It is type of motor insurance that is used to provide financial coverage of the vehicle against any damage like accidents, theft, fire and any other natural calamities. Hence, third party insurance also included in the comprehensive insurance. Before to know in detail about comprehensive insurance we have to know about insurance and its types.
Insurance is defined as a financial instrument that provide a risk coverage against any loss occurred what one could insure. It is an invisible product and pays out a lump sum of money either on the loss or damage to replace it in a certain period of time.
It is also defined as one of the most effective risk management financial tool that provide protection to the thing one could insured from financial losses. The primary usage of insurance is to provide risk coverage against a contingent risk or any uncertain loss.
Insurance is offered by an insurance company that they collect a certain amount of money from the people and provide an assurance for the coverage of the insured thing with some terms and conditions.
Categories of Insurance
There are two major categories of insurance in the insurance industry. Under that categories there are many types of insurance available to insure all the things that what people having themselves. The categories of insurance are as follows.
- Life Insurance
- Non-life or General Insurance
In these two categories of insurance contains many combinations of coverage and benefits that helps people to avail it according to their need.
1) Life Insurance
Life insurance is a contract between the life insurance company and the life insured, where the insurer promises to pay a sum of money or how much the life insured took a coverage himself to the designated beneficiary, upon the death of insured person. It is one of the few investment options that provide financial security to the people along with maturity benefit, including tax benefits.
Even though having these much of benefits, the primary objective of life insurance is to provide financial security or income replacement for their family in the event of life insured’s death. Human life is made up of the happening of unexpected and uncertainties. So, it is important to the people, who has a financial dependent would benefit from investing in life insurance.
Life Insurance is not only providing security to the insured life, beyond that for achieving their life goals it plays an important part in their life. For that life insurance is designed in various types to fulfill the different goals in different stages of their life even the life insured is alive or not. The different types of life insurance are as follows.
It provides only life coverage of life insured in the event of death in specified policy term. Now a days the term insurance is available in the form of returning of premium that the life insured will get the paid premium at the end of the policy term.
It provides life coverage along with the maturity benefit as lump sum or in a period of time as income. In this type of insurance, the premium paid by the people have invested in various Government bonds and securities, which provide guaranteed returns. Depends on the maturity benefit it is categorized in to various plans as follows.
- Whole Life Insurance
- Savings and Investment Insurance
- Endowment Life Insurance
- Child Life Insurance
- Moneyback Insurance
ULIP Life Insurance
This type of insurance is same as traditional insurance that it guaranteed only the life coverage of the insured and the premium paid by the people are invested in unit liked products, which is not guaranteed. But the maturity benefit depends on the market movements and profit arrived in the share market.
Retirement Life Insurance
It is the combination of either traditional or ULIP insurance along with life coverage of insured. Depends up on the age the returns are changed as per the type of policy.
2) Non-Life or General Insurance
As the name itself, other than human life all asset owned by an insured, which may be having the chance of risk for loss or damage can covered under general insurance. In general insurance, almost everything can be insurable as per the acceptability of the insurance companies. The following are the different type of life insurance in India.
- Health Insurance
- Motor Insurance
- Home Insurance
- Marine Insurance
- Commercial Insurance
Other than these above type of insurances, general insurance company offers some of the unique insurance policy that provide protection to human life in some uncertain incidents happening in a specified period. The following are the insurance offered under general category for covering the human life in an affordable cost.
- Accidental Death Insurance
- Accidental Death and Disability Insurance
The above insurance provide only coverage in the event of death or disability due to accident only.
An insurance, which is used to provide a coverage from any financial losses and damages for all types of motor vehicles like motor cycle, car, jeep and commercial vehicles is called motor insurance. It is a type of general insurance but unlike any other insurance, the government has made motor insurance mandatory for the safety of the vehicle owner and others.
In India, as per the motor vehicles Act 1988, it is mandatory to have at least third-party insurance for all vehicles to dive legally. Here we have to see detail about third-party insurance.
Other than third party insurance, to protect the damages made by the owner and damages caused by any other incidents like theft, fire, natural calamities, an optional insurance is used, called comprehensive insurance.
About Comprehensive Insurance
The comprehensive insurance policy is whole cover vehicle policy that provide financial coverage to both the third-party damages as well as own damages and losses. The comprehensive coverage includes the coverage against the damage made by the unforeseen events such as flood, theft, fire and any other natural disasters.
Other than the damages covered in the comprehensive policy, one can avail an additional add-on for many other specific coverages along with the insurance like zero depreciation, road side assistance…etc.,
Coverages Under Comprehensive Insurance
The following are the coverages offered in the comprehensive insurance and some of the coverages may vary among all insurance companies.
Damages Due to Accidents
A minor accident may cause lots of damages to the vehicle and that is more expensive to repair or replace. Hence, comprehensive policy provides the coverage for that.
Due to an accident or any other incidents, other than the owner and their vehicle, third-party vehicle may damage or the people may have harm. For providing a protect for third-party is mandatory as per the Indian government motor vehicles Act. It includes along with the comprehensive vehicle policy.
Theft of Vehicle
Unfortunately, if a vehicle has been lost due to theft, as per the comprehensive policy the owner could provide a legal complaint to find it or the insurance company will provide the coverage amount to replace it.
Natural Disaster Damages
The damages made by the natural disasters like flood, cyclone, rain and any other calamities could be covered under the comprehensive insurance.
Damages due to fire
If a vehicle has damaged due to fire, the comprehensive policy will provide a coverage to repair it.
Accidental Death or Injuries
Other than providing a coverage to the damage of vehicle and third-party, the comprehensive insurance will provide the coverage for the injuries for the vehicle owner due to accident and will provide insured amount to the nominee in the event of death of the policy holder.
Add-on to be Added with Comprehensive Insurance
In comprehensive insurance, some add-on could be added to protect the vehicle parts and to avail other specific services along with it. The add-ons are as follows.
Zero Depreciation Cover
In order to maintain the original value of the vehicle for any claims without any depreciation up to 5 years old vehicle, zero depreciation add-on is used.
Breakdown Assistance or Road Side Assistance
Wherever one need a help while struck on road due to any vehicle breakdown this add-on is used to provide assistance without intimating it as a claim.
Engine & Gearbox Protection
This add-on is used to protect vehicle engine and gear box damage at all possible times while comprehensive insurance without this add-on only protect engine and gear box damage due to an accident only.
Tyre Protect Cover
This add-on is similar to the engine and gear box protection add-on that it protects the tyre of the vehicle in all damageable situations.
Return to Invoice Cover
This add-on cover is ideal for new cars and used to keep the vehicle as good as new. Incase of any damage, theft and any other major replacements this add-on used to provide complete value as mentioned in the invoice.
In comprehensive insurance, personal accident and injury coverage for owner driver is included. To provide a coverage for the passengers who are all traveling in that vehicle this add-on is used.
Exclusions of Comprehensive Insurance
The following are not covered under third-party insurance,
Drunk and Driving
If a person damages the third-party liabilities by consuming the alcohol, the owner won’t get a third-party coverage under third-party insurance.
Driving without License
While driving, if a person only having Learner’s license and don’t having valid driving license, the damage caused by them could not covered under third-party insurance.
The damages arriving after an accident is called consequential damages and it could not be covered in the comprehensive insurance coverage. It can cover by using the separate add-on.
In some situations, like flood and any other natural disaster, one should start or travel in their vehicle as per the manual provided by the manufacturer to avoid damages. Such that claims could not covered in comprehensive policy.
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