One of the important terms associated with your Car Insurance policy is basic premium. Basic premium is a key element that determines your coverage and cost. It is the foundation of your Car Insurance policy, supporting the coverage that the policy provides. The basic premium in Car Insurance enables every car owner to be financially and legally secure. This blog explores the key terms associated with basic premium in Car Insurance.
What is Basic Premium in Car Insurance?
The basic premium in Car Insurance is the amount you pay for the essential protections under your policy. It includes Third-Party Liability Insurance, mandatory under the Indian Motor Vehicles Act, 1988. If you cause an accident, your basic insurance policy will cover the cost of the damages you have caused to others’ property.
The basic premium is a starting point, and add-ons like Zero Depreciation or Roadside Assistance can be added to your Car Insurance policy to fit your financial needs. The comprehensive cover and add-on charges will be added to the basic premium.
What is Third-Party Liability Insurance?
Under the Indian Motor Vehicles Act of 1988, Third-Party Liability Insurance is mandatory for every vehicle owner in India. It protects you against financial liabilities that you incur because of damages caused to third parties. The term ‘third party’ refers to an individual or entity not included in the insurance contract between you and your insurance provider.
Here is what Third-Party Liability Insurance typically covers:
1. Property damage: Third-party liability insurance covers the cost of damages that you cause to someone else’s vehicle or property.
2. Injury to others: The medical expenses for injuries caused to third parties when you get into an accident are covered.
3. Legal costs: The policy also covers legal expenses if the third party to whom you have caused damages sues you.
Third-party liability Insurance is important for protecting yourself against financial hardship if you accidentally damage someone else or their property.
What is covered under basic premium?
The basic premium in Car Insurance will generally include:
Third-Party Liability: This is mandatory according to the Indian Motor Vehicles Act, 1988, and it covers damages caused by the insurer to third parties.
The Third-Party Liability basic premium in Car Insurance does not cover the following:
Damage to the insured vehicle
Personal injury or death of the policyholder
Theft of the insured vehicle
Damage due to natural or man-made disasters
Contractual liabilities
Accidents caused by driving under the influence or without a valid license
Intentional damage caused by the policyholder