LIC Vehicle Insurance Policy – Is This Real? Check All Plan Details Before Purchasing
Suresh works at a private bank and has to travel 45 kilometres every day to reach his office. The one-way journey usually takes two and a half hours. He wonders if he can reduce the travel time a little, and, as a solution, he thinks about purchasing a car.
But, on enquiring about car purchases, he discovered the need to buy an insurance policy along with the car. The showroom sales executive urged him to purchase the insurance policy from AB Insurance company as it offers feature-rich policies at discounted prices.
But Suresh could never think of any other insurer besides LIC since his family members trust LIC for all their insurance needs. Also, Suresh believes that a vehicle insurance policy from LIC will be more feature-rich and less costly than a private insurer.
This prompts Suresh to wonder whether LIC offers a motor insurance policy or not. And if yes, what are his options. Dive deep into this article as we divulge every detail about LIC’s vehicle insurance policy to you and Suresh.
But, before learning more about LIC’s vehicle insurance, let’s understand why Suresh needs to purchase a vehicle insurance policy.
Why is Vehicle Insurance Mandatory in India?
Road accidents kill over 1.35 million people globally every year, and India contributes 11% to the total tally, leading it to earn the infamous first rank. In 2019 alone, India witnessed more than 4.49 lac accidents across the country, in which over 1.51 lac motorists lost their lives.
The figures stated above partly explains the need to make vehicle insurance mandatory in India. Any loss of life or accident is followed by financial distress. Vehicle insurance ensures that the victim or their family never undergoes such financial distress.
Vehicle insurance is a mandatory requirement in India. As per the Motor Vehicles Act, 2019, any vehicle without a valid vehicle insurance policy cannot ply on Indian roads legally. If Suresh drives without a valid motor insurance policy, he may be liable to pay a fine of INR 2,000 and/or undergo three months’ imprisonment. But, this fine and imprisonment apply only to the first offense. If he is caught without valid insurance for the second time, he will need to pay INR 4,000 and/or undergo three months’ imprisonment.
Moreover, if Suresh’s vehicle gets involved in an accident causing bodily or material damage to a third party, Suresh might have to pay the compensation and bear the mental trauma. Hence, buying third-party or comprehensive vehicle insurance is mandatory for everyone driving a car or motorcycle in India.
Now that you are aware of why vehicle insurance is essential for all vehicle owners, let’s understand the differences between comprehensive and third-party vehicle insurance.
Comprehensive or Third-Party Vehicle Insurance – Which Should Suresh Buy?
The primary difference between comprehensive and third-party vehicle insurance is in the scope of coverage. A comprehensive insurance policy covers third-party liabilities and own damage. So, if the vehicle owner gets involved in an accident-causing damage to themself and a third party, the insurer will pay both.
In contrast, a third-party vehicle insurance policy covers only the third-party liability. It usually provides money to the injured person (if any) or covers any loss to their property.
The Motor Vehicles Act, 1988, makes third-party vehicle insurance makes it mandatory as it is the most basic requirement for Indian vehicle owners. However, sensible vehicle owners prefer comprehensive insurance more since it also covers their own damage.
Hence, you must analyse your financial situation and determine whether you will apply for comprehensive or third-party vehicle insurance.
And, as far as our humble private bank employee Suresh is concerned, he has decided to go for comprehensive vehicle insurance.
With this, we come to the section where you will learn about LIC‘s vehicle insurance policy and the available plans. This is also the section where Suresh will get the answer to this primary query – does LIC offer a vehicle insurance policy, and if yes, what are the plans?
Does LIC Offer Vehicle Insurance?
The Life Insurance Corporation of India, popularly called LIC, is the biggest insurer in the country. They offer only life insurance products in the following types of insurance policies:
- Endowment
- Money Back
- Health
- Micro
- Pension
- Term
- Unit Linked Insurance Policy
- Whole Life
Besides the policies mentioned above, you can also purchase the following riders by paying something extra. Riders provide additional coverage to the policyholders and suit extraordinary emergencies.
- Accidental death benefit rider
- Accidental death and disability benefit rider
- Accident benefit rider
- Premium waiver benefit rider
- Critical illness benefit rider
- Term assurance rider
However, as of today, LIC does not offer any vehicle insurance policy. Although you can purchase a health insurance policy and add some riders to increase the Sum Assured (SA). This means that you have to purchase a vehicle insurance policy separately from a general insurance company.
When it comes to a vehicle insurance policy, online insurers often provide higher discounted prices than offline insurers.
So, Suresh is left with no other option than to purchase a vehicle insurance policy from an insurer other than LIC. The following section discusses the top tips you need to consider when buying the best vehicle insurance policy.
Top Tips to Purchase the Best Comprehensive or Third-Party Vehicle Insurance Policy
1. Compare Vehicle Insurance Policies Online
Websites like IIFL Insurance allow you to compare many policies online and pick the best. You can very often find the best deals online since you do not have to pay an exorbitant commission to brick-and-mortar brokers. You can enter a few personal and vehicle details to get the quotes within seconds.
2. Claim Settlement Ratio
Finding the claim settlement ratio is crucial before buying an insurance policy. The claim settlement ratio refers to the total claims settled in a year versus the number of reported claims: the higher the claim settlement ratio, the better the insurer.
3. Difference in the Purchase Price Between Comprehensive and Third-Party Vehicle Insurance
Generally, comprehensive vehicle insurance policy costs are higher than third-party ones. However, sometimes, insurers provide discounted rates on comprehensive policies. It is wise to check the latest rates before purchasing your policy. If possible, buy a comprehensive policy against a third-party as the coverage offered is much higher.
The Decision Time
It’s that time when both Suresh and you need to decide your options well. While the showroom sales executive will always push you to buy the motor insurance policy they prefer, you must stay informed to make the right decision.
IIFL Insurance has years of experience in providing quality, relevant quotes. Follow this link to make your insurance journey smoother and cost-efficient.