In India, as per the Motor Vehicle Act 1988, every four-wheeler owner must have third-party insurance. Besides legal necessity, car insurance is an essential investment that provides financial protection against expenses arising from mishaps or damages involving your car.
While purchasing insurance for your four-wheeler, you must compare car insurance policies available. Collision insurance is a type of car insurance policy you might not be aware of. Continue reading to learn more about this insurance.
What is Car Collision Insurance
Collision insurance is available in other countries as a separate insurance policy. However, in India, you can get this coverage under the comprehensive car insurance policy in India. Any damages to your vehicles arising due to a collision with another object or car are covered under car collision insurance. In other countries, both comprehensive and collision car insurance are offered separately.
The comprehensive policy offers you financial protection against damages to your four-wheeler arising due to fire,vandalism, theft or natural disasters such as floods. On the other hand, car insurance with collision coverage focuses on collision-related mishaps to your insured vehicle.
What Collinson Insurance for a Car Covers and Does Not Cover?
Where collision insurance is sold as a standalone policy, the following are the typical inclusions and exclusions of the policy.
Covers
- In case your insured vehicle gets damaged due to a collision with another vehicle.
- In case your four-wheeler gets damaged in a collision with an inanimate object such as a street light, wall, tree, etc.
- The damages caused to your vehicle in case it rolls over.
Does Not Cover
- In case you lose your four-wheeler due to theft.
- In case your four-wheeler gets damaged because of man-made or natural disasters like earthquakes, floods, fires, or riots.
- The damages caused to another vehicle were caused by accidents.
- The expenses of medical-related bills in case of an accidental injury.
Pros and Cons of Collision Insurance
Pros of Collision Insurance
- It provides coverage for damages occurring due to collisions with stationary objects or other vehicles.
- It provides coverage for repair expenses of your damaged vehicle and offers protection against unexpected financial expenses.
- It is a suitable insurance coverage for four-wheelers, especially against collision-related incidents.
Cons of Collision Insurance
- It does not provide coverage for third-party liabilities; therefore, you are required to purchase it separately.
- It does not provide coverage for mishaps that are beyond your control, such as man-made and natural disasters.
- You cannot purchase it as a standalone insurance plan since, in India, collision insurance is covered under comprehensive or own-damage insurance for cars.
Difference Between Comprehensive Insurance and Collision Insurance
Collision and comprehensive car insurance are sold separately in some countries. Thus, the coverage provided is also different from one another. Below are some critical differences between comprehensive and collision insurance coverage provided.
| Aspects | Comprehensive Insurance | Collision Insurance |
Coverage | It offers coverage against loss or damage caused to your four-wheeler due to natural calamities (floods, earthquakes, hurricanes, etc) and man-made calamities (theft, fire, riots, etc) | It covers damage to your four-wheeler caused by a collision with another vehicle, tree, wall, pole, or other structure. |
Package type | It is a car insurance policy offering holistic coverage. Hence, a comprehensive policy already covers collision insurance. | Collision insurance can also be purchased without comprehensive car insurance. However, it is recommended to buy a comprehensive policy for all-round coverage.. |
Pricing | The insurance premium is expensive because of the extensive coverage offered under this car policy. | The insurance premium is lower because of the limited coverage offered under this car policy. |
Who Should Opt For Comprehensive Car Insurance With Collision Coverage
If you relate to any of the points mentioned below, you should purchase collision coverage along with a comprehensive car policy.
- The area you are located in is prone to man-made and natural disasters or four-wheeler theft.
- You require adequate financial protection during expensive repair costs because of an accident.
- Your four-wheeler is relatively new and has a high market value.
To Wrap It Up
Collision car insurance provides financial protection for four-wheeler owners in case of collision-related damages. It covers the repair expenses of your four-wheeler, regardless of your fault, ensuring peace of mind while driving on the road.
It is essential that you choose the right deductible amount to balance out-of-pocket expenses and insurance rates. Also, remember that in India, you need not purchase collision insurance separately. It is covered under a comprehensive or own-damage insurance policy.