Types of Auto Insurance or What is Package and Third Party Insurance?

Insurance is the fastest growing market worldwide. It provides coverage against the insured event. For example life insurance covers the insured against death, health insurance provides compensation for medical expenses incurred in the hospital. Similarly, auto insurance or auto insurance covers against accidental damage to vehicles and third parties. Car insurance is part of general insurance. In our daily lives, we use certain types of vehicles to travel from one place to another.

Although no one wants to enter the hospital but in fact, everyone is in danger while traveling on the road. Auto insurance helps us to bear financial losses in case of an accident.

If you are a car owner (car, motorcycle, commercial vehicle) it is necessary to have third party insurance. If the vehicle collides with a person or his property, you are legally liable for damages

Importance of Auto insurance

Cars are an important part of our lives, we can travel anywhere with the help of it. Whether you follow all traffic laws and regulations but because of your fault or fault of someone else, an accident can happen at any time. You should have seen some people driving recklessly on the road, imagine what would happen if you or your car hit you?

In the second case, accept the fact that you are driving very carefully but an error may occur at any time that may damage a third person or his property.

In the event of an accident, you suffer a financial loss or material loss or both due to an accident. Auto insurance helps reduce financial losses. When you damage your car to a person or property, you are legally required to compensate for the loss.

In this case, the insurance company compensates the loss of the other person on your behalf when there is auto insurance. However, if the vehicle is not insured, you must compensate all losses from your pocket.

Types of auto insurance

1. Based on the benefits
  • Third party or only liability policy or third party insurance
  • Package Policy or Comprehensive Policy
2. Types of Auto insurance by vehicle
  • Two-wheeler insurance
  • Private Car Insurance
  • Commercial vehicle insurance
Commercial vehicle insurance

Commercial vehicle insurance is designed for business people who have more than one vehicle to manage their business. In this insurance policy, more than one car is insured once the policyholder has to pay the fixed premium and in return the insurance company compensates the damages caused by his cars in the third party. The insurer also pays for the repair of vehicles (if the package policy is taken).

What is covered in auto insurance?

  • In the event of damage, the third-party vehicle will be given compensation.
  • Damage to third party property shall be compensated.
  • In the event of damage to the insured vehicle due to self-ignorance, fires, explosions, riots, terrorist acts, etc., payment is made for repair. (If package policy)
  • Damage to the insured vehicle shall be paid for by natural disasters such as earthquakes, storms, floods, cyclone, landslides and others.
  • Compensation is also made in an accident caused by the fault of others.
  • Compensation can also be taken for theft / robbery.

In which cases the cover is not available?

  • No claims of damage due to vehicle age were found.
  • If the driver does not have a valid driving license, the insurance company is not obliged to claim any form of claim.
  • Periodic consumption applies to the insured vehicle.
  • The breakdown of electrical and mechanical parts is not covered.
  • If the vehicle is used for illegal activities, no compensation can be provided.

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