7 Types Of Auto Insurance: Which One Suits You The Best?

By Ajinkya

Updated: Tuesday, July 14, 2015, 16:37 [IST]

Indians nowadays are ready to purchase more expensive vehicles than they did previously. And since accidents can occur at any given moment, it is impossible to tell when an unexpected turn could change your life.

Taking care of these vehicles is important, you will notice people cleaning and going to great lengths to keep them in pristine condition. But another important thing they also need to consider is auto insurance in case of major damage.

Internationally, several kinds of automotive related insurance are available to suit customer needs. There are also various companies that provide insurance coverage for every vehicle available in the Indian market.

7 Types Of Auto Insurance: Which One Suits You The Best?

There are seven types of auto insurance that are currently available. We offer you a quick description of each insurance service that an individual can purchase for his prized possession.

Liability Insurance

This is the most basic form of insurance and most governments demand every vehicle have one. In Liability Insurance, when an individual causes an accident to another vehicle or property all expenses are taken care of. The downside is that all damages sustained by the owner and his vehicle will not be accounted for.

Collision Insurance

Having only Liability Insurance means that one's own vehicle damage cost will have to be borne by the owner. In case of Collision Insurance, if your vehicle is damaged, the insurance company will be obligated to pay for damages. By some chance if your vehicle is beyond repair, the company will pay you money that they deem is value of the vehicle prior to the accident.

Comprehensive Insurance

Both Collision and Liability Insurance only consider the car's damages that occur in an accident. In several countries, however, there is a high possibility of your vehicle being stolen, or damaged by people, weather and even animals. To protect your vehicle from every possibility an individual can opt for Comprehensive Insurance. This policy is mostly opted by owners of new vehicles as it provides a safety cushion, when the car feels most precious.

Uninsured Motorist Protection

Uninsured Motorist Protection offers protection just in case the other person does not have insurance or cannot bear your medical costs. Often there would be people without insurance or money to take care of damages caused. Uninsured Motorist Protection provides safety in these situations but is not a common insurance policy people opt for.

Personal Injury Protection

This policy is only for those who do not have a health insurance or MediClaim. With Personal Injury Protection, you can claim medical expenses for yourself as well as the passengers in your vehicle. This is a good option, however, having a general health insurance for you and others in the family will be more sensible.

No Fault Insurance

Currently, No Fault Insurance is not available in all cities and countries. In this policy, no matter who is at fault the insurance company will take care of injuries sustained and property damage caused. This policy can be expensive and does not make sense if your vehicle is old and its value has fallen down in recent times.

GAP Insurance

This insurance is applicable only to those who have purchased vehicles on loan. Just in case a vehicle is rendered useless in a crash, they would still have to pay money to the bank for the vehicle. Gap Insurance will take care of the value of the vehicle only. Some banks make sure you have this facility to save you the trouble.