motor insurance plans apart from covering damages suffered due to natural calamities also compensates for losses suffered due to man-made disasters such as riots, terrorist activities, theft, burglary etc. Thus, with a motor insurance plan in place, you have the financial backing for the losses suffered due to the above man-made calamities.

Coverage against third-party liability

This is another important coverage offered by motor insurance policies. There might be cases when a third-party suffers damages due to your vehicle. In such a scenario, a motor insurance policy covers up these losses. This type of motor insurance is known as third-party insurance. As per the Motor Vehicles Act 1988, it is mandatory for every vehicle to have this insurance. Be it death, disability, sizeable property damage or an injury suffered by a third-party, the insurer pays the compensation. Thus, you are shielded against the financial liability arising towards damages suffered by a third-party.

Personal accident cover

A motor insurance plan also provides compensation for injuries suffered by you due to an accident. While earlier a personal accident (PA) cover was bundled with a motor insurance plan, following a diktat of the Insurance Regulatory Authority of India (IRDA), it has now been unbundled.

It means that if you already have a standalone PA cover, you are not required to buy it again while availing a motor insurance policy. However, in case you don’t have it, you need to opt for it while buying a motor insurance plan.

While these are some of the most common coverages offered by motor insurance plans, you can also get additional cover by opting for add-ons. There are several add-ons which you can opt for along with your motor insurance plan. Some of the most common ones are zero-depreciation cover and engine protection cover.

While a zero-depreciation cover offers coverage without factoring in depreciation, an engine protection add-on compensates for damages suffered by your vehicle’s engine. Note that an add-on marginally increases your motor insurance premium.

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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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