June 2024

Commonly Asked Questions About Motor Insurance Policies


The Motor Vehicles Act of 1988 makes it mandatory to purchase a vehicle insurance policy for all vehicles registered in the country. Being a regulatory mandate, there is no escaping the fact that you need to buy one irrespective of the type of vehicle you own. But there are many question that often trouble buyers, even if you are a first time buyer or regular renew your policy. This article aims to address these commonly asked questions to make vehicle insurance simple for all. Let’s have a look –

#1 Why is vehicle insurance important?

Vehicle insurance is important for the two reasons, one being a legal requirement and other for the protection it offers for the insured vehicle. The regulator, Insurance Regulatory and Development Authority of India (IRDAI), makes buying a motor insurance a law as per the Motor Vehicles Act described above.

Repairing a damaged vehicle can often burn a hole in your wallet. With the backup of a vehicle insurance plan, you no longer need to worry about these expensive repair costs for your damaged vehicle.

#2 What are the types of motor insurance policies available in India?

Be it car or a two wheeler insurance policy, both these types of insurance covers are broadly classified in two types—third-party insurance cover and comprehensive insurance cover.

A third-party plan, as the name suggests, covers legal liabilities that may arise on you, the policyholder, for any accident or damages. These legal liabilities may be due to injuries caused to such third person or property damage too. Also, it is the bare minimum insurance plan one needs to buy. However, it lacks any coverage for your own vehicle. This is where a comprehensive policy steps in.

The comprehensive policy, in addition to third-party coverage, offers own-damage cover wherein the damages caused to your vehicle in such accidents are also covered in the policy scope. In addition, natural calamities often damage cars and bike thereby helping you have a financial cushion against these damage. Not only natural calamities, but also man-made perils like wars, riots, etc. are covered under the comprehensive cover. * Standard T&C Apply

#3 Is there an eligibility criteria to buy a motor insurance policy?

There is no eligibility criteria to purchase a motor insurance cover, the only requirement being you should be the owner of a vehicle.

#4 If a friend is driving my vehicle, will the liability be required to be borne by them instead in the event of an accident?

There is a general rule in motor insurance that the liability follows the vehicle. So, be it bike/car insurance policy, the owner of the vehicle needs to bear one even if someone else is driving your vehicle. * Standard T&C Apply

#5 Is vehicle insurance transferable to cover a different vehicle if I change one?

The simple answer is yes. Vehicle insurance can be amended to cover a different vehicle in case there is a change of ownership or a new vehicle is bought. The premiums for the policy will be adjusted accordingly accounting for the changes in the vehicle and its related risks. You can visit the official website of IRDAI for further details.

These are some of the commonly asked questions concerning motor insurance policies. They will help you select one based on your requirement of one. Also keep in mind that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

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