All road-legal vehicles are insured as owners feel that their policies will cover most damages. That’s just half of the story, as most policies will not give them 100% financial support, so it’s important to look at all terms before buying one.

Motor insurance had dominated the market in FY 2016-2017 and had contributed about 39% of the gross direct premium earned by the entire general insurance. This was possible through largely an increase the demand for automobiles and the need to have motor insurance irrespective of whether people owned a commercial, passenger vehicles or a two-wheeler. It would help to note here that right now the automobile is undergoing the biggest sales slump since 18 years; only because people are not interested in buying cars and this assumes that they want to take care of the cars they already own, hence the need for car insurance.

Most policies are pretty straight forward, and while providers do pay for damages provided you pay them a premium, there are plenty of things they don’t cover. This includes things like natural calamities and certain man-made situations.

Other policies may turn out to offer the exact opposite – that is they cover theft, collisions, and vandalism, even smaller natural calamities but not extensive damages. But this largely has to do with the kind of capabilities that providers have and either way can be classified in the following ways.

The most popular options available in the Non-Life Insurance Market In India for cars are termed as ‘comprehensive’ and ‘third-party’. The comprehensive policies are the best as they cover all damage claims made you and other individuals. Third-party policies only cover the claims made an external party involved in an accident and have been affected by it. What exactly is car insurance and what does one get out it?

Certain providers might take the extra step and come with customizable policies, where the buyer can choose these ‘add-ons’, that give him and increased protective coverage as much as can be afforded. These add ons are literally added onto basic plan structures. For example, that provides might add value-added services like monthly maintenance or special towing services should the car be damaged beyond functionality.

Other add ons might cover damages to the electrical systems and engines too – this is popular during monsoons when car owners have to cope with an immense financial burden when fixing water damaged engines and electrical sensors. This does help buyers with expensive servicing bills but there are a lot of limitations placed here on the types of damages covered by the providers. 0 depreciation is another well-purchased add on, where buyers will get back full claims on parts that have to be replaced. In this case, their value will not be reduced owing to depreciation, so one gets the current market values on those damaged parts.

The more adds-ons one chooses, the higher their annual premium will be, but they have the advantage of being truly essential services that will come in handy in the worst of times. Research On Global Markets feels that these policy incentives will help this sector to grow. Another growth contributor is that people buying new cars will have to buy insurance cover for three to five years upfront. Maybe, those add on incentives are worth it after all?