Despite being a diligent driver, collisions can sometimes be unavoidable, especially on crowded streets. In such situations, the mind starts questioning not only what went wrong but also who will pay for the damage. This is where collision coverage in car insurance plays a crucial role.
Purchasing car insurance is not just a legal obligation; it is a requirement for vehicle owners. Rather, it is an assurance that you are financially protected in situations such as accidents or collisions. If you are still wondering what the role of collision coverage is in your car insurance, let’s get into the details for a better understanding.
What is Collision Coverage in Car Insurance?
Collision coverage is an essential feature of a car insurance plan that steps in to offer financial coverage anytime the insured vehicle gets damaged due to a collision. If the insured vehicle collides with another vehicle or any stationary object on the street, the insurance company pays for the damages. This way, you do not have to worry about getting dents removed from your car.
Remember that collision coverage is typically not available as a separate policy in India; rather, it is included as base coverage in car insurance policies.
How does it work?
Let’s take an example to understand how this coverage works. Imagine you hit a pole or another vehicle while parking your car in a congested space. The repair cost for dents on your car is ₹25,000. You can raise a claim under your car insurance plan. Upon verification, your insurance provider will settle the claim, and you only have to pay a minimal deductible amount.
Understanding the Inclusions and Exclusions in Collision Coverage
Know that when you purchase a car insurance policy with collision coverage, it comes with a specific set of inclusions and exclusions that you must be mindful of. To give you an idea, here are some common inclusions and exclusions under collision coverage.
Common Inclusions of Collision Coverage
1. Collisions
The policy includes coverage for damages done to the insured vehicle due to a collision with another vehicle or a stationary object like a pole, tree, wall, etc.
2. Damages Repair
Expenses incurred on fixing damages, repairs, or replacement are taken care of by the insurance company.
3. Rollover Accidents
Some policies might also cover damages arising out of single-car accidents, such as vehicles rolling over on their side or roof.
Common Exclusions of Collision Coverage
1. Non-Collision Damages
Damages sustained by the insured vehicle due to non-collision activities are not covered under collision coverage. Such activities can include damages due to fire and explosion, natural or man-made calamities, etc.
2. Third-Party Liabilities
Collision coverage is not applicable if, due to a collision, the insured vehicle causes third-party damages, like third-party injury, death, or property damage. In such situations, a third-party car insurance policy is required.
Did you know that, according to the Motor Vehicles Act 1988, every vehicle owner must have at least a third-party car insurance policy to drive their vehicle in India?
3. Personal Accident
Collision coverage is not applicable if the driver or passenger of the insured vehicle has sustained any injury due to a collision. For this, personal accident coverage is required.
Did you know that every vehicle owner must have a personal accident coverage of at least ₹15 lakh?
4. Other Damages
If the insured vehicle has sustained injuries, not pertaining to collisions, collision coverage is not applicable. For instance, if the vehicle is stolen, only a standalone OD or comprehensive car insurance policy with such coverage can offer protection.
Collision Coverage in Car Insurance: Things You Must Be Mindful of
If you are planning to purchase a car insurance policy with collision coverage, it is important to be mindful of a few aspects, such as:
1. The Scope of Coverage
Ensure to read the policy documents thoroughly to understand the scope of coverage. This includes understanding the eligibility, inclusion, and exclusions.
2. The Requirement of Coverage
Remember that it is not legally mandatory for you to have collision coverage in India. However, with coverage like this, you are financially protected in case of a collision. Usually, collision coverage is advised for the following categories of vehicle owners and drivers:
Owners of new or luxury cars
New drivers
Frequent drivers
Individuals driving in congested cities with heavy traffic
Individuals looking for exhaustive coverage.
3. The Policy Choice
Collision coverage is not available as a separate policy. So make sure to pick up a policy that has collision coverage in its base plan or as an add-on option.
4. The Deductible Amount
When you raise a claim under car insurance collision coverage, remember that your insurance does not offer coverage for the entire repair or replacement cost. Your claims are settled after reducing the deductible amount.
What is a deductible amount? A deductible amount is the amount that you have to pay out of your own pocket. This is a predetermined amount, so be mindful of it while purchasing the policy.
4. The Impact on NCB
Although collision coverage can offer reliable financial protection, every time your vehicle sustains a dent or damage due to a collision, raising a claim for every minor dent can lead to losing out on the no-claim bonus. Be mindful about raising claims under this type of coverage.
What is a no-claim bonus? A no-claim bonus is a benefit provided by your insurance company for not raising any claim during one policy year. Read this blog to know all about no claim bonus in car insurance.
How to Raise a Claim Under Collision Coverage?
Raising a claim under collision coverage is a simple process that requires you to follow the following steps:
Inform your insurance company about the collision at the earliest possible instance. Many insurance companies have a stipulated timeframe as well.
Document the damages done due to the collision. You can take photos and videos of the incident.
Fill the claim form and submit all the relevant documents.
Wait for the insurance company to get the vehicle inspected and verify your claims.
Upon approval, you can either get the vehicle repaired at a cashless network garage for cashless claim settlement or submit repair bills for reimbursement claim settlement.
To Sum Up
Collision coverage is an integral part of a reliable car insurance policy. Despite not being legally mandatory, this coverage is a feature you must not ignore. Given the increasing traffic congestion, especially in metropolitan cities, collision coverage is the ultimate saviour for every vehicle owner.
Looking for a reliable car insurance policy with collision and several other essential coverages? Explore Generali Central’s car insurance policies.
