Things your motor insurance policy won't cover

Motor Vehicles Act makes it mandatory for everyone to buy an insurance cover with the purchase of a vehicle. That your motor dealer can arrange for you or you on your own can buy from any of the insurance companies, preferably after comparing all the plans available in the market. However, it is also important to know what all your plan covers, and what it does not. You can fulfil the mandatory requirement by buying only Third Party insurance, which comes at a lower cost but does not cover damage done to you or your vehicle in an accident. So, it is better to buy a comprehensive plan.  But even in a comprehensive plan, there are certain exclusions. Here we would like to explain what your motor insurance policy may not cover:

What is not covered?

Own Damage insurance constitutes 60 per cent to 65 per cent of a comprehensive plan. But there are a number of things which it does not cover. Therefore, it is better to know the exclusions and various terms and conditions of a plan so that you can take precaution rather than facing claim rejection.

If the person driving the vehicle does not possess a valid driving license at the time of accident, the insurance company will not entertain insurance claim and you will have to bear the entire cost of repairs.

Driving a vehicle under the influence of alcohol or drugs is not covered in almost all policies.

Any sort of damage occurring due to manufacturing defect is also not covered.  

Accident taking place due to improper usage of vehicle is not covered, for example, rash driving.

There is a certain time-frame defined, though differently by different insurers, within you have to inform the insurer about the mishap. Otherwise, your claim for damages may not be entertained.

If your vehicle is not properly registered at the time of accident, you will not be given insurance money.

Every vehicle has a defined capacity. If you are driving an overloaded vehicle and an accident takes place, you will not be entitled for insurance claim.

Any damage done to your vehicle engine due to oil leak or oil starvation is not covered.

Some insurance policies define a particular geographical area, such as Delhi-NCR, and if an accident takes place beyond that, the insurer will not entertain your claim.

Using a personal vehicle for purposes other than it is licensed to, for example as a taxi, will debar you from claiming insurance.

Any deliberate damage done to the vehicle is not covered

Insurance plans do not cover any contractual liability. For example, if you have loaned your car to someone under an agreement, your car will not be entitled for insurance claim.

Any kind of consequential loss is generally not covered. For instance, if lack of maintenance leads to some major damage to the vehicle, it will disqualify you from getting the insurance.

Coverage that can be added by paying extra premium

Since your car depreciates year on year, insurer pays the amount after deducting the depreciation charges of the damaged part(s) and you will have to pay rest of the repair cost but the same can be covered with zero-depreciation add-on.

Mechanical breakdowns such as engine failure or gear box damage are not covered if the damage is caused due to water ingression or leakage. To cover the same you can purchase engine protection add-on.

A 24x7 road assistance which helps a lot in scenarios such as sudden tyre puncture, fuel run -out, etc is not covered in a vanilla policy but the same can be added by paying a nominal cost.

—By Neeraj Gupta- Head of Motor Insurance, Policybazaar.com