Vehicle insurance is a must for all two-wheeler and four-wheeler owners in India. Although all vehicle owners are legally required to own vehicle insurance, understanding the details of this insurance type is a different story altogether.
As a car or bike owner, it is crucial to know what liability coverage in vehicle insurance means. Once you know the essential details about liability coverage, it will become easier for you to find the right four or two-wheeler insurance for your vehicle.
Liability Coverage Under a Third-Party Insurance Policy
Liability coverage is also referred to as third-party insurance or liability-only insurance. Both four-wheeler and two-wheeler owners are mandated by Indian Law to invest in this insurance. In third-party bike insurance or car insurance, the damage caused to the other party (and not you) during an accident, is financially compensated through the insurance coverage.
Investing in a car or bike liability insurance coverage deprives you as the owner of the insured vehicle, of any financial cover in case you or your vehicle is damaged when you meet with an accident. However, since liability insurance for bikes and cars is compulsory, not complying with this mandate can lead to legal issues and penalties.
Comprehensive Coverage Policy: Liability Coverage and More
Now that liability car insurance meaning is clear to you, it is time to understand what comprehensive coverage in vehicle insurance means. This insurance coverage offers all-round financial protection to you and your vehicle.
Apart from financially protecting your two-wheeler or four-wheeler from theft and damage, comprehensive coverage can be used to cover the expenses of damage caused by natural calamities. Additionally, it covers the cost of damage caused to the third party involved in an accident, similar to a vehicle liability insurance coverage policy.
Insurance Policy Tips for Car and Bike Owners
Check What Coverage is Offered: Since liability car insurance and comprehensive coverage are the primary two policies offered by most insurers, you have to decide whether you want bike or car insurance liability coverage or comprehensive coverage. Based on factors like how old your vehicle is, or whether or not you need coverage for yourself and your vehicle along with your allotted budget, you can make a decision.
Learn about No Claim Bonus (NCB): No Claim Bonus is essentially the discount your insurer provides on your premiums if you have not raised any claim during your policy term. NCB helps you lower the premium rate when you renew your policy term.
Opt for Add-ons: Insurers provide add-ons like zero depreciation cover, engine protector, pillion ride cover, etc. to enhance the security of your vehicle. Select what add-ons you want and look for insurers whose add-ons match your budget requirements before investing. However, third-party bike insurance does not come with add-ons.
Know How Insured Declared Value (IDV) is Different from Insurance Premium: FInd out what the IDV of your vehicle is and also learn about how much premium you will have to pay for different vehicle insurance policies before you move ahead with your purchase decision.
Conclusion
Now that you have a clear understanding of liability in vehicle insurance, you can make an informed decision about which policy to opt for. Finding the right insurance policy for your vehicle can be daunting, but the results are worth your time. Get quotes from multiple insurance companies before you finalise the one that aligns with your needs.