Inclusions and Exclusions of Motor Insurance Policy
28
Dec 2024

Introduction

Driving without insurance is risky and illegal, even if you have a valid driver’s license. Car insurance is essential for every vehicle owner, whether the car is new or old. Many times, dealerships offer pre-determined insurance policies through affiliated insurance companies. However, if they don’t, purchasing insurance before driving your car on the road is crucial.

Car insurance provides financial protection by covering various expenses in the event of an accident or damage. Policies are usually valid for a set period, and owners must renew them before expiration to avoid late fees. Terms, coverage, and validity may vary between insurers, so comparing policies online is always a good idea before deciding.

Here’s an overview of the common inclusions and exclusions in motor insurance policies to help you make an informed choice.

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Common Inclusions Under Motor Insurance Policy

Motor insurance policies typically offer two types of coverage: Third-Party Cover and Comprehensive Policy. Below are some of the common inclusions in both:

Third-Party Cover

  • Personal Coverage: This covers the policyholder in case of an accident that results in injury or death. In the case of serious accidents resulting in partial or complete disability or even death, the insurance covers medical expenses or provides compensation to the family.
  • Faulty Machinery: If the vehicle is found to have manufacturing defects right from the time of purchase, the policyholder may claim benefits under third-party cover. However, this does not include damages caused by wear and tear or normal usage.

Comprehensive Policy

  • Accident Damage: One of the most critical inclusions is coverage for damages caused by accidents. Repairing or replacing damaged parts can be expensive, but a comprehensive insurance policy covers the cost under the “Own Damage Cover” section.
  • Unforeseen Circumstances: Comprehensive policies also provide protection against natural disasters like earthquakes, floods, landslides, and other calamities. In addition, they cover damages caused by fire, explosions, riots, and strikes.

Also Read: Multiple Ways to Check Vehicle Insurance Status Online

Common Exclusions Under Motor Insurance Policy

Even the best motor insurance policies have exclusions where coverage is not provided. Here are some common exclusions to be aware of:

  • Intoxication: The insurance policy will not cover any accidents or damages caused if the driver is found to be under the influence of alcohol or drugs. No compensation will be provided in such cases.
  • Illegal Driving: No coverage is provided if the driver is underage, has no valid driving license, or is not legally allowed to drive in the country. Insurance companies also deny claims if the vehicle is used for illegal purposes.
  • Criminal Activities: Accidents or damages resulting from the vehicle being used in criminal activities, such as theft, murder, or staged accidents, are not covered by insurance.
  • Policy Expiration/Lapse: If the insurance policy has expired and an accident occurs during this period, the insurance company will not cover the damages. Always ensure timely renewal of your motor insurance policy to avoid such situations.

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Conclusion

Understanding the inclusions and exclusions of a motor insurance policy is essential to ensure you have the right coverage for your needs. While policies provide financial protection against accidents, natural disasters, and unexpected circumstances, certain limitations, such as drunk driving or policy lapse, may void coverage. To avoid unexpected surprises, always read the terms and conditions carefully before selecting or renewing your motor insurance policy.

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Common Inclusions and Exclusions of Motor Insurance Policy FAQs

  1. What is included in a Third-Party Motor Insurance policy?

Ans. Third-party cover includes:

  • Personal Coverage: Compensation for injuries, disabilities, or death caused by accidents involving the insured vehicle.
  • Liability for Damages: Covers damages to third-party property or injury/death caused by the insured vehicle.
  1. What is covered under a Comprehensive Motor Insurance policy?

Ans. A Comprehensive Policy includes:

  • Own Damage Cover: Costs of repairing or replacing the insured vehicle after an accident.
  • Natural Disasters: Damages caused by natural calamities like floods, earthquakes, and landslides.
  • Man-made Disasters: Coverage for damages due to riots, fire, explosions, and strikes.
  1. Are natural calamities covered under motor insurance?

Ans. Yes, comprehensive policies cover damage caused by natural calamities such as earthquakes, floods, storms, and other unforeseen events.

  1. Does motor insurance cover personal injuries?

Ans. Yes, personal injury coverage is included in third-party insurance, which covers medical expenses for the policyholder in case of accidents causing disability or death.

  1. What are the common exclusions in a motor insurance policy?

Ans. Common exclusions include:

  • Intoxication: Accidents caused by driving under the influence of alcohol or drugs.
  • Illegal Driving: Driving without a valid license, or by underage or unauthorized drivers.
  • Criminal Activities: Damages from illegal activities involving the insured vehicle.
  • Policy Lapse: Accidents occurring after the policy has expired are not covered.



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