MotorMotor Insurance primarily provides financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise. It also offers financial protection against theft of the vehicle or damages due to accidents. Broadly, there are two types of motor insurance –
Third Party Insurance: It only pays compensation for death or any bodily injuries and for damage to property of third parties. While the insured is treated as the first party and the insurance company as the second party, all others would be third parties.
Comprehensive Insurance policy: Besides offering the benefits of third party Insurance, Comprehensive plan also includes damage to the vehicle by accidental external means: fire, lightning, explosion, self-ignition, burglary, house-breaking, riot and strike, malicious acts and terrorist acts, earthquake, flood, inundation, cyclone, landslide/rockslide etc.