Looking for motor insurance? Know what type of policy you need

There are a number of motor insurance plans available in the market for customers to choose from.

While it is important to buy a motor insurance cover for your vehicle, it is more important to know what type of motor insurance you really need. Even before you start looking for a motor insurance policy online, you first must assess your needs and evaluate what type of policy you really want. There are a number of motor insurance plans available in the market for customers to choose from.

The foremost thing you need to decide is whether you just need a third-party cover or a comprehensive motor policy. While a third-party insurance—mandatory requirement by law—only covers damages caused by your vehicle to the third party, a comprehensive motor insurance policy provides adequate coverage to both third-party and your vehicle.

Third-party cover

As the IDV (Insured Declared Value) of your vehicle dwindles over the years, you might not want to spend a lot on buying a comprehensive motor insurance policy for your vehicle. This is mostly because getting your car repaired for small bumps and scratches by yourself will be much cheaper than paying a high premium for a comprehensive motor policy. Also, as your car ages, you may not be driving it much and only be using it for driving to nearby places.

However, no matter how little you may drive your car, if you plan to take it on the road, it is mandatory to have valid insurance cover. In order to address this issue, you should buy a third-party insurance cover for your vehicle that is not only affordable but also gives you the permit to drive on roads. Usually, a third-party cover is 50 – 60% cheaper than comprehensive motor insurance policies yet provides the required coverage.

Buy a comprehensive plan

In case you drive a recently purchased vehicle or your vehicle is just two to four years old, it is always better to buy a comprehensive motor insurance policy that covers you for both third-party damages and own damages. In case of an accident with your vehicle, your insurer will pay for the damages. Apart from accidental damages, your insurer will also pay for damages due to fire, floods, earthquake and other natural calamities, along with theft.

To enjoy overall protection of your vehicle, you may also choose to buy different add-ons to enhance the protection of your vehicle.

There are various add-ons available in the market which provide different extent of protection. Some of such add-ons are Zero Depreciation Cover, Return to Invoice, Roadside Assistance, Engine Protection, and NCB Protector.

The writer is head, Motor Insurance, Policybazaar.com