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What are the Types of Vehicle Insurance?

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What are the Types of Vehicle Insurance

Vehicle Insurance is the insurance policy for all types of vehicles plying on the roads of India, be it car, bike, scooty, truck, or any other road vehicles. The insurance provides physical damage and bodily injury, & covers you from property risk as well as liability risk, that may result due to any traffic collision. Vehicle insurance is also known as auto insurance or motor insurance, and it is mandatory to have one while you are on the roads of India.

The types of motor vehicle insurance are categorized based on various factors. Primarily, you must see what type of vehicle you have and accordingly you will choose the types of vehicle insurance. Secondly, you must understand your requirements and based on that you can choose car insurance coverage types.

Never ever get confused with these two types of auto insurance. Always remember, all insurance coverage types are available for all vehicle type insurances; but while finalizing the insurance policy first choose the vehicle type and then coverage type.

In this article you will find all types of auto insurance:

  1. Private Car Insurance
  2. Two-Wheeler Insurance

3.  Commercial Vehicle Insurance

  1. Third-Party Liability Insurance
  2. Collision Coverage
  3. Standalone OD Insurance
  4. Comprehensive Insurance
  5. Add-on Riders

Types of vehicle Insurance by vehicle types

Check here are types of vehicle insurance by vehicle types:

If you own a car and use it for your personal usage, then you must apply for a car insurance. Any four-wheeler that is owned by an individual for daily commuting or occasional usage are bound to carry some important documents while on road. One of those essential documents are private car insurance policy. There are different types of car insurance based on coverage, such as third-party insurance, comprehensive insurance, collision coverage, standalone OD insurance, and add-on coverage.

If you own a two-wheeler and use it for your personal usage, then you must apply for a two-wheeler insurance. No two-wheelers are allowed to ply on the roads without a valid insurance policy. There are two types of two-wheeler insurance:

Bike insurance is mandatory to ride on Indian roads. A bike insurance will cover the damages caused to you, your vehicle and the third-party vehicle and person, based on the type of bike insurance you choose as per coverage.

Scooty insurance or scooter insurance is also mandatory for all scooty riders, as it will cover the damages caused to your vehicle and third party vehicles, based on the type of scooty insurance you select.

Be it types of bike insurance or scooty insurance, the categorizations are as per the coverage policy. There are 5 types of scooty insurance or bike insurance – third-party insurance, comprehensive insurance, collision coverage, standalone OD insurance, and add-on coverage.

Be it a two-wheeler or a four-wheeler, if you are using the vehicle for commercial purposes then you will get a different colour number plate and then your insurance policy type will also change. Usually, the coverage policy types are the same for commercial vehicle as well, but the policy pricing may increase in this case.

Types of Vehicle Insurances by Coverage

You may choose a private car insurance, a two-wheeler insurance or a commercial vehicle insurance, but your coverage policy will help you to enjoy the insurance benefits.

The most common, affordable, and mandatory insurance type is the third-party insurance of a vehicle. As per Motor Vehicle Act 1988, it is mandatory for all vehicles plying on roads of India to have a long-term, i.e., 5 years, third-party insurance coverage. This motor insurance covers the liability caused by you to some other vehicle or person on road, while driving.

This is compulsory as you may encounter some accident on road and a third party can get harmed. In that case, you must bear the cost of damage. This insurance will help you to pay for their loss.

The collision coverage includes the finances that you need to bear for the repair and replacement of vehicle parts that got damaged in an accident or a collision with another vehicle or object, such as tree, house, fence, etc. Under this insurance coverage, the loss due to theft or vandalism is not covered.

The Standalone Own Damage (OD) Insurance covers all new cars, used cars, new two-wheelers, and used two-wheelers. This insurance gives coverage against damages that may have caused on its own. Any damage that your vehicle may have faced while standing on garage, parking, under tree, etc. If your vehicle has faced damage due to fire, natural calamities, theft.

You can apply for this standalone OD Insurance, only if you already have third party insurance.

The comprehensive insurance is perhaps the best insurance coverage of all time as it covers the damage of insured vehicle as well as the third-party liability. If you face any accident on the road, you will be able to get coverage for your vehicle, as well as the third-party vehicle or person. Even if your vehicle is not plying on roads still you can bear the losses of incidents like theft, vandalism, and natural calamities.

Difference between comprehensive and third party insurance is that if your purchase third party insurance, you will only get coverage of third party vehicle or person during collision, but if you purchase the comprehensive insurance, you will cover your vehicle and third-party vehicle, there is no need to purchase any other type of auto insurance.

You may apply for any insurance coverage but over and above that coverage, you may want to apply for some added coverages by paying a nominal cost. The add-on coverages can be zero depreciation cover, NCB protection, invoice cover, engine protection, medical expenses, accessories and more.

In case, you are planning to buy a new or a used vehicle or you have one, apply for vehicle insurance from Droom, one of the leading e-commerce platforms for used vehicles sales in India. Do remember, in case you are driving without insurance, you are liable to pay a fine of Rs. 2000 an/or imprisonment of up to 3 months and community service, or Rs. 4000 for subsequent offence. To avoid any fine or chaos, do apply for an auto insurance today.