First-party Car Insurance Explained: Benefits, Inclusions & Exclusions You Must Know
Car ownership comes with responsibilities, and protecting your vehicle from unexpected risks should be a top priority. First-party car insurance, often referred to as comprehensive car insurance, provides extensive coverage that goes beyond just third-party liabilities. It ensures that you, your vehicle, and other road users are financially protected in case of an accident, theft, or natural disaster. Understanding its benefits, inclusions, and exclusions can help you make an informed decision and choose the right policy for your needs.
What is First-Party Car Insurance?
First-party car insurance is a type of coverage that protects the policyholder’s vehicle against various risks, including accidents, fire, theft, and natural disasters. Unlike third-party insurance, which only covers damage caused to other people or property, this policy provides financial assistance for repairing or replacing your own car. It also includes third-party liability coverage, ensuring that you are legally compliant while driving on the road.
This policy is designed to provide complete peace of mind to vehicle owners, offering protection against damages caused by unforeseen circumstances. Additionally, optional add-ons allow policyholders to enhance coverage based on their specific requirements.
Key Benefits of First-Party Car Insurance
1. Extensive Protection for Your Vehicle
First-party insurance covers damages caused by accidents, theft, vandalism, and natural disasters such as floods, earthquakes, and storms. This ensures that the policyholder does not bear the financial burden of repairs or replacements.
2. Coverage for Third-Party Liabilities
In addition to protecting your own vehicle, this policy includes coverage for third-party liabilities. This means that if your car is involved in an accident that results in injury, death, or property damage to another person, the insurance will cover the associated costs.
3. Hassle-Free Cashless Repairs
Most insurance providers offer a cashless repair facility at network garages, allowing policyholders to get their cars repaired without having to pay upfront. This makes the claims process smoother and more convenient.
4. 24/7 Roadside Assistance
Many insurers provide round-the-clock roadside assistance as an optional add-on. This feature is especially useful in situations like car breakdowns, flat tyres, or running out of fuel, ensuring that you are never stranded.
5. No-Claim Bonus (NCB) Rewards
If a policyholder does not make any claims during a policy term, they become eligible for a No-Claim Bonus, which offers a discount on the insurance premium during renewal. This incentive encourages safe driving and reduces long-term insurance costs.
6. Customisable Add-Ons
First-party insurance allows policyholders to enhance their coverage with optional add-ons. Some popular add-ons include zero depreciation cover, engine protection, return to invoice cover, and consumables cover, among others.
What Does First-Party Car Insurance Cover?
A comprehensive first-party car insurance policy provides the following coverage
1. Own Damage Cover
This covers the repair or replacement costs of the insured vehicle if it suffers damage due to an accident, theft, fire, or a natural disaster. Without this coverage, the policyholder would have to bear the financial burden of repairs.
2. Third-Party Liability Cover
This covers legal and financial liabilities arising from accidents that result in injury, death, or damage to another person’s property. This is a mandatory requirement under Indian motor vehicle laws.
3. Personal Accident Cover
First-party insurance includes personal accident coverage for the owner-driver. In case of accidental death or permanent disability, the policy provides financial compensation to the insured or their family. Some policies may also extend coverage to passengers.
What is Not Covered Under First-Party Car Insurance?
Despite its wide coverage, there are certain exclusions to be aware of
1. Wear and Tear of the Vehicle
Normal wear and tear, ageing, and mechanical or electrical breakdowns are not covered under the policy. Regular maintenance and servicing are the owner's responsibility.
2. Driving Under the Influence
If an accident occurs while the driver is under the influence of alcohol or drugs, the insurance claim will be rejected. Driving under the influence is not only a legal offence but also a major risk factor for accidents.
3. Driving Without a Valid Licence
If the driver involved in an accident does not hold a valid driving licence, the insurance company will deny the claim. It is crucial for all drivers to have a valid and up-to-date licence.
4. Intentional or Fraudulent Damage
Any intentional damage caused by the owner to make a fraudulent claim will not be covered. Insurance fraud can result in severe legal consequences.
5. Accidents Outside the Coverage Area
If the vehicle meets with an accident outside the geographical limits defined in the policy, the insurer may not cover the damages. Some policies provide an option to extend coverage if required.
How to Buy or Renew First-Party Car Insurance?
Purchasing or renewing first-party car insurance is now a straightforward process, especially with online platforms offering instant policy issuance. Here’s how you can buy or renew your policy:
- Visit the official website of your preferred insurer and select the first-party car insurance option.
- Enter details such as the car’s model, make, registration number, and city.
- Choose a policy plan that suits your coverage needs and budget.
- If renewing, provide your previous policy details to ensure a seamless continuation.
- Apply for No-Claim Bonus benefits if eligible to get a discount on the premium.
- Select any add-ons to enhance your coverage.
- Review your policy details and personal information before making the payment.
- Once the payment is completed, your insurance policy is issued instantly.
If your vehicle is damaged or stolen, follow these steps to file a claim
- Inform Your Insurer – Immediately contact your insurance provider and report the incident.
- Provide Necessary Details – Submit details of the accident, including date, time, location, and photographs if available.
- Obtain a Claim Reference Number – The insurer will provide a claim reference number to track your request.
- Vehicle Inspection – The insurer will send a surveyor to assess the damage and estimate repair costs.
- Claim Settlement – Once the inspection is complete and documents are verified, the insurer will either approve cashless repairs at a network garage or reimburse the repair expenses.
Disclaimer: This article is for informational purposes only and does not constitute financial or insurance advice. Policy terms and conditions vary across insurers, so it is advisable to read the policy document carefully before purchasing.