What are the different types of motor insurance policies in India for private vehicles?

In India, there are primarily three types of motor insurance policies available for private vehicles, mandated by the Motor Vehicles Act, 1988. These are:

• Third-Party Liability Insurance: This is the most basic type of motor insurance required by law for all vehicle owners in India. Third-party liability insurance provides coverage against legal liabilities arising from third-party bodily injury, death, or property damage caused by the insured vehicle. It covers compensation for damages to the third party but does not cover damages to the insured vehicle or the insured individual. The premium for third-party liability insurance is determined by the Insurance Regulatory and Development Authority of India (IRDAI).
• Comprehensive Insurance: Comprehensive insurance, also known as package policy, offers wider coverage compared to third-party liability insurance. In addition to covering third-party liabilities, it also provides coverage for damages to the insured vehicle due to accidents, theft, fire, natural calamities (like floods, earthquakes, etc.), vandalism, and other perils. Comprehensive insurance policies may also offer optional add-on covers such as zero depreciation cover, engine protection, roadside assistance, and personal accident cover for passengers. While comprehensive insurance is not mandatory by law, it is highly recommended for better protection of the insured vehicle and its occupants.
• Own Damage (OD) Insurance: Own Damage insurance provides coverage specifically for damages to the insured vehicle caused by accidents, theft, fire, and other perils. It does not cover third-party liabilities. Own Damage insurance is typically included as part of comprehensive insurance policies but can also be purchased separately as a standalone policy. It offers coverage for repair or replacement costs of the insured vehicle based on its Insured Declared Value (IDV), which is the maximum amount payable in case of a total loss.

Vehicle owners can choose between these types of motor insurance policies based on their coverage needs, budget, and preferences. While third-party liability insurance is mandatory by law, comprehensive insurance provides more extensive coverage and better protection against various risks and uncertainties on the road. It’s advisable to carefully consider the coverage features, terms, and conditions of each type of policy before making a decision. Additionally, vehicle owners can enhance their coverage by opting for suitable add-on covers offered by insurers.