Car insurance - Types of car insurance


Car insurance
Car insurance

Planning to buy a car and thinking What is car insurance?  Insurance has a good relationship with buying a car. Whether you buy a car with a loan or full cash, insurance is required.  Each country has specific rules for driving. For example, driving licence, car licences as well as car insurance is mandatory in every country. The main topics of our discussion are what is car insurance?  Types of car insurance and things to keep in mind while insuring a car!  Also there are details about the advantages and disadvantages of car insurance.

What does car insurance cover

Mainly car insurance cover your money security.

Let know at the beginning that car insurance means advance insurance keeping in mind the dangers on the road, there are different types of insurance for cars. If your car is insured then in case the car has an accident or is damaged for any reason then the insurance company will compensate it. Most people think that everyone should have car insurance anyway. Just because you can't tell when it will happen. So,If you have insurance you can be assured of a major accident related to the car.

What is car insurance

Car insurance
Car insurance

Insurance is done to protect your vehicle from unexpected risks. It helps to cover against financial losses which caused by accidents, theft or any third party liability.  While buying a car, there are certain parameters that customers need to consider. A policy can be chosen according to the name of the car from the insurance company, that's called car insurance

In other words, there is no guarantee of an accident in a car or motor vehicle.  As a result of an accident in the case of a motor vehicle, the owner of the vehicle may be injured on the one hand, as well as third parties may be injured. In this case, there is a huge financial risk.


Therefore, risk-adjusted car insurance is a policy that compensates the loss caused by an accident by a certain car insurance company. Car insurance is mandatory according to the laws of each country.  So if you have to use a car then you must insure your car according to all the laws.  Driving without insurance can get you into various legal complications on the road.

Types of car insurance

There are two main types of car insurance Policy and these are below:

1.First party or comprehensive insurance policy: In this insurance policy, the insurance company provides financial compensation only for the losses incurred by the first party due to accidents or other losses.  For example, the car owner gets financial compensation for the medical expenses and any damage to the car due to an accident.  And this insurance policy does not pay any compensation to the insurance company in case of any loss caused by the third party due to an accident.

2.Third party insurance policy:Through this second insurance policy, the insurance company will indemnify the third party for any loss or property damage due to an accident.  And support for legal complications due to accidents.  However, this insurance policy does not indemnify the insurance company for any damage to the motor vehicle caused by the first party due to the accident.

Types of car insurance policy

Although buying a car is not that expensive these days, many owners rush to insure the car after buying it.  Getting car insurance is a really tough job.  All types of car policies are based on the type of wheels you buy, the driving condition of the car, how good the driver is at driving.

Knowing about the motor vehicle policy before buying the car will reduce your hassles and getting the right policy will double the protection of the car.  So let's know about the different terms of the policy.

There are a total of seven types of insurance coverage available in the current market, let's take a look at them.

1.Liability Coverage: This insurance coverage comes into play when the driver of the vehicle is found to be responsible for causing the accident.  Through this coverage the third party bears the expenses related to the repair of the damaged vehicle along with its hospital treatment.  This coverage also covers third party injury, death or vehicle damage.

2.IDV: IDV stands for Insured Declared Value. The amount available in case of theft or accident of the vehicle is determined by the IDV.  If the car is repaired for more than the IDV or if the car is stolen, the insurer has to pay only the IDV value.

3.Policy Tenure: The policy tenure of a vehicle is the length of time the policy is in force.  Usually the car policy has a limit of 1 year.  But nowadays several companies are offering 3 to 5 years insurance policy to entice their customers.

4.Collision coverage:  If a car owner is under this coverage, then the insurance company bears the cost of repairing the car.

5.Personal Injury Coverage: This coverage covers all vehicle owners.  This coverage covers all hospital expenses of the driver and other passengers of the damaged vehicle.  No matter who is at fault, the insurance company is responsible for paying the medical bills.

6.Comprehensive coverage: This coverage includes all possible damage to the vehicle.  The coverage benefits include the damaged vehicle, driver, passenger, another vehicle involved in an accident, the driver of that vehicle as well, due to weather, flood, fire or theft.  This coverage is effective against any damage to the vehicle apart from collision.

7.Uninsured Motorist Protection: If a vehicle is damaged in a collision with another vehicle, and it turns out that the at-fault vehicle does not have an insurance policy, the owner of that vehicle must be compensated.

Advantage of car insurance

car insurance
Car insurance

However, after the comparative review of two types of car insurance systems, you will see their advantages...

Third party: Suppose, third party insurance is done for just 10 dollars.  But you will not get any security. Issue third party insurance only to protect against traffic sergeants. We don't recommend it, avoid it if you can.

First Party: Many commercial insurance companies in the country offer fast party insurance claims. If fast party insurance is taken, the company takes responsibility for any damage to your vehicle under certain conditions. Let's put it a little easier, let's say you bought a premium for 1 lakh dollars

Now if you want you can insure on this whole 100000 dollars or any other figure.  If you do it on the full 100000 dollars, then you have to make an insurance claim for one year with the total premium including VAT.  Let's say the total premium is originally 5000 dollars now with this 5000 dollars you will get your car security for a full 1 year.

In case of a car accident, if the bill comes to 200,000 dollars with proper proof, the company is obliged to pay it.  And if there is no loss within one year, then the next year can be re-issued with a discount of some money. Now a question may come, "If a bill of 20000 dollars comes with a premium of 5 thousand, how will they pay that too?" This is where the insurance company take a risk,because not everyone's car is damaged within 1 year, but even if it is not happen the premium has to be paid. This is how insurance companies adjust things.

So we suggest fast party insurance. Even if the money is a little more, the security of the car will be sure, so if possible, definitely do the fast party. There are many insurance companies in the market, check for yourself who has the best record, who pays the highest compensation, and who does not turn away customers.

Disadvantage of car insurance

Car insurance
Car insurance

Before insuring the car we must check what kind of cover the insurance company will give us, such as medical expenses. Before taking insurance we should check whether the insurance company will cover his medical expenses in case of an accident.  Insurance should be done after knowing well the benefits to be provided in case of third party damages. But the sad thing is that we often don't see these rules in a hurry which becomes a disadvantage for us later.

In car insurance, we have to go to the insurance company (car insurance providers) who provide car insurance services. You can take an insurance policy in two ways. Firstly, by going to the office of the insurance company, many insurance companies also provide online car insurance policies.  From there you can also take the insurance policy online

Whenever you buy a car or bike, you need to insure it. He must have insurance to drive a car or bike.  Driving without insurance is a punishable offence as is driving without a driving licence.  However, if your car is involved in an accident and you have to file a claim with the insurance company to fix it, there are several things you must keep in mind.  If these things are not kept in mind, the insurance company will cancel your car insurance claim and you will have to pay the entire cost of repairing the car from your pocket.

In other cases if you are not careful, you may have to suffer the disadvantage of car insurance.

  • Driving without the driving licence is a punishable work.  If you drive without a licence, you will have to pay a hefty fine, but if an accident occurs while driving, you will not get any money from the insurance company to fix your car.  Also, if your car meets with an accident while teaching someone else to drive, you will not get any benefit from the insurance company.  So don't touch the steering wheel of the car even without a licence.

  •  In many cases, after buying a second hand car, even if you change the car registration in your name, do not change the name in the car insurance.  In that case, if your car is involved in an accident, the insurance company may refuse to pay you for the repair of the car. So if you are buying a second hand car, make sure to get car insurance in your name along with vehicle registration. Then, you can make an insurance claim against the company. 

  • If you use a separate CNG or LPG kit in your vehicle, you need to mention it in the vehicle registration certificate.  Also, the insurance company should also be informed about the matter and it should be written in the insurance copy. Only then you can make an insurance claim in case of any damage to your vehicle.

Hope you have learned from our discussion What is car insurance.  It is important to know what type of compensation the insurance company will provide in case of property damage.There are also many other forms of non-accidental damages.  For example, it is wise to know in advance whether there will be any compensation in case of damage caused by natural calamities, car damage due to riots, fire etc.


প্রযুক্তির খবর, শিক্ষা ও ইন্সুরেন্স, ভিসার খবর, স্বাস্থ্য টিপস ও অনলাইনে আয় সম্পর্কিত তথ্যের বিরাট একটি প্ল্যাটফর্ম।

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