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What Car Insurance Coverage Should I Get?

What car insurance coverage should I get?

Car insurance in India is mandatory by law. Broadly, car insurance can be of two types, the compulsory third-party insurance policy and the comprehensive or bundled plan providing the benefits of both third-party insurance as well as own damages cover.

The Motor Vehicles Act has not specified any threshold in case of car insurance coverage.

But insurers are liable to provide a maximum coverage of Rs.7.5 lakh in case of third-party property damage. However, there isn’t a specific ceiling in case of bodily injury or death.

Consider the points given below while determining coverage limit:

Personal assets

Ensure coverage of your personal assets while purchasing car insurance.

The higher the value of your personal assets, the higher should be your coverage to ensure your personal belongings are safe in times of financial distress.

Budget

Consider the amount you are able to pay while meeting other financial obligations, as non-payment of premium can lead to lapse of coverage.

Risk appetite

Consider the amount of money you are willing to pay in case of out of pocket payments.

Value of the insured asset

If your car is new or valuable, you might wish to invest in some insurance riders providing extra coverage.
 

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