Car insurance, also known as motor insurance, auto insurance, or vehicle insurance, is the contract between an insurer and an insurance buyer. The insurance company agrees to pay the insured for the losses specified in the policy document, on payment of an annual premium.
Car insurance is one of the best ways to safeguard the car and the owner during financial contingencies. These financial contingencies include traffic collision, any legal liabilities (arising from physical damage, property damage, injury or death of a third party), damage caused to the insured car, bodily injury caused to pillion or driver, and third-party damage.
Motor insurance or car insurance also covers the loss or damage caused due to natural calamities. The car insurance’s premium amount is decided based on the Insured Declared Value (IDV) of the car. Higher the IDV, the higher will be the premium and vice versa.
- Benefits & Features
- Types of Car Insurance
- Add-on Covers
- How to Claim
- Car Insurance Renewal
- How to Calculate
- How to Compare
- Things to Know
- Frequently Asked Questions
Benefits of Car Insurance:
Car insurance helps to offset the loss or damage caused to the insured car. The insured does not need to run from pillar to post when an emergency strikes. It offers legal, financial and emotional support in the following manner-
1. Pays for Hospitalization:
Not everyone who meets with an accident is fortunate enough to get away with minimal injuries or no injuries at all. Sometimes it may result in fractures and serious injuries, which need immediate hospitalization. Nowadays, a single hospitalization is enough to wipe off one’s lifetime savings, but with vehicle insurance, one can mitigate such expenses in a hassle-free manner.
2. Pays for Damages:
Cars are not only expensive but their maintenance and repair is also an expensive affair. An accident can take place due to the negligence of a third-party. One might have to pay a considerable amount of money in case of collision, crash, or while swerving to avoid a jaywalker. However, with a car policy, one can remain stress-free during such emergencies.
3. Compensates the Family if the Insured Dies:
Unfortunately, a lot of people lose their lives in India due to road accidents. In case the breadwinner of a family dies during an accident; it gets very difficult for the dependents to survive. However, vehicle insurance can help the family by getting third-party compensation from the other party that was involved in the accident.
So, without car insurance one has to go through – Financial Loss + Stress + Inconvenience + Emotional Turmoil. Car insurance also covers loss or damage caused to the insured car due to an explosion, accident, self-ignition, fire, theft, riots, the act of terrorism, or lightning etc.
4. No Claim Bonus
No Claim Discount is accrued in the name of the insured for the number of claim-free years. People with good driving skills can make most of this benefit. The insured earns this discount if no claim was made in terms of the own damage. No claim bonus is payable at the time policy renewal.
Features of Car Insurance
Reimbursement of loss or damage caused to the vehicle
Cashless repair at network garages
Personal, motor and third-party cover
Option to choose from add-on risk covers
No-claim-discount for claim free years
One can opt for emergency roadside assistance and accommodation
Coverage is available to both the driver and the passengers
Types of Car Insurance
There are two types of car insurance policies in India. These policies are generally valid for a year, following which you have to get them renewed.
- Third-party Liability Insurance
- Comprehensive Car Insurance
Third Party Car Insurance:
Third Party Car Insurance protects the insured against any third party legal and financial liabilities arising due to an accident with the insured vehicle.
Third Party Insurance offers limited coverage. It includes bodily injuries, property damage and death of a third party.
Inclusions of Third Party Liability Insurance:
- Liabilities towards damage to the third-party vehicle involved in the accident.
- Liabilities towards bodily injuries to the third-party individual involved in the accident.
- Death of the third party
|Nature of the Injury||Compensation Amount|
|Loss of sight of an eye or loss of a limb||50 percent|
|Permanent total disability from injuries ( apart from injuries mentioned in this table)||100 percent|
|Loss of sight of both the eyes or loss of two limbs||100 percent|
Exclusions of the Third Party Vehicle Insurance:
Third party vehicle insurance does not cover the following –
- Damage Caused to the Insured Car– Third party car insurance doesn’t cover the loss, damage, and theft of the policy holder’s vehicle.
- Injury to self– During an accidental collision, the policyholder doesn’t get any compensation for own damage. Only the damage caused to a third-party is covered.
Comprehensive Car Insurance:
Comprehensive car insurance, as the name suggests, is an extensive car insurance policy with extra benefits. Apart from third party insurance cover, it also compensates for the loss or damage caused to the insured vehicle. It also covers theft of the insured vehicle.
It is recommended to buy a comprehensive car insurance policy as it covers both own damage and third-party damage.
Coverage/Inclusions of Comprehensive Car Insurance Policy:
- Loss or damage due to natural disasters such as lightning, earthquake, flood, typhoon, hurricane, storm, landslide, cyclone etc.
- Loss or damage caused by man-made disasters such as burglary, theft, riots, strike or terrorist activities.
- Damages to the vehicle while in the transit by road, water or train.
- Personal accident cover including the accidental demise of the driver and permanent disabilities resulting due to an accident. Some car insurance providers also provide optional insurance coverage for the co-passengers.
As the comprehensive car insurance provides a wide coverage, it is the first pick despite the higher premiums. Car insurance prices for comprehensive car insurance are usually higher as compared to a third party insurance policy. It is suggested for every car owner to stay protected with a comprehensive car insurance policy.
Comprehensive Car Insurance Also Covers-
- Liabilities towards the damages caused to the third-party car involved in the accident.
- Liabilities towards the injuries caused to the third-party involved in the accident.
Exclusions of Comprehensive Car Insurance Policy:
- This type of vehicle insurance does not offer any coverage if the accident occurs while driving under the influence of alcohol.
- A car being driven by an individual not holding a bona fide driving license
- Mechanical breakdown or wear and tear of the vehicle
- Loss or damage of car tyres unless the car is also damaged.
Car Insurance Add-on Covers
Customize your auto insurance policy with additional coverage
Car insurance benefits can be enhanced further with add-on covers that the insured can buy at the time of policy purchase and renewal. These additional covers can be availed with the existing policy by paying an extra amount of premium. One can easily compare car insurance quotes online based on the add-on covers and choose the most adequate one.
Here are some of the most common add-on benefits that are provided by most of the motor insurance companies in India –
1. Zero Depreciation Cover
The insured gets the total cost of the damage or loss that is caused to the insured car. The depreciation value of the replaced or damaged parts is usually deducted at the time of claim, but with ‘zero-dep’ policy one can claim the full amount.
Usually, it is applicable to vehicles that are less than 5 years of age. It can be availed twice during a policy term.
2. Key Replacement Cover
In case the car keys are locked inside the car or are stolen then the cost of changing the keys will be borne by the insurer.
3. Emergency Roadside Assistance
Immediate help is provided by the insurer, in case there is a breakdown of the insured car in the middle of the road. Services include- towing assistance, change of flat tyre, refuelling, and jump-starting the battery among others. Some insurers also provide emergency accommodation when an emergency strikes.
4. No-Claim-Bonus Protection
The policyholder is entitled to a No Claim Bonus (NCB) on car insurance premium for all the years that he/she has not made any claim. Up to 50% of No Claim Discount can be earned during a policy term.
If a claim is made, then this NCB is not accrued to the insured’s account. But with NCB protection cover, it is secured with insurer even after making a claim.
5. Car Hire Service
In case there is a loss or damage caused to the insured car, and it is sent for repair, the insurer will provide a car on hire for emergency purposes. There is a specified limit to this clause, which may vary from insurer to insurer.
6. Personal Belongings Cover
The loss or damage caused to the insured’s personal belongings during the accident is reimbursed by the insurer if one opts for this benefit.
7. Consumables Cover
Some insurers also provide coverage for repair and replacement of car nuts and bolts, screw, oil etc. For high-end car owners, this one proves to be really helpful.
8. Engine Secure
It also covers the non-accidental damages to a car’s engine. For high-end cars, it is useful during the time of water logging, or at places where the rainfall is more than usual, this add-on becomes quite essential.
9. Return to Invoice
With this add-on cover, the claim amount is not calculated on the basis of the IDV. It is decided on the basis of the price of the insured vehicle at the time of purchase.
10. Daily Allowance Benefit
Some car insurance companies provide this add-on benefit. By opting for this add-on benefit, the insured can get daily transport expenses till the insured car is repaired.
How to Make a Car Insurance Claim?
Car Insurance Claim Procedure
To file a vehicle insurance claim the process goes as follows-
- The insurance company should be informed immediately after the incident to raise a third-party liability claim.
- Duly filled claim form needs to be submitted along with a copy of Policy FIR, driving license, vehicle and registration certificate
- Court summons also need to be submitted to the motor insurance company
Theft Claims –
- File an F.I.R. at the police station
- Provide the copy of FIR to the motor insurance company
- Submit car registration copy and keys to the insurer
- A letter of Subrogation is also required
- Compensation will be provided once the claim is approved
Accidental/Own Damage Claims –
- Report the incident to the nearest police station
- Also, inform the insurer as they may ask to submit the claim form over email or in personal
- Submit the car’s registration certificate and the driving license
- The inspection will be conducted on the spot or a surveyor will be assigned to ascertain the loss or damage. This depends on the nature of the damage.
- Based on the inspection, the report will be submitted to the vehicle insurance company
- The bills will be signed by the policyholder
- The claim will be processed and settled based on the above-mentioned steps within a stipulated time.
Cashless Claim Procedure-
- In case of loss or damage to the insured vehicle during an accident or collision, the insurer should be informed at the helpline number.
- The insurer will survey the damaged vehicle
- The assessment report will be compiled
- The claim amount will be approved and the car will be sent to the network garage for claim settlement
Reimbursement Claim Procedure-
- Intimate the insurance company at their helpline number
- The car will be surveyed
- An assessment report will be compiled
- Some documents need to be submitted such as Police FIR copy in case of theft, accident and third-party damage. Copy of RC, driving license along with a duly filled claim form
- On approval, the claim amount will be reimbursed
Car Insurance Renewal
In order to be protected fully and enjoy motor insurance benefits throughout, car insurance renewal is essential. Motor insurance is offered for certain tenure, after which it needs to be renewed. Usually, motor insurance policies come with one-year tenure, however, the insurers have also introduced multi-year policies in the recent past. Well, in both the cases, renewal of policy is required. You can ensure hassle free motor insurance renewal in two ways, online car insurance renewal and offline car insurance policy renewal.
Best Car Insurance Companies in India with Incurred Claim Ratio:
|Insurance Provider||Incurred Claim Ratio||Network Garages||Solvency Ratio||Status of Grievances|
|The Oriental Insurance Company||112.11%||3100+||1.11||95.36|
|Shriram General Insurance||102.57%||2000+||1.94||100|
|SBI General Insurance||75.01%||2500+||2.19||95.33|
|Reliance General Insurance||92.23%||3800+||1.68||99.32|
|Universal Sompo General Insurance||70.91%||3500+||1.57||100|
|HDFC ERGO General Insurance||76.90%||5300+||–||100|
|Bharti AXA General Insurance||76.88%||3500+||1.65||99.81|
|The New India Insurance||91.26%||Available||2.19||99.19|
|IFFCO Tokio General Insurance||81.96%||2000+||1.6||99.94|
|Royal Sundaram Alliance General||82.15%||3300+||1.69||99.28|
|Future Generali India Insurance||81.77%||1000+||1.72||99.86|
|Cholamandalam MS General||79.82%||4500+||1.64||99.82|
|TATA AIG General Insurance||79.31%||3000+||1.15||98.51|
|United India Insurance||78.89%||1.15||98.51|
|Magma HDI General Insurance||78.49%||615+||2.07||84.96|
|Liberty General Insurance||77.29%||4000+||2.87||99.06|
|Bajaj Allianz General Insurance||69.91%||2.61||99.28|
* This is a directory and not a chronologically-ordered editorial endorsement. Research all the alternatives before buying.
*Incurred Claim Ratio:
The total of all the claims settled by the car insurance provider divided by the total of insurance premiums collected by the insurance company in the same period.
This ratio is an indicator of the insurance provider’s ability to settle the claims.
Incurred Claim Ratio = Total claims settled/Total accrued insurance premiums
Solvency ratio is the indicator of the insurance provider’s ability to settle the long-term debts.
*Status of Grievances:
The overall percentage of consumer grievances resolved out of the overall registered grievances during the year.
This era is called internet era, where everything starting from booking a lunch to cab; from seeing a doctor to pay the bills, everything can be done online. Then why not online car insurance renewal? Online motor insurance renewal is the most convenient way to renew your vehicle insurance. Moreover, you can avail best car insurance quotes online without rushing to insurers offices.
Steps of Online Car Insurance Renewal
A hassle-free online car insurance can be ensured in just a few steps:
- Visit the official website of the insurance company
- Go to the online car insurance renewal option
- Select the type of policy from the given options
- Mention the necessary information such as policy number, name, car model etc.
- Calculate the premium. You can compare car insurance online as well to check what are in offer
- If you are satisfied with the current insurance services, pay the premium online using debit/credit card
- This way ensure a smooth online car insurance renewal.
Some Renewal Tips to Ensure Best Car Insurance in India
With the internet, it has become relatively easier to renew car insurance in the blink of an eye. However, you should be cautious about certain things while renewing:
- Track your renewal date: Usually, insurance companies send reminders once the renewal date is about to arrive. They send notification via SMS or emails, letting you know that the existing motor insurance policy is due for renewal. However, the possibility is that you might miss an SMS or email. So, it is strictly advised to track the renewal date, possibly set a reminder on your cell-phone to ensure that it’ll remind you of the due date.
- Policy details: Gone are the days when you had to visit the insurer’s office to renew the policy. Instead, visit the official website on the insurance company, select the ‘Policy Renewal’ option, choose whether you’re a ‘New Customer’ or ‘Existing Customer’ and enter the required policy details to renew your car insurance policy.
- Follow directions: While filling the policy details at the time of renewal, there are some pointers that need to be filled as per the instruction. After submitting the information, the software will take a few seconds to validate the information, after that you can proceed with the next step, which is making the premium payment.
- Premium payment: Paying car insurance premium is very simple. Almost all insurance providers introducing their services online, renewing car insurance online can be ensured in a few clicks. All you need to do is to keep your debit/credit card ready, calculate the premiums online, compare the premiums and pay. The amount will instantly be debited from your account and you will receive a message about the transaction on the registered mobile number
- Get the Acknowledgment: Once you’ve made the online payment of your car insurance policy, the insurance service provider will verify the details and will send you an acknowledgement letter stating that the premium amount has been received from your end.
Renewing your car insurance policy is essential with fail. Driving without a valid insurance can have legal implications. By doing so you are putting your prized possession at further risk. This is not enough, your insurance policy will not cover you if anything goes wrong and the entire repairs expenses or medical expenses will be on you. Considering how easy is your car insurance renewal process, all you need to do just remember the renewal due date and pay the premiums.
However, if you are not happy with the current auto insurance provider, there is always an option to go for another insurer at the time of renewal. You might have found some other insurers who offer the same coverage at a competitive rate. Therefore, make sure you compare the various types of plans at the time of renewal and decide accordingly.
Factors to Consider when Renewing your Motor Insurance Policy:
At the time of renewing car insurance, you have to consider certain factors, which include:
Loyalty Bonus: You are entitled to loyalty bonus if you stick to the same insurers for years. The insurance company offers discounts at the time of purchasing if you have bought other policies form the same insurer. This will help you get a plan with a lower premium.
Coverage for Co-passengers: While buying car insurance you’ll have to add co-passengers. If you wish to add more passengers that can be possible at the time of renewal.
No-Claim Bonus: if you are eligible for No Claim Bonus, you can claim it at while renewing your policy. This way by getting the NCB you can lower your insurance premium for subsequent years.
Claim settlement Ratio: If you ever face with the claim procedure of the insurer, you will have better idea about whether the company is good at paying the claims. Even you have an idea about their post-sale services. Considering everything, you can make a decision about whether you should stick to the same one or look for another one.
Are You Getting the Adequate Coverage: While renewing the policy you should carefully analyse whether you are getting the right coverage. As requirements tend to change with time and the coverage that you have set initially may not suffice you at the present time. SO, at any point, if you feel that the current cover insufficient, feel free to set for an enhanced sum insured or change the plan.
Offers and discounts: In order to make the most of your car insurance, just ensure the premiums must not come at a higher price. There are insurers that offer various discounts and seasonal offers to whom you can opt for if find the current policy expensive. Moreover, by adding certain types of add-on cover, you can get benefitted with additional coverage. Well, this has to be done at the time of renewal only, not in-between of the policy tenure.
Anti-theft measures: Ensure installing anti-theft devices into the car before the renewal date of your car insurance. Because by informing about any such fittings you can earn a discount on premiums, which helps you remain stick to the same insurer.
How is Car Insurance Premium Calculated?
Factors that are taken into consideration while calculating Car insurance premium–
- Place of Registration– The cost of the premium is higher in all the major cities like Delhi, Bangalore, Mumbai, Chennai, Ahmedabad, Kolkata and Pune as compared to other cities.
- Sum Insured or Insured’s Declared Value (IDV) – It is the current market value of the insured car from which the depreciation is deducted while calculating the premium.
- Engine Type: The premium of vehicles with higher cubic capacity is comparatively higher than those with an engine with lower cubic capacity.
- Installation of accessories– Premium for car accessories and additional features is calculated separately.
- Coverage Type-The rate of premiums also depend on the type of coverage you opt. Comprehensive car insurance is likely to have higher premiums than the third-party car insurance.
- Personal Factors-Personal factors also play a vital role in determining the premium rates. Women are likely to pay lesser premium amount than men.
- Vehicle Age is also taken into consideration.
- Fuel type– Whether it is a diesel, petrol, CNG, electric car, it is an important factor in deciding the premium.
- Add-on covers like the personal belongings cover, zero depreciation cover, roadside assistance etc. also decide the premium.
How to Save on Car Insurance Premium?
- By comparing different car insurance policy quotes based on the premium amount, one can choose a policy with minimum car insurance premium
- Installation of anti-theft devices helps reduce car insurance premium
- Do not claim for small damages to earn a No-claim-bonus
- Opt for higher voluntary deductibles as it lowers the premium. If one is capable of paying a portion damage themselves at the time of claim, then only opt for voluntary deductibles
- Car modifications also affect the insurance premium
- Missing the policy renewal date may attract a higher cost of insurance premium as well as vehicle inspection
- Buying vehicle insurance online can get some discounts
- Members of Automobile Association of India can also avail discount on auto insurance premiums.
How to Compare Car Insurance Online?
To enjoy the policy benefits continuously, one must compare car insurance online. However, at the time of motor insurance renewal, one must consider the following pointers-
- Type of Plan:
As discussed above, there are two types of car insurance; it depends on the insured whether he/she needs third-party liability insurance or comprehensive car insurance policy.
- Cashless Facility at Affiliated Garages:
One must check the list of the network garages the insurance provider has a tie-up with. If yes, the insured can avail cashless claim settlement facility. At network garages, the insurance company directly settles the claim amount. At the time of car insurance renewal also, one must check for the network garages.
- Add-on Features:
There are a few additional benefits or riders, which are available with comprehensive car insurance policies. One must compare car insurance quotes based on these add-on covers and choose the most adequate one. The policy seekers should go for the insurer that offers maximum add-on benefits. One should compare car insurance online to know the different add-on covers offered by the insurers.
Voluntary deductibles are a certain percentage of the claim amount that the insured chooses to pay from his/her own pocket at the time of claim. Whereas, compulsory deductibles are decided by the insurer at the time of policy purchase and renewal. Higher the deductibles, lower will be the premium. However, one must choose a deductible that is affordable. You can compare car insurance online keeping the offered deductibles in mind.
- Insured Declared Value (IDV):
The Insured Declared Value (IDV) is the basic amount that the insurer fixes for the current market value (of that year) of the car, which is provided in the event of total loss of car or if the car is stolen. This is one of the factors to keep in mind while compare car insurance online.
Benefits of Comparing Car Insurance Policies Online
- One can easily compare car insurance policies from top car insurance companies. It is easier to go through the policy benefits, features and limitations.
- One can check out numerous options and choose the one that offers maximum discount and at a lower premium amount
- Broker’s cost is eliminated
- There is transparency in terms of the purchase and renewal process. Customer reviews can also help in making the purchase decision
- One can make an informed decision and choose the best car insurance plan by comparing all the available options
Why do You Need Best Car Insurance?
Uncertainties come without a prior notice. Placing god’s idol or other superstitious belief may prevent uncertainties sometimes but a car insurance policy will help you out of any such unfortunate event on the roads.
Moreover, the Motor Vehicles Act, 1998 makes it mandatory for every car owner to have car insurance in India. Any vehicle plying on the Indian roads must have a valid car insurance policy, with at least third-party liability cover.
Third party car insurance covers the damage caused to a third person, property or car. Whereas, a comprehensive car insurance covers the own damaged caused to an insured vehicle. Commercial vehicles, on the other hand, need to buy commercial vehicle insurance.
Eligibility Criteria for Car Insurance
The insurer must have a valid driving license
- Car’s registration copy is mandatory
- Minimum age criteria are 18 years
Buy Car Insurance Online
Buying car insurance online is the most convenient yet safest way of buying insurance. Car insurance online helps you save time and money. The process of buying is very easy. You need to visit the websites of your preferred insurers, check for the available car insurance online, buy online by paying the premiums and avail an instant policy.
Steps of Buying Car Insurance Online
In order to ensure a smooth buying of car insurance online, follow the below steps
- Visit the official website of the insurer
- Navigate thorough car insurance online option
- Submit the insured cars’ make and model in the online claim form
- Get the car insurance quotes and premium estimate based on the details provided
- Enter personal details like the insured’s name, contact number, geographical location, address etc.
- Check the plan benefits, features and coverage offered
- If it suits your requirements, calculate the premiums online
- Pay the premiums online by using Net Baking, Credit/Debit card etc.
- Policy can be downloaded as well and can be emailed on the registered id
This way buy car insurance online and stay covered during a contingency. By choosing for Car Insurance Online India, you can earn discount on insurance premiums. As there is o brokerage charge to be paid by the insurer, the amount saved is paid in a form of discount or bonus to the insured.
Documents Required While Buying Car Insurance:
Buying a car insurance policy requires minimal documentation. Following documents are required-
- ID Proof: A driving license is a legal document, therefore, qualifies to buy a car insurance policy. It also allows insurance providers to assess the driving record before they offer the insurance policy. The insurance premiums can be trimmed down by holding a good driving record. One can present PAN card also as an ID proof.
- Address Proof: Adhaar Card, electricity bill, Voter Id, rent agreement etc.
- Details of the Vehicle: The insurance provider will require the details of the insured vehicle to decide the premium.
- Bank Information: Insurance providers might run a credit check before they issue the policy. For this, the details of the bank accounts are important.
- Other Information: The insurer will also ask for personal information such as date of birth, address, name, contact number etc
Zero Depreciation Car Insurance Vs Comprehensive Coverage
Table with the basic difference between motor insurance policy with zero depreciation car insurance policy and a basic comprehensive car insurance policy –
|Features||Zero Depreciation||Comprehensive Insurance|
|Claim Amount||Covers total loss or damage without deducting the depreciation||Depreciation of the car parts is deducted from the IDV|
|Age of the car||Up to 5 years||Up to 15 years|
|Own Expense||Less burden on the policyholder at the time of claim||The policyholder has to bear some of the expenses|
|Cost of Plastic Parts and Repair||Maximum coverage||Comparatively less|
What is IDV or Sum Insured of Car Insurance?
Insured Declared Value (IDV) is the current market value of the car. It is the maximum Sum Insured that insurance provider decides after deducting the depreciation cost of the car. The IDV is offered in case of total loss of the car or theft.
Insured Declared Value = (Listing price of the manufacturers – Depreciation) + (Accessories excluded from the listed price – Depreciation)
The schedule of depreciation is mentioned in the following table:
|Vehicle Age||Depreciation to adjust IDV (%)|
|Less than 6 months||5|
|Between 6 and 1 year||15|
|Between 1 year and 2 years||20|
|Between 2 and 3 years||30|
|Between 3 and 4 years||40|
|Between 4 and 5 years||50|
What is Cashless Motor Insurance?
If one buys a cashless car insurance policy, then the insured vehicle has to be repaired at the network garage. The insurance companies have tie-ups with these garages. The damage repair cost is paid by the insurer directly and the policyholder is not required to pay anything. Cashless car insurance offers a quick, convenient and hassle-free service to the insured.
How to Transfer Old Car Insurance Policy to Your New Car?
The policyholder can send an application to the motor insurance provider for substitution of the current car with a new car of the same or different class. The policy shall be continued for the remaining policy period. The difference in the premium amount should be paid to the insurer.
Mistakes to Avoid When Buying Car Insurance
These things should be taken care off in order to purchase the best car insurance in India:
- Not comparing car insurance quotations from top insurance companies on the basis of policy features, benefits, premium, claim settlement and limitations
- Choosing a vehicle insurance policy with minimum premium might not always be a good idea
- Opting for higher deductibles just to lower the premium amount. Add-on covers are optional and should be chosenonly if one can pay a higher premium against enhanced protection
- Opting only for third-party liability insurance. It is made mandatory by law, but a comprehensive insurance plan covers own damages as well.
Factors affecting Motor Insurance Prices:
Car insurance premiums are not just arbitrary numbers made up by the car insurance providers. These are thought-out calculations. One must be aware of the vital factors affecting car insurance prices.
The determinants that contribute to reducing the car insurance premiums are as follows:
- Geographical Location: The geographical location has a great impact on the premium rates. Low traffic areas are likely to have lesser premiums and vice-versa.
- Engine Type: The car insurance prices of vehicles with higher cubic capacity is comparatively higher than those with an engine with lower cubic capacity.
- Personal Factors: Personal factors also play a vital role in determining the premium rates or car insurance prices. Women are likely to pay lesser premium amount than men pay.
- Coverage Type: The rate of premiums also depend on the type of coverage you opt. Comprehensive car insurance is likely to have higher premiums than the third-party car insurance.
- Customized Plan: A customized plan fulfilling all the key requirements might have come with a higher car insurance prices or premium.
Car Insurance Frequently Asked Questions (FAQ)
It is essential to buy a car insurance policy for all the cars that are plying on the Indian roads. In case of a car accident or road mishap, you can be sure of assistance from the insurance company. While purchasing a car insurance policy, there must be some questions striking your mind. To ensure that you buy an adequate car insurance policy, read the car insurance FAQs including the claim process, sum insured, benefits, plan coverage, eligibility criteria, claim, etc.
Q1. What factors are taken into consideration while calculating car insurance premium?
Usually, the following factors are taken into consideration while calculating car insurance premium –
- Insured Declared Value
- Policy Term
- Type of the four-wheeler/ car
- Vehicle’s age
- No claim Discounts
Q2. Is it possible to renew car insurance online?
Yes, most of the insurers offer the option to renew four-wheeler insurance online. There is a certain specific period during which the renewal has to be done. It differs from one insurer to another.
Q3. Which are the advantages of Road Side Assistance cover?
Emergency roadside assistance proves to be useful when a car gets stuck in the middle of the road. It is an add-on cover that you get by paying an additional amount of premium. Following services are included in their roadside assistance cover:
- Assistance for minor repairs
- Battery jump start
- Towing assistance
- Emergency breakdown assistance
- Key replacement services
- Flat Tyre assistance
- Message relay services
- Supply of emergency fuel
- Emergency vehicle assistance
- Emergency accommodation services
Q4. What is reimbursement claim in a car insurance policy?
When the claim is made and the repair work is carried out in a non-registered garage then you have to file for reimbursement of the permissible expenses. Initially, you will have to pay the bills, and then you can submit the bills and receipts to claim the amount.
Q5. What is Cashless Claim in a car insurance policy?
When the repair work is carried out at a network garage i.e. the workshop that is registered with the insurer, then only you can avail the cashless repair services. In this case, your insurance company will directly pay the service amount. You are only required to pay the cost of deductible and depreciation as applicable.
Q6. What are the advantages of getting zero depreciation cover in a car insurance policy?
The benefits of opting for a zero depreciation cover are as follows-
- You get 100 percent compensation on the depreciated parts
- It is useful for cars that are more than three years old
- You can use it for 2 permissible claims during your policy period
- It also compensates the cost of repairing on the durable parts like batteries, airbags etc.
Q7. How to lodge a car Insurance claim after a mishap or accident on the roads?
- Seek immediate medical help if there were any bodily injuries after the accident
- Note the details of the other vehicles that were involved in any other vehicle was involved in the accident
- Try to note down the name and contact details of the witnesses involved
- Call at the insurer’s helpline number to lodge a claim and one of their representatives will take you through the entire claim process.
- An FIR report is also required in case of property damage, theft, and bodily injuries
Q8. How many types of car insurance policies are there?
You can purchase two types of car insurance policies in India-
- Third-party Car Insurance – As per the Motor Vehicles Act, it is essential to buy third party liability insurance cover. It is required to ensure the safety of a third person in case of an accidental death or injury resulting from the insured vehicle. Third party property damages are also covered in liability insurance.
- Comprehensive Car Insurance – It comprises of third party insurance cover as well any damage to your own car. It also includes natural and man-made disasters along with accidental damages. It also offers a myriad of add-on covers, which you can avail to enhance your coverage.
Q9. What is No Claim Bonus in a car insurance policy?
No-claim-discount or No claim bonus is a discount that you get on your premium at the time of policy renewal. For every claim free year, you earn NCB up to a specific limit. Have a look at the table below for further details-
|Consecutive Claim-free years||Own damage premium discount ( %)|
Q10. What is the use of a car insurance premium calculator?
Car insurance premium calculator helps you to get car insurance quotes online in a matter of few seconds just by providing the following information in the online calculator-
- Age of the four-wheeler
- Insured Declared Value
- Policy Period
- Car type/make/model
Q11. What are the Inclusions of a car insurance policy?
Following coverage is provided in a vehicle insurance policy-
- Third Party Liability Cover- It protects you from any third party legal liabilities or financial liabilities resulting from an accident by your vehicle. It covers death and injuries of a third person and damages caused to a third-party property.
- Man-made Disasters – Compensation is provided for loss or damage due to burglary, theft, riots, malicious acts, burglary, and an act of terrorism damaging your car. It also covers any perils during transportation.
- Damage Resulting Due to Natural Disasters- It includes damage caused due to natural disasters such as fire, flood, earthquake, storm, self-ignition, typhoon, explosion, lightning, hurricane, cyclone, landslide, inundation, tempest etc.
- Personal Accident Insurance Cover- It compensates the driver for accidental damages while travelling or mounting from the car. However, you can opt for personal accident protection cover for your co-passengers as well.
Q12. What expenses/damages are not covered in a car insurance policy?
Your claim will be denied under the following circumstances-
- Routine wear & tear
- Any kind of consequential loss is not covered
- Nil depreciation cover
- Mechanical breakdown
- Any type of deliberate attempt will invalidate your claim
- Driving after the consumption of alcohol and drugs
- Damage resulting due to nuclear radiations and war conditions
Q13. What type of add-on covers available in a car insurance policy?
There are various add-on covers that you can opt for to enhance your cover. These add-on covers prove to be handy when an emergency strikes-
- Engine Protection Cover – It recompenses for damages caused to the engine of a car due to flooding or leakage of lubricants.
- Roadside Assistance Cover – It includes breakdown assistance services by paying an additional amount of premium. The services provided include- towing assistance to the nearest garage, emergency fuel cover, battery jump start, emergency keys, emergency accommodation cover and repair services among others.
- Zero Depreciation Cover – You can opt for zero depreciation cover is your four-wheeler is not more than 3 years old. It will allow you to claim the full amount for the parts that were replaced in the previous claims.
- Personal Accident Protection Cover- The owner or driver is offered compensation in case of physical injuries (minor/major). You can also get it for the co-riders.
- Consumables Cover –With this add-on cover you will get reimbursement for loss or damage caused to the car consumables like the nut, bolts, screws, engine oil, fuel filter and the likewise.
- Return to Invoice Cover – In case your car is declared as a total loss post an accident, you will get 100% compensation of the car value.
Q14. What are the steps to buy car insurance online?
The process differs from one insurer to another. But usually, this is how you can buy your car insurance policy online-
- Visit the insurer’s website
- Click on the motor insurance tab
- Enter your mobile number and the email address
- Click on the submit option
- You will get your car insurance quotation
- Select the buy now option
- You will be directed to the payment page online and you can use your credit or debit card to pay online or use net banking
- The policy will be mailed to you on your registered mail id as well as a hard copy will be sent to you on your registered address.
Q15. What is the procedure to buy a car insurance policy offline?
To buy a car insurance policy offline you need to follow the procedure described below-
- Go to the nearest branch office of the insurance company
- Now fill the proposal form and submit it
- Also, submit all the essential documents
- You can pay the premium through a cheque or with a demand draft
- Once the inspection is done, you will receive your car insurance papers over email and in hard copy.
Q16. What is the procedure for online car insurance renewal?
Usually, the policy has to be renewed within 60 days of the expiry of the current car insurance policy. If it has already expired, then a surveyor examines your car before the renewal. Keep in mind, that the policy will be renewed only after inspection and submission of all the documents.
Q17. What are services can I avail while filing a claim for a car insurance policy?
In case of a breakdown or an accident, you can call on their toll-free helpline number and get full assistance to get back on the road. The services that you can avail are as follows-
- Free pick up and towing facility
- Cashless repair assistance at registered workshops
- Compensation of expenses incurred on car repair at a non-network garage
Q18. What is the procedure to file a car insurance claim procedure for an accident?
In case of an accident, you can follow the process described below-
- Take a note if there were any other vehicles that were involved in the mishap
- Note down the contact details and name of the onlookers, if any
- Call on the insurer’s helpline number to lodge a claim and you will get the claim reference number
- A list of documents will be provided along with the network workshops
- A policy FIR copy is required in case of accidental injuries and property damage
Q19. What documents are required to file a theft claim?
Submit the following documents while filing a claim for theft-related cases-
- Copy of Diving license
- Duly signed claim form
- Copy of RC
- Car insurance policy papers
- Car keys
- Original Estimate
- Police FIR report
- No-trace report from the police
- Vehicle transfer papers from the RTO
- Form 35 ( hypothecation cases)
- In the case of triplicate/duplicate Form 28, Form 29 and 30 is required ( respectively)
Q20. What documents are required to file an accidental claim?
Submit the following documents while filing an accidental claim-
- Claim form
- Registration copy ( RC)
- Police FIR report ( if required)
- Driving License ( copy)
- Initial two pages of the car insurance policy
- Original Estimate
- Original repair invoice/payment receipts (as per the situation )
Q21. What documents are required to file third-party car insurance claims?
Submit the following documents while filing third-party claims-
- Copy of Driving License
- Claim form (duly signed)
- Copy of car insurance papers (initial 2 pages Copy of Police FIR
- Copy of Registration certificate of the car
It varies from one insurer to another and there may be additional documents that you will need to submit.
Q22. What is meant by Insured Declared Value?
Insured declared value is the full form of IDV, which is the current market value of a four-wheeler.
It is arrived at by adjusting the present listed price of the car as decided by the with depreciation as mentioned in the table below-
|Age of the four-wheeler||Depreciation (%)|
|>6 months and <1 year||15|
|> 1 year and <2 years||20|
|> 2 years and <3 years||30|
|>3 years and <4 years||40|
|> 4 years and <5 years||50|
In case of cars that are older than 5 years, the IDV value will be decided between the insurer and the insured.
Q23. Can I transfer my old car insurance policy for my new car?
You can send an application to the insurance company for substitution of the existing car with a new car of the different or same class. The policy shall be continued for the remaining policy period. The difference in the premium amount should be paid to the insurer.
Q24. What if I have to make changes/endorsement in the policy?
An endorsement document is a written evidence of any changes made to your current car insurance policy. Any changes/alterations that are incorporated in a car insurance policy can be done by way of an endorsement.
An endorsement can also be issued to record changes like change of name, change of address, change of vehicle etc. while renewing the policy.
Q25. What is the difference between Comprehensive car insurance Coverage and Zero Depreciation cover?
Table with the basic difference between car insurance policy with zero depreciation car insurance policy and a basic comprehensive car insurance policy –
|Features||Comprehensive Insurance||Zero Depreciation Cover|
|Age of the car||Up to 15 years||Up to 5 years|
|Claim Amount||Depreciation of the car parts is deducted from the IDV||Covers total loss or damage without deducting the depreciation|
|Cost of Plastic Parts and Repair||Comparatively less||Maximum coverage|
|Own Expense||The policyholder has to bear some of the expenses||Less burden on the policyholder at the time of claim|
Q26. Can I transfer my No-Claim-Bonus for my old car to a new car?
Yes, it is possible to transfer your NCB to a new car, but it has to be of the same class and type-
However, keep the following things in mind while transferring the NCB-S
While selling your old car, make sure that you transfer the ownership and keep a photocopy of the new entry in the RC book for future reference.
Get the NCB certificate and forward a copy of the delivery note to your car insurance company. Ask them to provide you a holding letter or an NCB certificate, which is usually valid for 3 years. And when you purchase a new car, remember to transfer the NCB to your new car insurance policy.
Q27. Can I get coverage for my electrical and non-electrical accessories that are fitted in my car?
Yes, you can get your electrical fittings such as fog lights, AC, music system, spoilers with brake light covered in your car insurance policy. You can also get other fittings such as seat cover, mag wheels, non-electrical spoiler accessories covered in the policy. The compensation will be up to a specified limit as mentioned in the policy. You can also get coverage for Bi-Fuel system and CNG kit by paying an additional amount of premium.
Q28. How can I reduce my car insurance premium?
In order to reduce your car insurance premium, it is important to maintain a claim-free record. No Claim Bonus is accumulated over the years and is reflected as a discount in the Own Damage Premium.
However, you can also reduce your car insurance premium by opting for a voluntary deductible; it implies that you will bear a certain percentage of loss from every claim.
Q29. What is a cover note in a car insurance policy?
It is a temporary certificate of car insurance that the insurance company issues after you have paid the premium and submitted the duly filled proposal form.
It is valid for a period of sixty days from the date of issuing the cover note and the insurance company will issue the insurance certificate before a cover note expires.
Q30. What will happen if my vehicle was being driven by someone else at the time of an accident?
Yes, the insurance will be applicable even if the vehicle was being driven by someone else with your permission.
Q31. For how long is my car insurance policy valid?
Your car insurance policy will be valid for 12 months from the date of inception (or as mentioned in your policy documents.
Q32. Do I get some discount on the car insurance premium for installing an anti-theft alarm and anti-lock system installed in my car?
Yes, you get an additional discount in case your vehicle is fitted with anti-theft devices, approved by the Automobile Research Association of India (ARAI).
Q33. What are the compulsory deductibles in a car insurance policy?
Coming to the compulsory deductibles in car insurance, this deduction is the amount prefixed by the insurer on the premium. In simple terms, the compulsory deduction is a specific amount, which needs to be paid necessarily in order to get the vehicle damage claim.
Q34. What are the voluntary deductibles in a car insurance policy?
In car insurance, voluntary deductibles or excess is the amount that you agree to pay at the time of claim towards any future repairs of your vehicle. At the time of claim settlement, this amount is adjusted with compulsory deductibles.
Q35. Can I lose my No Claim Bonus? If yes, then why?
Yes, your No-claim-bonus can be forfeited due to the following reasons-
If a claim is made during the policy term you will not be eligible to get No-Claim-Bonus in the corresponding year. It will also be forfeited in case there is a break of more than 90 days in the insurance period.
Q36. What are the advantages of buying a car insurance policy?
The numerous benefits of buying a car Insurance policy are listed below-
- Immediate assistance over phone and emails
- Cashless settlement of claims at network garages across India
- Usually, all the insurance companies have a grievance redressal team to address your concerns immediately
- Minimal documentation is required to get the policy
- A variety of discounts are provided on the premium
- Coverage can be enhanced with add-on benefits
- The claims are settled in a quick manner
Q37. What is a commercial vehicle insurance policy?
A commercial vehicle policy is valid for both public and private vehicles such as vehicles carrying goods, trailers, trucks, passenger carrying vehicles, tractors, excavators, shovels and similar vehicles.
Commercial vehicle insurance policy offers financial protection to your It is essential to buy a car insurancbusiness in case of an accident or collision of the vehicle. Furthermore, it ensures third-party liability cover arising as a result of an accident, and the death of a third-person, third party property damage and bodily injuries caused to a third-person from your vehicle.
Q38. What is Motor Insurance?
Motor insurance is bought for automobiles including bikes, trucks, cars and other commercial road vehicles. Vehicle insurance policy is a contract between the insured and insurance company, wherein the insurance provider agrees to compensate the insured in case of any loss or damage. In return, the policyholder agrees to pay the car insurance premium regularly.
Q39. What is a No Claim Bonus (NCB)?
No Claim Bonus or No-Claim-Discount is accrued to the insured’s account every year or not making a single claim during the policy term.
Q40. What is Cover Note?
A temporary proof of insurance issued to an insured before the issuance of the actual document of an insurance policy is referred to as Cover Note. It is valid for 60 days from the issuance date and the original document replaces it.
Q41. What is own damage cover in motor insurance?
Comprehensive car insurance includes own damage cover. The insurer compensates for the damages that occur to the insured car during an accident.
Q42. What is a personal accident cover?
In the case of disabilities and death resulting due to an accident, the insurance provider compensates for the financial loss.
Q43. How is the motor insurance premium calculated?
A lot of factors are taken into consideration while calculating car insurance premium-
- Age and type of the vehicle
- Insured Declared Value
- Geographical zone
- Engine’s Cubic Capacity
- Car make and model
- Add-on covers
- Car modifications
Q44. What is Insured Declared Value (IDV)?
IDV is equal to the sum assured value that the policyholder gets in case of theft or total loss of the insured vehicle. It is the current market value of the vehicle minus the vehicle registration cost and depreciation value of the vehicle parts.
Q45. What are the documents required to file car insurance in India?
The following documents are required at the time of filing vehicle insurance claim:
- Insurance copy
- Claim form
- Police FIR
- Driving License
- Registration Certificate
- ‘No trace report’ in the case of car thefts
Q46. What is ‘No Claim Bonus’?
NCB is earned by the insured for not making a claim during the policy period. The discount is applicable on the insurance premium at the time of policy renewal. For every claim free year, the No-claim-bonus is accumulated as mentioned in the table below –
|Claim Free Years||No-Claim-Bonus (%)|
|5 years||Up to 50%|
How to File A Claim for Car Insurance?
If you find yourself stuck in an accident, theft or road emergency, here’s what needs to be done next-
Inform the Insurer
It is important to communicate timely and effectively with your insurer if you want to settle your claim quickly. Try to notify your car insurer as early as possible with all the necessary details. The later you inform, more the chances of your claim being rejected.
Inform the Police
In case of an accident or collision, you should inform the cops about the damage. It is compulsory to provide a Police FIR report for accidental and theft-related claims. Refrain from having an argument with the other driver and let the police decide.
Evaluate the Damage
A surveyor will be allotted to assess the loss and damage caused to the insured vehicle and the third-party during the accident. A report will be created and sent to the insurer and the garage before the repair work. In case of theft, a police report is required declaring the vehicle as ‘total loss’.
On approval, the car will be sent for repair and if you have opted for cashless repair the vehicle will be fixed at the network garage. The insurer will pay off the garage. And if the vehicle is repaired at some other workshop, the amount will be reimbursed. And you can enjoy driving your car.
Top Car Insurance Companies in India 2018-19
|Insurance Provider||Benefits & Features||Available Add-on Covers||Cashless Repair at network garages|
|Tata AIG Car Insurance||
|Bajaj Allianz Car Insurance||
|Reliance General Car Insurance||
|SBI Car Insurance||
|Royal Sundaram Car Insurance||
|HDFC Ergo Car Insurance||
|Cholamandalam Car Insurance||
|Iffco Tokio Car Insurance||
|Oriental Car Insurance||
|Shriram Car Insurance||
*This is a directory and not a chronologically-ordered editorial endorsement. Research all the alternatives before buying.
Car Insurance Companies
Why Do You Need Car Insurance?
Third-party insurance is mandatory in our country. Whereas, the choice to buy a comprehensive car insurance policy with the car owner. Out of 18 crores vehicles, only 6 crore drivers have third party insurance policy. Victims of road accidents do not get compensation as vehicles do not have third party cover.
Third-party insurance covers damage caused to a third-party person, property or vehicle. Comprehensive car insurance covers third-party and own damages along with special benefits like roadside assistance, personal accident cover, zero depreciation cover etc. To enhance road safety it is essential to buy car insurance.
1.5 Lacs/YearDeaths due to Road Accidents
18 croreTotal Vehicles Plying on Roads
50%Total Vehicles without Insurance
70%Numbers of Insured Cars