What is Car
Insurance?
Insurance is a protection against the financial loss arising
on the happening of an unexpected event. A person can avail this protection by
paying a premium to an insurance company. The primary purpose of Car Insurance
is to provide financial protection to the policy holder against losses incurred
due to any physical damages to their vehicle. Car Insurance is a type of Motor
Insurance/ Auto Insurance or Vehicle Insurance. But sometimes, they all can be
used interchangeably.
The losses and damages to your car covered under the Car
Insurance may include:
1. Loss or Damage to your vehicle against Natural Calamities
Example: Fire, explosion, self-ignition or lightning,
earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone,
hailstorm, frost, landslide, rockslide.
2. Loss or Damage to your vehicle against Man-made
Calamities
Example: Burglary, theft, riot, strike, malicious act,
accident by external means, terrorist activity, any damage in transit by road,
rail, inland waterway, lift, elevator or air.
3. Personal Accident Cover
Coverage for the individual driver of the vehicle while
travelling, mounting or dismounting from the car.
4. Third Party Legal Liability
Protection against legal liability due to accidental damages
resulting in the permanent injury or death of a person, and damage caused to
the surrounding property. A Third Party Liability cover is legally mandatory in
India under the Motor Vehicles Act.
As per the Motor
Vehicles Act, 1988 it is mandatory for every owner of a vehicle plying on
public roads, to take an insurance policy, to cover the amount, which the owner
becomes legally liable to pay as damages to third parties as a result of
accidental death, bodily injury or damage to property. A Certificate of vehicle Insurance must be carried in the vehicle
as a proof of such insurance.
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