With the advent of technology in the field of automobiles, comfort (safety & luxury) has increased many fold in the way we commute & so has the vehicle maintenance & repairing costs. Motor insurance is most important for all vehicle owners – as it protects them from huge repairing bills in unfortunate event of an accident.
Before we understand different policies, we should know who all are involved in the process of getting insured & procuring claim. There are 2 parties involved in Getting Insured & 3 parties involved during Claim. These parties are namely :
- First Party – Vehicle Owner who purchases the Insurance Policy.
- Second Party – Insurance Company which covers the risk by selling the Insurance Policy.
- Third Party – Victim (other person involved) in unfortunate event of an Accident.
Now, let’s move forward to understand what options are available with the vehicle owners to get their daily & highly used asset insured. There are 3 types of Motor Insurance available which are as follows :
- Third Party Insurance.
- Comprehensive Insurance.
- Zero Depreciation Insurance.
Third Party Insurance :
Third Party Insurance also known as T.P. Policy or Liability Only Policy is the basic insurance policy apart from being the cheapest option available.
This policy simply covers the liability payable to the Victim (other person involved) in unfortunate event of an accident & no claim of any sort is payable to the Vehicle Owner for damage to his own vehicle however the driver is insured & does gets compensated in case of death.
Comprehensive Insurance :
Also called First Party Policy or Package Policy – it is one level higher & is costly than Third Party Insurance, as valuation of the vehicle is done & additional premium charged for insuring the vehicle upto that value.
In addition to facilitating payment of claims to the Third Party, this policy compensates Vehicle Owner for the repairing of his damaged automobile but after making depreciation deductions according to the age of the vehicle & its damaged parts. Different parts like glass, plastic, metal, rubber etc carry different depreciation % which also varies according to vehicle age.
Zero Depreciation Insurance :
Zero Depreciation or Zero Dep. Insurance is the costliest & most beneficial policy available as on date. Here, additional premium is demanded over & above the premium charged for vehicle value apart from the Third Party charges.
This policy compensates Third Party expenses as well as the repairing cost of the damaged vehicle – that too without any deductions for depreciation whatsoever.