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What are the Risks Covered Under Comprehensive Car Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 05/10/2023

Owning a car has become a necessity rather than merely a luxury in big cities. While buying a car has become more affordable with financing options, the responsibilities of a car owner have not been reduced. Taking your car out on the roads will require you to buy car insurance.

Car insurance is not only a protective layer for your finances, but it also gives rights to other people. Third-party car insurance protects the lives of others from any financial hazards arising from accidents involving your car.

But should you buy third-party insurance or a comprehensive car insurance policy?

Third-party motor insurance is required by law, whereas comprehensive car insurance will provide your vehicle with all-around protection. And once you have decided to buy comprehensive car insurance, you should understand what risks your policy covers.

Read on to learn more about comprehensive car insurance coverage.

What is Comprehensive Car Insurance?

  • A comprehensive car insurance policy is not mandatory, but experts recommend it because it provides more extensive coverage.

  • Besides third-party damages, the policy covers the insured vehicle's damages.

  • Unforeseeable events such as car accidents, crashes, natural disasters, thefts, etc., can cause these damages.

  • To enhance the comprehensive car insurance policy, you can add riders and additional covers like zero depreciation coverage, NCB protection, roadside assistance, etc.

  • As well as reducing your financial liabilities, this all-risk car insurance covers all your damages.

Risks Covered Under Comprehensive Car Insurance

Below are some classifications of risk in insurance, and comprehensive insurance for cars covers many unexpected perils:

Third-Party Risks: This provides insurance against third-party risks and covers any losses to third parties, such as death, physical injury, or property damage.

Natural Disasters: Any damage to the insured vehicle suffered by natural disasters such as earthquakes, thunderstorms, hurricanes, cyclones, and so on is also covered.

**Man-made Risks include losses to the insured vehicle from man-made risks like strikes, riots, and terrorist attacks.

External Risks: This insurance also covers damage caused by car accidents, windshield damage, and collisions.

In-Transit: Insurance covers any damage your four-wheeler sustains during transit on roads, rails, skies, or waterways.

Theft: The insured vehicle is also covered for total or partial damage caused by burglary or housebreaking.

Personal Accident: This comprehensive car insurance covers the owner or driver's injuries or death. It is possible to receive compensation of up to Rs. 15 lakhs in the event of death.

Fire-Related Risks: The comprehensive coverage includes fire, explosion, or self-ignition risks to the insured vehicle.

Risks Not Covered Under Comprehensive Car Insurance

Consequently, knowing the risks not covered under comprehensive car insurance is crucial to avoid getting stuck during the claim process. This insurance does not cover the following damages or losses:**

Drunk Driving: Comprehensive insurance coverage does not cover driving under the influence of alcohol.

Driving Without a Licence: Damage to the insured vehicle caused by a driver without a valid licence is also not covered.

Outside Geographical Location: Losses incurred outside the defined geographical area will not be covered if the insured vehicle encounters an unforeseeable accident.

Other uses: The comprehensive coverage for four-wheelers fails to cover losses incurred by the insured vehicle when used for business purposes.

Wear and Tear: Regular wear and tear claims on the insured vehicle will not be accepted.

Depreciation: Coverage does not cover depreciation overtime incurred by the insured vehicle.

Breakdown: Insurance does not cover electrical or mechanical failures of insured vehicles.

Comprehensive Car Insurance – Raising a Claim for Coverage

The following steps will guide you through the process of claiming risks covered by comprehensive car insurance:

  • You must report the damage to the insurance company first.

  • When a third-party property is damaged, or an accident occurs, you must file an FIR.

  • Submit a copy of your FIR, proof of identity, proof of residence, a registration certificate, etc.

  • A surveyor will determine the extent of the damage.

  • After that, the vehicle will be taken to a local mechanic for repairs.

  • A cashless claim service is available if the car is being repaired at a network garage; otherwise, reimbursement is required.

Benefits of Buying a Comprehensive Policy

The best way to protect your vehicle from financial liabilities is to purchase a Comprehensive Insurance Policy. The following are some of its advantages:

Own Damage Coverage for the Vehicle

Comprehensive coverage protects a vehicle against damage resulting from catastrophic events. Imagine you hit a tree right in the middle of the road with your car. The car has a problem, and you need to repair that immediately. The insurance company will take care of it for you.

Covers Third-Party Liability for Property Damage and Bodily Injury

The policy also covers liability expenses for property damage and bodily injury of third-party caused by the insured. Think about hitting a man crossing the street while driving on the highway. It was your fault that the man sustained injuries. Under the Comprehensive Policy, you can get reimbursement for such expenses.

Provides Add-on Coverage

It is essential to purchase some additional protection. Under Third Party Liability Policy, zero dep, engine protection, etc., are not allowed. You have to drive on a clogged road due to rainwater. As a result of a jammed engine, the car stopped working suddenly. The repair expenses would have been recoverable if you had purchased the engine protection plan as an add-on.

Difference Between Third-Party Liability and Comprehensive Policy

Parameter Comprehensive Insurance Third-Party Liability Insurance
Coverage Besides covering the vehicle, it also covers bodily injury and property damage to third parties. Only bodily injury or property damage caused to third parties is covered under the policy.
Vehicles For new or a few years old vehicles whose repair costs would be unmanageable, Comprehensive Coverage is recommended. After a road accident or mishap, these repairs will be needed. Only Third Party Liability Insurance is required for vehicles over ten years old whose repair costs can be managed by the owner. There will be no high repair costs for these vehicles.
Cost of Insurance It is more expensive because a comprehensive policy offers broader coverage against injuries, damage, and theft. Third-Party Liability Insurance is less expensive than Comprehensive Coverage.

Conclusion

Although comprehensive car insurance is not compulsory, it can protect your car against many unforeseen damages. You can get both third-party and own damage coverage with this insurance cover. However, check Tata AIG's motor insurance online before buying car insurance. Tata AIG's comprehensive car insurance policy is the best and most affordable policy on the market. Also, Tata AIG offers hassle-free online car insurance renewals.

FAQs

What are the inclusions of a comprehensive insurance policy?

Comprehensive car insurance covers physical damages to the car and injury to a third party. If your car is in transit, and any damage is caused to it, the insurance will cover it. It also covers theft, personal accidents, damage caused by natural or man-made disasters, and fire damage.

Does comprehensive insurance cover third-party liability?

Yes, comprehensive insurance covers damages caused to third-party persons or property.

What are the three main types of risk associated with insurance?

The three different types of risk in insurance are personal risk, property risk, and liability risk.

Reference Links

https://www.policybazaar.com/motor-insurance/car-insurance/articles/risks-covered-under-comprehensive-car-insurance/ https://www.investopedia.com/terms/c/comprehensive-insurance.asp https://www.outlookmoney.com/all-your-money-queries-answered/what-are-the-risks-covered-under-a-comprehensive-car-insurance-policy-1235 https://www.kotakgeneral.com/blog/motor-insurance/risks-covered-under-comprehensive-car-insurance-cover https://www.iffcotokio.co.in/motor-insurance/car-insurance/what-is-comprehensive-car-insurance-in-india

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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