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Inclusions and Exclusions of a Four-Wheeler Insurance Policy

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Buying a car is an important milestone in people’s lives. However, it is equally essential to cover it with the best car insurance plans.As a new car owner, it is vital to scour all the available options and identify the policy that is best suited for your specific needs. However, when you are buying the policy, you need to be aware of what is covered in the insurance and what is excluded. 

The inclusions and exclusions of a car insurance policy depend upon the type of coverage you have availed. Let us look at the two major types of four-wheeler insurance policies in India.

Types of four-wheeler insurance:

There are two types of car insurance coverages in India –

  1. Third-Party Liability Insurance: As per the Motor Vehicles Act, this is a mandatory insurance cover for vehicles in India. Third-party plans offer financial coverage and legal protection against the claims raised by a third party. It covers only the damage caused to the third-party, including death, when the accident is caused by the insured vehicle.
  2. Comprehensive Insurance: Along with the third-party liability coverages, comprehensive or package policies cover the damages to the insured vehicle and the owner-driver. These policies offer all-round protection with coverage against theft, loss or damage caused by fire, self-ignition, explosion, accident, natural calamities, terrorist attacks, strikes, riots, etc. 

Inclusions and exclusions of a third-party four-wheeler insurance policy:

INCLUSIONS EXCLUSIONS
Injury to a third party

If you accidentally cause injury to a third party with your car, then the insurance company is liable to pay compensation to the injured third party.

Injury to the Owner-Driver

While injuries to the third party are covered in case of accidents caused by the vehicle, the owner-driver’s injuries are not covered. No compensation is paid to the insured car owner.

Death of the third party

If the accident caused by your insured vehicle leads to the death of a third party, then your insurance company is accountable to pay applicable compensation to the family of the deceased.

Theft or damage to the car

If you sustain damages to your car, due to accidents, fire, natural calamities, man-made problems, etc. or if it gets stolen, no amount is paid by the insurance company.

Damage to third party property

If the accident caused by your car causes severe damage to another person’s car or property, then the onus on covering the damages falls on your insurance provider.

Out of Geographical Location

Every policy has a pre-determined geographical area inside which the claim is applicable. If the accident takes place outside this area, then no claim, not even third-party cover, is paid by the insurance company.

Personal Accident Cover

The IRDAI has made it mandatory for all motor insurance provider to offer a Personal Accident Cover to every owner-driver. The insurer pays out mandated amount of ₹15 lakhs in case of the death or permanent disablement of the owner-driver.

Driving under the influence

The Personal Accident Cover is not payable if the owner-driver is found to be driving under the influence of alcohol or drugs. The claim is rejected if the death or disability resulted from self-injury, attempted suicide, and suicide.

 

Inclusions and exclusions of a comprehensive four-wheeler insurance policy

INCLUSIONS EXCLUSIONS
Damage to the insured car

If your car suffers damage during an accident or simply while parking, the insurance company will pay for the repair costs.

Lapsed Policy

If you fail to renew your policy in time and it lapses, then no claim will be entertained by the insurance company.

Theft of the insured car

You can file a claim if your car gets stolen. This is where Insured Declared Value comes into the picture. The reimbursement paid by the insurer is equal to the IDV.

Illegal Activities

The insurance company will reject your claim in case the accident was caused during any illegal activity like smuggling, transport of drugs, etc. or if the vehicle was driven by a minor or person without a valid driving license.

Injury to the owner-driver

The injuries caused to the owner-driver during an accident are covered in a package policy. The insurance company will reimburse the medical bills in this case.

Driving under influence

 The compensation due for injury to owner-driver or claims against Personal Accident Cover stand void if the driver was under the influence of alcohol or drugs. Also, if the injury, disability or death result from attempted suicide or self-injury, the claim stands rejected.

Personal Accident Cover

In case the accident results in the death or permanent disablement of the owner-driver that insurance company pays the specified sum to the legal beneficiary. The IRDAI has mandated the amount to be ₹15 lakh.

Damage caused by deliberate actions

If the insurance company finds out that the damage to the car is deliberately caused, the claim will be rejected. Deliberate actions include fraudulent damage, staged accidents, etc.

Third-party injury, damage, or death

A comprehensive policy also covers third-party liabilities. Any injury to the third party, including death, as well as damage to the third-party property, is covered and reimbursed by the insurer.

Unspecified use

There are separate policies for commercial and private vehicles. So if a private vehicle is used for commercial purposes or for public transport, any claim will stand rejected.

Natural hazards

The damage caused by natural calamities like floods, lightning, landslides, earthquake, etc. is covered by the insurance companies. 

Consequential damage

The damage that results due to the policyholder’s negligence of an existing mechanical issue is called consequential damage. Thus, if you know there is an oil leak in the engine and eventually end up busting the gearbox, the claim won’t be settled.

Man-made hazards
The comprehensive insurance policy covers the damages caused by man-made disasters like terrorist attacks, riots, strikes, fire, etc.
Driving outside the geographical area

Every insurance policy is applicable to a pre-specified geographic region. If the accident takes place outside this area, the insurance company will reject the claim.

 

Conclusion

The inclusions and exclusions mentioned above are based on the standard coverage of a generic four-wheeler insurance policy in India. However, the huge number of insurance providers brings with it varied four-wheeler plans and coverages. Also, companies offer a host of additional coverages with the base policy. Insurance companies like Tata AIG offer attractive add-ons like Depreciation Reimbursement, Return to Invoice, Daily Allowance, Roadside Assistance, NCB Protector, Key Replacement, Tyre Secure, Engine Secure, and many more. Therefore, it is wise to study the offerings of your policy and finalise the one that suits your needs the best!

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