What Is 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

 

Moreover, comprehensive coverage and add-ons are purchased separately and are not included in the basic premium.

 

Benefits of basic premium coverage

Here are the benefits of basic premium Car Insurance with Third-Party Liability coverage:

 

1. Financial protection: With basic premium coverage, the costs associated with third-party damages or injuries you accidentally cause to others are covered. This protects you from financial burden.

 

2. Legal compliance: Basic premium coverage ensures you meet India's mandatory legal requirement for Third-Party Liability Insurance and avoid penalties.

 

3. Peace of mind: The basic premium covers liabilities caused to third parties, so you can be more confident on the road and drive with peace of mind.

 

Factors affecting your basic premium

The basic premium with Third-Party Liability Insurance is determined based on the engine's cubic capacity. The Insurance Regulatory and Development Authority of India (IRDAI) sets base premium rates for different capacities. Electric vehicles have their own category for base premium rates.

 

Understanding these factors allows you to make better-informed decisions when buying a Car Insurance policy and add-ons.

 

Finding the right Car Insurance coverage

Choosing a Car Insurance policy should be done after careful consideration. Here is how to go about it:

 

1. Evaluate your needs: The first step is to assess the value of your vehicle, your financial situation, your driving habits, and any specific risks. This will help you narrow down your options and choose the right Car insurance policy.

 

2. Consider add-ons: Depending on your needs, you can consider purchasing some add-ons like Zero Depreciation or Engine Protection Cover.

 

If you are looking for a reliable insurance provider, Shriram General Insurance might be the one for you!

 

With Shriram General's digital-friendly platform, buying, renewing, or claiming a basic premium Third-Party Liability policy is simple and accessible. We also have seamless claims processes, dedicated customer support, and a range of add-on options. Choosing Shriram General Insurance means you can drive with total peace of mind and assured protection.

 

In conclusion

With the basic premium in Car Insurance, you are protected legally and financially. It allows for the mandatory Third-Party Liability policy to cover the cost of the damages you have caused to others’ property. When you understand the concept of basic premium in Car Insurance, you have the fundamental knowledge to make better insurance decisions.

 

FAQs

1. What is basic premium in Car Insurance, and why is it important?

The basic premium in Car Insurance is the amount you pay for the essential protections for 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.

 

2. What is Third-Party Liability Car Insurance?

Third-Party Liability Insurance is mandatory under the Indian Motor Vehicles Act of 1988 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.

 

3. How does my car’s engine cubic capacity affect the cost of basic Car Insurance?

The Insurance Regulatory and Development Authority of India (IRDAI) sets base premium rates based on engine cubic capacities for different types of vehicles. Electric vehicles have their own category for basic premium rates.