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 –

  1. Insured Declared Value
  2. Policy Term
  3. Type of the four-wheeler/ car
  4. Vehicle’s age
  5. No claim Discounts
  6. Loadings

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-

  1. 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.
  2. 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 ( %)
1 year 20
2 years 25
3 years 35
4 years 45
5 years 50

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-

  1. Age of the four-wheeler
  2. Insured Declared Value
  3. Policy Period
  4. Car type/make/model
  5. No-claim-discount

Q11. What are the Inclusions of a car insurance policy?

Following coverage is provided in a vehicle insurance policy-

  1. 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.
  2. 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.
  3. 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.
  4. 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-

  1. Engine Protection Cover – It recompenses for damages caused to the engine of a car due to flooding or leakage of lubricants.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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-

  1. Visit the insurer’s website
  2. Click on the motor insurance tab
  3. Enter your mobile number and the email address
  4. Click on the submit option
  5. You will get your car insurance quotation
  6. Select the buy now option
  7. 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
  8. 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-

  1. Go to the nearest branch office of the insurance company
  2. Now fill the proposal form and submit it
  3. Also, submit all the essential documents
  4. You can pay the premium through a cheque or with a demand draft
  5. 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 5
>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

Premium

Lower

Higher

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.

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 business 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.

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

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