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Buying a new car is indeed an exciting prospect. Whether it’s your first car or tenth car, the excitement levels never decrease. There are plenty of factors to consider – researching features, comparing brands and models, asking opinions to friends and family, reading online reviews and watching YouTube guides, choosing the jazziest colours, and picking the best features.

In spite of spending so much time on choosing the car – most car owners in India fail to focus on car insurance. It’s mostly an afterthought. But, a car insurance policy is the best way to protect your precious vehicle in case of emergencies.

Don’t let the word insurance scare you. Here, on this page, you can find all that you need to know about car insurance policies in India.

What is Car Insurance?

Also known as motor insurance, four-wheeler insurance, auto insurance, a car insurance policy offers financial coverage for your car. There’s no denying the fact that the number of car accidents in India is on the rise. Hence, it’s essential that you have financial backup to protect your vehicle from unwanted and unexpected expenses.

Furthermore, today’s it's extremely expensive for vehicle owners to own and maintain a car. High repair costs, huge depreciation in the value of the vehicle all put a dent in your savings and bank balance. This is where a car insurance policy offers immense relief to vehicle owners.

With a car insurance policy, your vehicle is protected at all times. Generally, motor insurance policies provide you financial compensation if your vehicle damages other vehicles or property or injures third-party persons during an accident.

In such cases, you don’t have to dip into your life’s savings to pay the compensation costs to third-party persons. Your insurance company takes care of all the expenses. Additionally, when you choose comprehensive car insurance policies, the insurance company also pays for any damages or losses incurred by the policyholder (and passengers of your vehicle) in case of accidents.

Why do you need Car Insurance?

Five main reasons why you need car insurance in India:

1. It’s Mandatory by Law

The Motor Vehicles Act of 1988 makes it compulsory for all vehicles that are used on Indian roads to be properly insured. This means, if you wish to drive a car in India, the law requires you to own a valid motor insurance policy. It’s mandatory for all vehicle owners to insure their vehicles for at least third-party liabilities. However, it’s highly recommended that you opt for a comprehensive car insurance policy.

A third-party liability offers you financial coverage for any losses or damages caused by your vehicle to third-party properties as well as other people.

2. Offers you Financial Protection

Indian roads are notorious for the high number of accidents. According to data supplied by PRS, the number of road accidents in India have been steadily increasing since the 1970s. The number shot up by 84% from 1980 to 1990. In 2015, around five lakh road accidents were registered in India, and around 1.5 lakh people lost their lives, and around 5 lakh people were injured in road accidents.

These numbers cannot be taken lightly and you need a good financial cover to protect you from the damages and losses due to road accidents. Even when your vehicle causes minor scratches on the other car, it could lead to a huge argument in the middle of the road, with the other driver demanding thousands of rupees as compensation. In case of major collisions, the compensation you have to pay to other drivers, passengers, bystanders could very well run into lakhs of rupees.

With a car insurance policy, you can breathe easy knowing that your insurance provider covers the costs of damages in case of accidents. A car insurance policy acts as a financial net offering you protection in case something unexpected was to happen while you are navigating the roads.

3. Supports your Health Insurance Cover

Most car insurance policies also provide financial coverage for injuries incurred by the driver (as well as passengers) during an accident. You can obtain this coverage by purchasing personal accident cover as an add-on cover along with your car insurance policy. You can use this coverage as an enhancement of your regular health insurance cover.

4. Adds to your Convenience

Let’s assume that your car breaks down in the middle of nowhere. With a comprehensive car insurance policy that offers roadside assistance, your insurance company will dispatch a mechanic team to the spot immediately. Additionally, depending on the add-on covers chosen, your insurance company will pay for the costs of accommodation for your family, cashless repair facilities at network garages and more.

All these features add to your convenience and reduce the burden and maintenance charges of owning a four-wheeler.

5. Provides Peace of Mind

You may be a careful and vigilant driver. But, that cannot be said for all other drivers you encounter on the road. No one knows what will happen at any time, especially when you are navigating chaotic Indian roads.

With a car insurance policy, you can rest assured. You can navigate peacefully without having to worry about the consequences of potential accidents. Whether you are at fault or the other driver is at fault, your car insurance policy offers financial coverage for all damages and repairs.

Simply put, a car insurance policy helps you put your worries in the backseat and enjoy the drive.

Types of Car Insurance Policies

Broadly speaking car insurance policies in India can be classified into two major types:

  • Third-party liability insurance
  • Comprehensive insurance

Third-party Liability Car Insurance

As the name implies, third-party liability car insurance protects you (the policyholder) from legal liabilities to third-party properties and people in case of an accident. Under the Motor Vehicles Insurance Act of 1988, it’s mandatory for all vehicle owners in India to hold minimum third-party liability insurance.

What does it cover?

If you cause an accident with your vehicle to third-party persons or property, your insurance provider will bear the compensation costs you owe to the third-party.

Benefits of third-party liability car insurance:

  • Low premium
  • Protects you from damage/injuries caused to third-parties and third-party property
  • Readily available
  • Complies with legal requirements under the Indian Motor Vehicles Act

Comprehensive Car Insurance

While third-party liability insurance is mandatory, it doesn’t cover the costs of damages incurred to the policyholder. The comprehensive car insurance policy not only covers the costs of damages and injuries to third-party persons and property but also covers the costs of damages to own vehicle, vehicle driver, and passengers.

Apart from this, comprehensive car insurance policies offers complete protection for your vehicle from natural and manmade calamities like lightning, fire, earthquakes, floods, cyclones, tsunami, falling tree branches, theft, vandalism, riots, etc.

What does it cover?

Basic comprehensive car insurance not only offers third-party liability coverage but also includes damages to your car due to theft, vandalism, and other man-made and natural disasters.

Benefits of Comprehensive Car Insurance:

  • Complete coverage
  • Coverage for natural and man-made disasters
  • Protects your vehicle even if it's lost/stolen
  • Includes third-party liabilities

Inclusions – What is included in comprehensive car insurance policy?

Generally, all comprehensive car insurance plans include the following coverage:

  • Third-party liability
  • Damages caused to the vehicle by accidents, man-made and natural calamities
  • Personal accident cover for the driver/owner of the vehicle
  • Loss or theft of the vehicle

Exclusions – What’s not covered under the comprehensive car insurance policy?

Generally, most comprehensive car insurance policies do not offer the following coverage:

  • Wear and tear of the vehicle due to ageing
  • Damages caused by drivers under the influence of alcohol, drugs and other intoxicants
  • Damages caused by drivers who don’t hold a valid license
  • Mechanical or electrical breakdown
  • Losses incurred by the vehicle while driving outside India
  • Consequential loss

Note – that some of these exclusions can be overridden when you opt for specific add-on covers.

Car Insurance

What are the ways to purchase a car insurance policy in India?

You can purchase a car insurance policy using any one of the following methods:

Automobile Dealers

An automobile dealer (the place where you buy your vehicle) is the first choice for most people when it comes to car insurance. Most dealers offer car insurance policies as part of the car purchasing process. Generally, most automobile dealers have tie-ups with specific insurance companies. In such cases, the dealer handles all the paperwork on your behalf – including filling the insurance application form, specifying the value of the insured vehicle, etc.

Once you pay the premium to the automobile dealer (usually included in your car purchase package), you are issued with the car insurance policy. These policies are generally valid for one year after which you have to pay the premium to the dealer for coverage for the subsequent year.

One major drawback with this method is that most car dealers have tie-ups only with one or two car insurance providers. In such cases, you will not be able to compare insurance providers, and the options available to you are limited. If you require just third-party coverage with no add-on features, this may be the right choice for you.

Insurance Agents and Brokers

Insurance agents work with specific insurance companies, and they get paid when they sell insurance policies to customers. Insurance brokers, on the other hand, are companies or individuals who hold a license from IRDAI (Insurance Regulatory and Development Authority of India) to sell insurance products to clients.

Insurance agents have knowledge only about the products of the company that they are associated with. If you want to switch between insurance providers, then you have to choose another insurance agent, who works with your preferred insurance provider. Insurance brokers, on the other hand, sell insurance products from different insurance providers, thereby offering you an extensive list of products.

Both insurance agents and brokers receive a commission for selling insurance products to customers. While choosing an agent/broker, make sure to consider their after-sales service, so that you can reach out to them, in case you need any assistance during the claims process.

Online

This is one of the top emerging choices for customers looking to purchase car insurance policies. Today, it’s possible for customers to purchase a car insurance policy directly online. All you have to do is compare and evaluate different car insurance policies, understand the features of each, and choose the best one that suits your needs.

You can then use the online purchase portal of the insurance provider and get your car insurance policy issued instantly.

Purchasing a car insurance policy online offers several benefits. You can compare the premium, features, and other charges of different insurance providers and choose the best company that meets your requirements. Additionally, you are in complete control of your purchase. You can choose what the covers that you want to add-on and pay only for the coverage that you require.

What are add-on covers in a car insurance policy?

As the name implies, add-on covers provide added coverage for your vehicle apart from the basic coverage offered by your insurance policy. There are several types of add-on covers, and you can choose none, one or many add-on covers as per your requirements.

Each add-on cover comes with an additional cost that is added to your premium. Hence, it’s essential that you understand the different types of add-on covers available so that you can choose the ones that you need the best. Note that not all insurance providers may offer all these add-on covers. So, if you require specific add-on covers, then make sure to choose an insurance provider who offers it.

All add-on covers are optional, and you can add it to both the basic comprehensive car insurance policy and third-party liability car insurance policy. While add-on covers cost extra, they are highly recommended since they offer extensive coverage and higher convenience.

Popular Add-On Covers for Car Insurance Policies

Nil Depreciation

During claim settlement, the insurance company deducts the depreciation on parts of your vehicle to figure the claim amount that you are eligible. A car is a depreciating property, and its value decreases year on year.

To explain it better, let’s illustrate this point with an example. Two car owners A and B choose the same car insurance policy. Owner A has a vehicle that is less than one year old, whereas owner B has a vehicle that is five years old. Both owners file a claim at the same time. Owner A is likely to receive a higher claim settlement value compared to owner B since the depreciation value of a new car is lower than that of an old car.

As you can see, as your vehicle gets older, you receive lesser claim amounts. By choosing nil depreciation add-on cover, the insurance provider doesn’t deduct depreciation values during claim settlements, and you can receive the full claim amount.

Total Cover

A basic comprehensive car insurance policy only pays compensation amount for the depreciated car value, in case your vehicle is damaged due to man-made or natural calamities, accidents, or theft. Other costs including registration cost, road tax, and insurance premium account for nearly 15 – 20% of the total on-road cost of the vehicle. These costs are not reimbursed if your vehicle is damaged, lost, or stolen.

With this add-on cover, you are eligible for reimbursement of the total cost of your vehicle.

Roadside Assistance Cover

As the name implies, when you choose this add-on cover, the insurer offers you assistance in case of emergencies. For instance, you are driving on a highway, and your car breaks down in a remote area. If you have chosen roadside assistance cover, you can call the insurance provider, who then dispatches an emergency mechanic team to fix the problems with your car immediately.

Personal Accident Cover

This add-on cover provides coverage to the owner of the vehicle or driver in case of accidents. If the policyholder meets with an accident while driving the vehicle, this add-on cover offers 100% of the claim amount, in case of irreversible damage to limbs, eyes or death of the policyholder.

No Claim Bonus Retention Cover

Very often, when a policyholder makes even a small claim, he/she loses all the NCB they have accumulated so far. With this add-on cover, you can retain your NCB even if you make a claim during the policy year. Generally, this cover is applicable for claims that do not exceed 25% of the IDV of the vehicle.

For example, let’s assume that you have earned NCB of 20% of your premium, and the IDV of your car is Rs 10 lakhs. If you make any claim up to Rs. 2.5 lakhs (which is 25% of the IDV), you can retain your NCB during policy renewal next year.

Engine and Electronic Circuit Cover

Most regular car insurance policies don’t offer coverage for engine damage. For instance, if there is flooding and you keep running your car’s engine, it can seize the engine and damage it completely. In such cases, you are not eligible for coverage.

With this add-on cover, you can avail engine and electronic circuit cover at all times. Since repairing or replacing the engine and internal circuits is expensive, this cover is highly beneficial.

Loss of Personal Belongings Cover

This add-on cover offers coverage for personal belongings that are damaged or lost in case of an accident, disaster, or theft of your vehicle. Say, you have left your smartphone and laptop inside your car when it is stolen. If you have taken this add-on cover, your insurance provider will reimburse the costs of your stolen personal belongings (mobile and laptop) partly, depending on the conditions mentioned in your policy document.

Daily Cash Allowance

In case your vehicle is damaged in an accident and requires repair at a garage for a couple of days, this add-on cover provides you with a daily cash allowance to meet your daily transportation charges. Some insurance providers even provide policyholders with replacement vehicles for their use while the car is in the garage.

Key Replacement Cover

As the name implies, when you choose this add-on cover, you need not worry about lost or misplaced keys. If you replace your car keys, the insurance provider reimburses the cost of replacing the lost key. However, most insurance companies don’t replace the complete cost of the key.

Medical Expenses Cover

In case of an accident, there are plenty of chances that the driver and the passengers inside your vehicle will be injured. With this add-on cover, you can reimburse the costs of medical expenses incurred for treating passengers in your vehicle during an accident. The medical expenses cover includes hospitalisation costs, as well as doctor fees, room fees, medical treatment costs, etc.

Loss of Baggage Cover

This add-on cover offers reimbursement for baggage damage or loss during an accident. When you take this cover, you can claim compensation for your damaged/lost baggage without losing out your NCB.

Tyre Cover

Generally, damages to tyres are not covered in the basic comprehensive car insurance policy. However, the tyres and tubes of your vehicle are the most affected in case of an accident or other calamity and can cost thousands of rupees for replacements. With this add-on cover, your insurance provider reimburses the costs of damaged tyres.

Windshield Glass Cover

This add-on cover reimburses the cost of repair or replacement of the front or rear windshields in your vehicle, without disturbing the NCB.

Emergency Accommodation Cover

This add-on cover reimburses the cost of emergency accommodation you take in case of an emergency. Say, if your vehicle breaks down in a remote place, and is towed away, you and your family will have to spend the night at a nearby hotel, before you can arrange for alternative transportation to your destination. With this add-on cover, your insurance provider reimburses the cost of emergency accommodation.

Emergency Towing Assistance

This add-on cover offers emergency towing assistance for your vehicle at no extra cost.

Leading Car Insurance Providers in India

Car insurance policies in India are offered by non-life insurance companies. All non-life insurers have to be registered under IRDAI (Insurance Regulatory and Development Authority) of India. Currently, there are 34 non-life general insurance companies that are operating in India.

With the increase in the number of insurance companies in India, customers have plenty of options to choose from. Here, you can find a list of general insurers in India, who offer car insurance in alphabetical order.

1. Acko General Insurance Company

Company Overview:

Acko General Insurance Company was founded in 2016 by Varun Dua, and the company is backed by international investors like Amazon, SAIF Partners, Accel Partners, and Catamaran Ventures. It’s a new-age insurance company, and policies can be obtained within minutes online. Currently, Acko General Insurance Company offers the following insurance products – car insurance, two wheeler insurance, domestic travel insurance, and mobile insurance.

Available Car Insurance Policies:

  • Car Comprehensive Insurance
  • Car Third-Party Insurance
  • Ola Insurance

2. Bajaj Allianz General Insurance Company

Company Overview:

Bajaj Allianz is one of the most popular general insurance companies in India and is a joint venture between Bajaj Finserv Ltd and Allianz SE. Bajaj Finserv holds 74% of the company's shares, and the remaining 26% is with Allianz SE. The company commenced operations in 2001 and is headquartered in Pune.

The company has a vast portfolio of nearly 97 unique products, of which it offers two car insurance products. The company’s net revenue for 2018 was 11,097 crores, which represents a 17% growth compared to the previous fiscal year.

Available Car Insurance Policies:

  • Bajaj Allianz Car Insurance
  • Bajaj Allianz Third-Party Liability Only Motor Insurance
  • Bajaj Allianz Commercial Vehicle Insurance

3. Bharti AXA General Insurance Company

Company Overview:

Bharti AXA is the first general insurance company in India to hold a dual certification of ISO 27001:2005 and ISO 9001:2008. The highlight here is that the company managed to obtain both these prestigious certifications within one year of operations.

Available Car Insurance Policies:

  • Bharti AXA Comprehensive Cover
  • Bharti AXA Third-Party Liability

4. Cholamandalam MS General Insurance Company

Company Overview:

Cholamandalam MS General Insurance Company is a partnership between the famous Murugappa Group from India and Mitsui Sumitomo Insurance Company from Japan. The company has over 100+ branches spanning the length and breadth of the country and employs over 9000 insurance agents in India.

Cholamandalam MS offers a mix of individual and corporate insurance products and covers a wide array of sectors including health, engineering, marine, property, motor, travel, accident cover, and much more.

Available Car Insurance Policy:

  • Cholamandalam MS Motor Private Car Package Policy

5. DHFL General Insurance Company

Company Overview:

DHFL (Dewan Housing Finance Corporation Ltd) is one of the premium real estate developers in India with years of experience providing high-quality, affordable housing across cities. DHFL General Insurance Company is a wholly-owned subsidiary of Wadhawan Global Capital (WGC), UK. WGC is a leading global financial services provider managing assets worth over the US $18.6 billion across industries like lending, insurance, and investments.

Available Car Insurance Policy:

  • COCODrive Comprehensive Car Insurance Policy

6. Edelweiss General Insurance Company

Company Overview:

The Edelweiss Group is one of India’s leading financial services groups offering a wide range of financial services and products. It’s one of India’s home-grown companies that has grown to become a huge conglomerate in the world. The company has touched millions of customers with their unique products.

Available Car Insurance Policies:

  • Edelweiss Private Car Liability Only Insurance
  • Edelweiss Private Car Package Insurance

7. Future Generali India Insurance Company Ltd

Company Overview:

One of the leading general insurance companies in India, Future Generali is a partnership between India’s Future Group (the group behind Big Bazaar, one of India’s leading retailers) and Generali Group, a leading global insurance company from Italy. The company has over 125 branches across India and has sold over 82 lakh policies in the country and has over 2000 corporate clients from across verticals. It’s an ISO 9001:2008 certified company offering excellent customer service and best insurance products.

Available Car Insurance Policies:

  • Future Motor Secure
  • Future Motor Secure – Third-party Only Liability

8. Go Digit General Insurance Company

Company Overview:

Go Digit General Insurance Company is a new-age insurance provider in India with the aim to simplify insurance. The company has an end-to-end online process that handles all your requirements – from submitting policy proposals to filing a claim, the entire process is handled online, and within minutes.

Go Digital General Insurance Company is backed by the global conglomerate Fairfax, which has diversified operations in 30+ countries across the globe. The company is trusted by 25 lakhs+ Indians for their insurance needs.

Available Car Insurance Policies:

  • Digit Car Insurance
  • Available add-on covers include breakdown assistance cover, return to invoice cover, zero depreciation cover, gearbox and engine protection cover and tyre cover

9. HDFC ERGO General Insurance Company

Company Overview:

HDFC banking corporation is one of the two leading private sector banks in India. The HDFC ERGO General Insurance Company is a partnership between HDFC, India’s leading housing loan institution, and ERGO International AG, a global insurance entity from Munich. The partnership between HDFC and ERGO is 51:49. The company offers a wide range of insurance policies to meet the varying requirements of different customers.

One crore+ happy customers, 24 x 7 customer support, wide range of insurance products catering to the specific requirements of different customers, transparent and hassle-free claim settlements, Best Customer Experience Award for 2016 – are some of the reasons to choose HDFC ERGO as your car insurance company.

Available Car Insurance Policies:

  • Single Year Comprehensive Car Insurance
  • Three-Year Comprehensive Car Insurance
  • Third-Party Liability Car Insurance

10. ICICI Lombard General Insurance Company

Company Overview:

ICICI Lombard General Insurance Company is one of the leading private sector insurance companies in India. The company crossed a GWP (Gross Written Premium) worth Rs. 147.89 billion for the fiscal year 2018 to 2019. The company has issued over 26.5 million policies and settled 1.6 million claims.

The company stands out among other insurance providers because of its excellent customer service. Speedy claims processing, a dedicated customer service team to support existing and new customers, ICICI Lombard is one of the trusted insurance providers in India.

Available Car Insurance Policy:

  • Comprehensive Motor Insurance Plan

11. Iffco Tokio General Insurance Company

Company Overview:

Iffco Tokio General Insurance Company is a leading general insurance provider in India. The company is a JV between IFFCO (Indian Farmers Fertiliser Cooperative) and Tokio Marine and Nichido Fire Group, the largest insurance company in Japan.

IFFCO Tokio was started in India in 2000 and offers a wide range of general insurance policies catering to all segments and for various requirements. A unique feature of car insurance policy from IFFCO Tokio General Insurance Company is that the plan offers unlimited zero depreciation cover.

Available Car Insurance Policy:

  • IFFCO Tokio Car Insurance Policy

12. Kotak Mahindra General Insurance Co Ltd

Company Overview:

Kotak Mahindra General Insurance Company is a 100% subsidiary of Kotak Mahindra Bank Ltd, one of India’s fastest growing banks. The company offers a wide range of non-life insurance products to meet the requirements of different categories of customers. Service, innovation, and quality are the three cornerstones of Kotak Mahindra General Insurance Company. As of 2017, the company had over 13 branches in major cities across India and a strong core team of 350+ insurance professionals.

Quick and hassle-free claim settlements, customer-centric operations, customised products and services, digital operations are some of the distinct features of Kotak Mahindra General Insurance Company.

Available Car Insurance Policy:

  • Kotak Car Secure

13. Liberty General Insurance Company

Company Overview:

Liberty General Insurance is a joint venture between the popular Videocon Group and Liberty Mutual Insurance Group, based in the US. This company specialises in two-wheeler insurance, car insurance, and health insurance. The company has won several prestigious awards like the “Rising Star Insurer of India,” “Best Emerging Organisation in BFSI,” and several more.

One of the biggest advantages of availing a car insurance plan from Liberty General Insurance is that it’s not only reasonably priced but also offers a wide array of benefits and other add-on covers that enhance your coverage. Instant policy, instant claim settlement, roadside assistance, and zero paperwork are some of the distinct features of Liberty car insurance plan.

Available Car Insurance Policy:

  • Liberty Comprehensive Car Insurance Policy

14. Magma HDI General Insurance Co Ltd

Company Overview:

Magma HDI General Insurance Company is a JV between Kolkata’s Magma Fincorp Ltd and Germany’s HDI-Gerling Industrie Versicherung AG. The company offers a wide range of insurance policies like marine insurance, liability insurance, motor insurance, fire insurance, engineering insurance, health insurance, and many more.

The company has a high claim settlement ratio – 94.1% for the fiscal year 2017 – 2018. Another huge draw of Magma HDI General Insurance company is that claim settlements are super quick, and nearly 87.17% claims are settled within 30 days.

Popular Car Insurance Policies:

  • Private Car Insurance Package Policy with add-on covers personal accident cover, additional legal liabilities, bio-fuel kit.

15. National Insurance Company

Company Overview:

It’s a state-owned general insurance company that has been operational for more than a century. The country was started in 1906 in Kolkata and was nationalised in 1972. It’s the first company in India to introduce the concept of mobile offices aka offices on wheels. The company offers 24 x 7 live chat support for easy claim settlements and to deal with customer queries.

The company makes it easy for policyholders to renew their existing policies or purchase new policies using their online portal. With offices in all major cities across the country, claim settlements are quite easy with National Insurance.

Available Car Insurance Policies:

  • Liability only cover
  • Comprehensive car insurance package

16. Raheja QBE General Insurance Company

Company Overview:

It is again a joint venture between QBE Holding Pvt. Ltd – a completely owned subsidiary of QBE Insurance Group, Australia and Rajan Raheja Group, India. The company offers well-designed motor insurance plans to meet the needs of both private car owners as well as commercial car owners. The company has a strong product offering for both individual and corporate customers.

One of the most diversified business groups in India, Raheja Groups understand the specific requirements of Indian customers. The global expertise of QBE, along with the local knowledge provided by Raheja Group, help the insurance provider offer excellent motor insurance products for Indian consumers.

Available Car Insurance Policies:

  • Raheja QBE private car insurance
  • Raheja QBE commercial car insurance

17. Reliance General Insurance Company

Company Overview:

One of the most popular private sector general insurance companies in India, Reliance General Insurance Company, offers a wide range of insurance products like motor, travel, health, commercial, and much more. The company has over 139 branches across the country and 28,900+ intermediaries with a large number of clients, including individuals, SMEs, and Corporates.

One of the unique features of a car insurance policy from Reliance General Insurance Company is that you can choose the optional EMI protection add-on cover. If your vehicle is involved in an accident, while you are repaying the loan, the insurer takes care of three EMI payments on your behalf. This offers you immense relief during and after the accident.

Available Car Insurance Policies:

  • Comprehensive Car Insurance Plan with add-on covers nil depreciation, NCB retention cover, consumables cover, engine protect cover, key protect cover, daily allowance benefit, EMI protection.

18. Royal Sundaram Alliance Insurance Company

Company Overview:

The Royal Sundaram Alliance Insurance Company is a joint venture between Sundaram Finance, one of the most trusted non-banking financial corporations (NBFC) in India and RSA – the second largest general insurance company in the UK.

Royal Sundaram is India’s first private general insurance company to be approved by the IRDAI and was incorporated in the year 2000. The company has 2000+ employees across 143 branches and has over 5.20 million customers. The policies of Royal Sundaram Alliance are distributed via various channels – affinity partners, insurance agents, brokers, distribution partners, and online.

Free roadside assistance, free flat tyre service, 100% invoice price, free emergency fuel delivery, extensive coverage with add-ons for passengers and cars are some of the highlights of the car insurance policy from Royal Sundaram Alliance Insurance Company.

Available Car Insurance Policy:

  • Comprehensive Car Package

19. SBI General Insurance Company

Company Overview:

SBI is one of the leading banks in India and has grown to become a household name. It’s the largest bank in India and has over 23000 branches across the country and 5500 RRBs (Regional Rural Banks). The SBI General Insurance Company is a joint venture between SBI and IAG (Insurance Australia Group), a leading insurer from Australia. The JV is split as 74:26, with SBI owns 74% of the total capital and IAG holding the remaining 26%.

The SBI General Insurance Company has a multi-channel distribution model – insurance agents, bancassurance, broking, direct, and retail channels.

Key features of the motor insurance policy from SBI General Insurance Company include – third-party liability as well as loss or damage to the vehicle itself, personal accident coverage. The available add-on covers include NCB protection, nil depreciation, legal liabilities towards employee and paid driver, bi-fuel kit, return to invoice, cover for key replacement, and loss of personal belongings.

Available Car Insurance Policies:

  • SBI General Private Car Package Policy
  • SBI Motor Third Party Liability Insurance

20. Shriram General Insurance Company

Company Overview:

Shriram General Insurance Company was incorporated in 1974 as a JV between India’s Shriram Group and South Africa’s Sanlam Ltd. Shriram Group holds a 74% stake in the company, while the remaining 26% shares are under the control of Sanlam Ltd. The company has over 60,000 employees spread across 3000+ offices pan-India and manages assets worth more than 90,000 crores, making it one of the biggest and fastest growing multi-line general insurance companies in India.

One of the biggest distinguishing factors of Shriram General Insurance Company is its excellent and quick customer service. The company has zero pending customer complaints as of March 2019.

Key features of the car insurance plan from Shriram General Insurance Company are a third-party liability, unnamed passenger cover, and cashless repair. The available optional add-on covers include NCB protection cover, multi-car rebate, key replacement, emergency transport, and hotel expenses cover, personal belongings cover, return to invoice, daily reimbursement, and zero depreciation cover.

Available Car Insurance Policy:

  • Shriram Car Insurance Policy

21. TATA AIG General Insurance Company

Company Overview:

TATA AIG is another trusted general insurance company in India and is backed by two famous companies – the Tata Group of India and AIG (American International Group) from the USA. TATA AIG General Insurance Company was incorporated in 2001, and the company today offers a wide range of insurance products across sectors like – motor, travel, health, and lifestyle.

TATA AIG General Insurance Company’s AUM (Assets Under Management) was valued around 0.6 billion in June 2016. Currently, the company employs 2800+ employees at 152 branches pan India. The company has 347 licensed brokers and over 10,000+ licensed agents.

Available Car Insurance Policies:

  • Auto Secure Private Car Package Policy
  • Auto Secure-Commercial Vehicle Package Policy
  • Goods Carrying Vehicle
  • Passenger Carrying Vehicle
  • Miscellaneous and Special Types of vehicles

22. The New India Assurance Company

Company Overview:

This is another popular public general insurance company in India. The New India Assurance Co Ltd operates not just in India but in 28 countries across the world. The company was started in 1919 and today has nearly 2500 offices across the country.

The biggest draw of The New India Assurance Company is that it offers a wide range of insurance policies at the most affordable premiums, thereby providing healthcare support to people across all economic levels.

Available Car Insurance Policies:

  • Liability Only Policy
  • Package Policy

23. The Oriental Insurance Company

Company Overview:

Founded in the year of our independence (1947), The Oriental Insurance Company has been offering a wide range of healthcare plans to suit the needs of different customers. It’s a central government run business and offers policies catering to the needs of both rural and urban consumers. The headquarters of The Oriental Insurance Company is in New Delhi, and the company has operations in other countries like Dubai, Kuwait, and Nepal.

Available Car Insurance Policy:

  • Motor Package Insurance Policy for Private Car

24. United India Insurance Company

Company Overview:

This is another nationalised insurance company in India and has over one crore policyholders. The company offers a wide range of insurance products covering all sectors from rural to urban. The company was started way back in 1938, and in 1972 it was nationalised by merging 12 Indian insurance companies, 5 Indian operators of foreign insurers, 4 Co-operative insurance societies and the general insurance wing of LIC. T

Today, the company employs a massive workforce of over 18,000+ personnel, and 1340 offices and micro-offices in tier-I, tier-II, and tier-III cities, towns and villages across the country.

The car insurance plans from United India Insurance Company offer comprehensive protection for your vehicle at affordable premiums.

Available Car Insurance Policy:

  • Motor Package Insurance Policy for Private Car

25. Universal Sompo General Insurance Co Ltd

Company Overview:

This is a private-public joint venture between three leading banks in India IOB, Allahabad Bank, Karnataka Bank, Dabur a leading FMCG (Fast Moving Consumer Goods) company and Sompo Japan Nipponkoa Insurance Inc, the largest insurance company in Japan for casualty and property insurance.

Universal Sompo General Insurance Company offers a wide range of healthcare products and also has extensive insurance policies in motor and commercial insurance. The company offers several robust motor insurance policies that suit the needs of all income groups.

Available Car Insurance Policies:

  • Motor Private Car
  • Motor Passenger Carrying Vehicles
  • Motor Goods Carrying Vehicles
  • Motor Miscellaneous Vehicles

Four Factors to Keep in Mind while Choosing the Right Car Insurance Provider

Evaluating car insurance providers solely based on premium rates is not the smartest move. A policy may have a low premium, but will not provide you with adequate coverage, when you need it the most.

Before you choose the right car insurance policy that works for you, you need to consider the right insurance provider. Here, we give you four factors to consider while choosing the best insurance policy for your beloved car.

The authenticity of the Insurer

Make sure to check whether the insurer is licensed to provide insurance policies in the country. You can verify this by checking for the company’s IRDAI number. You can find the insurer’s IRDAI number on their website. Verify this number on the homepage of IRDAI to check the authenticity of the insurer.

Financial Overview

Make sure to check the financial health of the insurer. This gives you an idea of whether the company will be able to settle your claims, without any delay. You can easily find the financial standing of a company by checking the company’s latest news and other reports via a Google search.

Claim Ratios

There are two important claim ratios to consider – claim rejection ratio – this is the number of claims rejected, and claim settlement ratio – this is the number of claims that have been successfully handled. Look for lower rejection ratios and higher settlement ratios.

Periodic Check of the Company

When it’s time for policy renewal, make sure to evaluate the insurer’s current standings. Scrutinise whether you are satisfied with the insurer’s customer service, and the way they have treated your claims if any. Also, check whether you have adequate coverage, and the company provides you with cost-effective premiums. If you are not satisfied, you can switch your policy to another insurer.

20 Tips to Purchase the Best Car Insurance Policy in India

There are dozens of car insurance providers and hundreds of different car insurance policies. Choosing the right policy that meets your requirements may feel overwhelming. Worry not, here you can find the best tips to help you zero in on the best car insurance policy for your vehicle.

1. Do Your Homework

Start by making yourself aware of car insurance terminology. Then, do a comparison of the different car insurance policies available to you. There are several online tools that let you compare the features of various car insurance policies.

Compare policies based on the following factors – premium cost, coverage provided, benefits and features, claim settlement ratios, ease of renewal, customer support, and service, etc. Use our car insurance calculator to find the right policy that meets your specific requirements.

2. Consider Claim Ratio

While choosing car insurance policies, you have to consider three crucial claim ratios:

Claim Settlement Ratio (CSR)

Claim Settlement Ratio is calculated using the following formula:

CSR = number of claims settled / number of reported claims + remaining claims at the start of the year – remaining claims at the end of the year

Claim Repudiation Ratio (CRR)

Claim Repudiation Ratio is calculated using the following formula:

CRR = Number of rejected claims / Total number of claims

Claims Pending Ratio (CPR)

Claims Pending Ratio is calculated using the following formula:

CPR = Total number of outstanding claims / Total number of claims

These ratios help you get an idea of the claims history of various insurance providers. Look for insurance providers with high CSR and low CPR and CRR. But, you cannot compare two insurance providers using the claim ratios alone. This is because new insurance companies will have a low CSR, due to the lower claims settled.

If you have shortlisted two insurance providers, who offer attractive car insurance policies with the same features and at a similar insurance rate, then using the claim ratios can help you seal the deal.

3. Understand Third-Party Insurance and What’s Covered in it

Third-party insurance means the beneficiary of this policy is not the policyholder but the person who is affected in an accident. Third-party insurance offers legal and financial coverage to third-party people and property. Purchasing third-party insurance is mandatory, and the process is quick and hassle-free.

A standard third-party car insurance policy offers the following coverage:

  • Damages to third-party property
  • Bodily injury or death to third-party
  • Accidental death to the driver or vehicle owner in an accident
  • Permanent disability to the driver or vehicle owner in an accident

How does third-party insurance work?

While claiming third-party insurance, the insurance company pays the benefits directly to the third-party and not to the policyholder. The premium for third-party insurance is not dependent on the type of vehicle you own. This is because determining the liabilities beforehand is not possible. Hence, the premium is nominal and is usually the same for all. Settling third-party liability insurance usually involves the lawyers of the policyholder and the injured. It can be purchased and renewed quickly online within a few minutes.

What is not covered under the Third-party Insurance?

  • It does not cover own damages that are the damages sustained by the policyholder's vehicle.
  • Claims arising because of contractual liabilities when the vehicle is driven by someone else other than the owner of the vehicle or specified drivers listed in the policy.
  • Losses, damages, and liabilities that occur outside the geographical boundaries as mentioned in the policy document.
  • Liabilities due to nuclear weapons, terrorist attacks, the act of war, enemy invasion, radioactive contamination, etc.

4. Read the Policy Document Carefully before Purchasing

It’s essential that you read the policy document carefully before you purchase it. If you find it difficult to understand the technical terms, you can check out our online guides that detail the terms and conditions of different car insurance policies.

While reading the policy document, you have to check for the following:

  • Who is covered under the policy
  • What is covered – coverage inclusions, exclusions, and limitations
  • Tenure of coverage – when the coverage commences and when it ends
  • How much coverage is provided (the maximum amount you are eligible for)
  • The premium you will have to pay for this coverage
  • How to file a claim
  • What to do if the policy document is lost
  • How to reach the customer care team

If you have any queries or doubts, don’t hesitate to reach out to an insurance expert to help you understand the different terms and conditions, the benefits offered, etc. Make sure to read the document carefully before signing on the purchase agreement.

5. Opt for Comprehensive Cover for Better Coverage

While third-party insurance is sufficient to meet legal requirements, it’s highly recommended that you opt for comprehensive cover for enhanced coverage for both the vehicle and the driver. As the name implies, comprehensive cover offers complete coverage for your vehicle and protects it from accidents, collisions as well as legal liabilities to third-parties, natural and man-made disasters, theft, burglary and more. You can also choose one or many add-on covers to enhance the coverage.

6. Evaluate your Car Insurance Policy Periodically

An insurance policy is not a one-time affair. You have to review it periodically, as your life changes and evolves. Insurance experts recommend that you review your policy once every year, to determine if you require less or more coverage than the previous year.

You may have to alter coverage to your car insurance policy when one or more of these life conditions occur:

  • You are getting married/divorced
  • You are starting a family
  • You are changing your career, switching jobs, etc.
  • You are getting self-employed
  • Your income rises or decreases significantly
  • Your children move out of the parental home
  • Your ageing parents move in with you
  • You are retiring

7. Credit Scores and Car Insurance Policy

Yes, just like all other financial products, your credit rating plays a role in determining the premium you will be charged by the insurance provider.

The following factors are considered while determining the premium rate for your car insurance policy:

  • Your payment history, history of late/missed payments
  • Credit score and history
  • Total number of loans

However, factors like your marital status, sex, address, ethnicity, and income levels are not considered while determining your car insurance premiums.

8. Choose Personal Accident Cover

With a large number of road accidents occurring every hour in India, you need to take extra precautions to protect yourself from all contingencies. Most car insurance providers offer personal accident cover along with their comprehensive car insurance plan. When you choose a car insurance policy with personal accident cover, your family members receive a lump sum, in case if something were to happen to you in an accident.

Personal Accident Cover is applicable under the following conditions:

  • The accidental death of the policyholder
  • Total or partial disability of the policyholder
  • Accidental loss of limbs or eyesight
  • Injuries or death of the policyholder due to a terrorist attack
  • Monetary cover as daily payment for the policyholder during his/her stay at the hospital

Here are some reasons why it’s beneficial to choose a car insurance policy that offers personal accident cover:

  • Worldwide coverage
  • Quick and hassle-free claims process
  • Child education benefit (optional)
  • Legal and funeral expenses are covered
  • As an enhancement to existing health cover
  • No extra documentation or medical tests during policy issuance

9. Opt for Bundled Car Insurance if you Own more than One Car

If you have more than one car in your household, you can opt for a bundled car insurance policy. With bundled car insurance, you are eligible for premium discounts, when you more than one car insurance policy from the same insurance provider.

10. Compulsory Deductibles do not influence Premium Rates

A compulsory deductible is the amount you pay out of pocket for each claim that you make. The compulsory deductible for four-wheelers starts from Rs. 500 in India as per the IRDAI (Insurance Regulatory and Development Authority of India) rules.

The compulsory deductible may be higher for older vehicles that pose higher risks. Similarly, cars with bigger engine capacities like SUVs may have higher compulsory deductibles. However, remember that higher compulsory deductibles do not lower the overall premium amount.

11. Higher Voluntary Deductibles lower Premium Rates

As the name implies, the voluntary deductible is not mandatory. It’s the amount you volunteer to pay out of pocket while filing a claim. Higher the voluntary deductible lower is the policy premium. Both compulsory and voluntary deductibles are only available for comprehensive car insurance policies and not third-party insurance.

12. Know the IDV of your Vehicle and Never Undervalue

The Insured Declared Value (IDV) is the maximum amount that you can claim from your car insurance provider while filing a claim. This is the amount the insurance company is liable to pay you if your vehicle gets stolen or irreparably damaged.

Generally, the IDV is based on the age and the type of vehicle. For instance, a brand new car has a higher IDV than a three-year-old car of the same model and brand. So, it can be stated as – IDV is the current market value of the vehicle.

When you subtract the depreciation of the car from its current market selling price, you can arrive at the IDV. The IDV does not include registration costs, insurance costs, and other costs you incur while purchasing the vehicle.

When it comes to extra accessories and fittings you have in your vehicle, the IDV is determined separately and not included in the IDV of the vehicle. Knowing the IDV of your car is crucial while purchasing a car insurance policy, as it helps you negotiate the premium rates better.

It’s a common practice for policy purchasers to quote a reduced IDV to lower the overall premium. However, this isn’t a smart choice, as it reduces the amount you can claim in case of an emergency.

13. Check if you are eligible for NCB (No-Claim Bonus)

You can avail NCB discount on the premium at the time of renewal if you haven’t made any insurance claims during the previous year. When you don’t file any claims for the entire policy period (generally one year), your NCB comes into effect. The NCB starts from 5 – 10% of the premium and it can go up to 50% if you don’t file any claims for several consecutive years.

Think of the NCB as a gift from the insurance provider, congratulating you for your good driving.

14. Premium depends on your Car Engine’s Capacity and your Location

Generally, the premium is higher if you are located in a metro city. Say, Person A and B have the same model of car and Person A lives in a metro while Person B lives in a rural town. The premium paid by Person A will be higher than the premium paid by Person B.

Apart from the geographical location, another crucial factor that plays a role in determining the premium is the engine capacity. Higher the cubic capacity of the engine, higher is the premium charged.

15. Customisations

If you love adding extra fittings and accessories to your vehicle, then you have to keep in mind that most car insurance policies do not offer coverage for extra fittings, other than what’s provided by the car company.

16. Look for Insurance Policies that Offer Cashless Claims

Choosing a vehicle insurance policy that offers cashless repair services at network garages is a huge perk. Generally, when your vehicle gets damaged in an accident or sustains other damages, you get it repaired at a garage near you. Pay for the repair charges, submit the bills to your insurance provider to claim reimbursements.

With cashless repair, you can get your vehicle serviced at any network garage without having to pay the money out of your pocket. This is a huge bonus, as you need not run around trying to raise cash for repairs during an emergency.

However, remember that while the cashless option is a good perk to have, you should not overlook other factors listed here.

17. Number of Network Garages and Proximity

While evaluating car insurance providers, make sure to check the number of network garages in their list and also the location of network garages. For instance, an insurance provider may offer 500+ garages in their partner network. But, if not even one is located in your city, then it may not be the right choice for you.

18. Time take for Policy Issuance and Renewal

This is another crucial factor to consider while comparing car insurance providers. Look for insurance providers who issue the policy immediately or within a couple of working days. Today, most insurance providers have online policy issuance facility.

This is a huge perk as you can submit all the required details online, upload supporting documents, and the policy is issued within minutes, and the actual policy document is dispatched to your address. The same applies for renewal too.

19. Consider the Efficiency of Customer Service

While this may appear as not so important factor at first glance, you need to choose an insurance provider who has an excellent customer care team. There may be plenty of instances where you have doubts regarding your policy, other queries, and you need to make sure to reach out to the team immediately.

Look for insurance providers who offer 24 x 7 customer hotline facility. This helps you reach out the customer service team quickly in case of emergencies.

20. Read Reviews and Ask Around

The best way to know more about an insurance provider is to check online reviews. You get a clear picture of the company’s services from other customers. Additionally, you can also check with your friends and family to get unbiased opinions about different insurance providers.

However, remember that all online reviews contain a mix of both positive and negative feedback. So instead of concentrating on a couple of reviews consider the overall opinions.

How is the premium of a car insurance policy calculated?

The premium of your car insurance policy is influenced by several factors. Here are the top factors that play a critical role in determining your premium.

1. Type of car insurance policy – Comprehensive car insurance policies have a higher premium compared to third-party liability insurance. This is because the former offers extensive coverage, while the latter offers only bare-bones coverage.

2. The model, make and a variant of the car – Since different cars have varying risk factors, the insurance premium depends to a large extent on the type of car you own.

3. RTO – The zone where you have registered your vehicle plays a crucial role in determining the premium. In India, the premiums are based on the geographical location of vehicle registration. The locations are classified as follows:

  • Zone A – This includes metros like Delhi, Mumbai, Chennai, Bengaluru, Kolkata, Hyderabad, Ahmedabad, and Pune.
  • Zone B – The rest of India

Insured Declared Value – This is the market value of your vehicle. Higher the IDV, higher is the insurance premium and vice versa.

Age of the vehicle driver – It’s considered that older drivers are likely to drive more responsibly compared to younger drivers. Generally, the premium paid by younger drivers is higher, since the insurer believes that they are likely to drive rashly. On the other hand, the premium paid by older drivers is comparatively lower as they are likely to practice cautiousness while driving.

Claim History – If the policyholder doesn’t file any claims during the policy year, then the insurer rewards the policyholder with the No Claim Bonus. The higher the NCB, the lower is your premium.

Tips to Reduce Car Insurance Premium

Most vehicle owners would like to reduce the premium they pay for car insurance. However, remember that the lower premium you pay, the lower is your coverage. Make sure not to compromise on coverage, for the sake of reducing the premium.

When you compromise on coverage, for saving a few hundred rupees on the premium, you end up paying large sums of money out of your pocket, in case of an accident or damage to your vehicle. This essentially nullifies the very purpose of car insurance – providing you financial security in case of an accident.

So, is there any other way to reduce car insurance premium without compromising on the coverage? Yes. Continue reading to find smart ways to save on premium without sacrificing your financial security:

Get WIAA or AAI Membership

If you have a membership to the AAI (Automobile Association of Upper India) or WIAA (Western India Automobile Association), then you can avail a discount on the premium you pay for the vehicle insurance.

Avoid filing small claims

When you file small claims that you can pay out of your pocket comfortably, you end up losing the much higher NCB. When you lose the NCB your insurance premium increases. So, make sure that you file only large claims and handle small damages out of your pocket.

Choose only the Add-On Covers that you absolutely require

While it may seem like having plenty of add-on covers improves your overall coverage, remember that each add-on cover you choose increases the overall premium. Hence, choose only the add-on covers that you are most likely to use.

How to compare car insurance policies from different providers?

Before you choose a particular plan, you need to compare various car insurance policies from several insurers. This helps you evaluate the benefits and compare the coverage in different plans, choosing the best plan that works for you.

Today, it’s quite easy to compare different policies. Several online car insurance calculators help you compare various policies to pick the “best” one. Make use of our page to compare the available policies, premium rates, add-on covers, claim settlements, features, customer service ratings and availability of cashless network garages of different insurance providers to help you choose the best car insurance provider who offers the best service at affordable rates.

Make use of these five factors while comparing car insurance policies online.

1. Premium Vs. Cover

While it’s recommended that you don’t use premium costs as the sole deciding factor, it’s advisable that you find out which policy offers the best cover at low premiums. Choose an insurance plan that offers you adequate coverage for affordable prices.

2. Deductibles

Insurers have varying deductible structures. Generally, all insurers offer a discount on the premium for higher deductibles. The deductibles offered are classified into two types – compulsory and voluntary.

Choosing the right deductibles is essential. Higher the deductible, higher is the amount you have to pay out of your pocket for claims. On the other hand, low deductibles incur higher premiums.

Choose an insurance company that offers you the best premium discount for deductibles.

3. No-Claim Bonus

No-claim bonus is the award your insurer offers you for safe driving. You can accumulate the NCB over the years, and you can avail a maximum discount of 50% on the premium. Remember that you can retain your previously accumulated NCB, while you purchase a new car or transfer your insurance to another insurer.

4. Cashless Garages

This is a pretty straightforward factor. The higher number of network garages, more convenient it is for the customers. Additionally, look for insurance companies that have a good list of cashless network garages in your city or town.

Use this chart to do a quick comparison of the total number of cashless garages/workshops offered by leading insurance companies in India.

S.No.InsurerNumber of Garages in Cashless Repair Network
1Bajaj Allianz Car Insurance4000+
2Bharti AXA General Insurance Company3800+
3DHFL General Insurance Company900+
4Edelweiss General Insurance Company1000+
5Future Generali India Insurance Company Ltd900+
6Go Digit General Insurance Company1400+
7HDFC Ergo General Insurance Company6800+
8ICICI Lombard General Insurance Company3900+
9Iffco Tokio General Insurance Company4300+
10Liberty General Insurance Company2500+
11National Insurance Company3200+
12Reliance General Insurance Company3800+
13Royal Sundaram Alliance Insurance Company3300+
14SBI General Insurance Company1500+
15Shriram General Insurance Company3100+
16The New India Assurance Company1100+
17The Oriental Insurance Company3100+
18Universal Sompo General Insurance Company3500+

5. 3500+

The list of add-ons offered varies from one insurer to another. Look for an insurer who offers the best add-ons that you require. This ensures you can increase your coverage without changing the basic policy.

Car Insurance Glossary – Terms to Know

Familiarising yourself with car insurance terminology will help you make an informed decision while choosing car insurance policies and negotiating with insurance representatives. Here are the top terms that you need to know:

Anti-theft Device

As the name implies, it is a device that reduces the chances of your car being stolen or broken into. When you install an anti-theft device in your car, it produces a loud alarm when someone tries to break into it or try to force it open with lock pricks.

As the name implies, it is a device that reduces the chances of your car being stolen or broken into. When you install an anti-theft device in your car, it produces a loud alarm when someone tries to break into it or try to force it open with lock pricks.

Approved Garages

Repair workshops that are authorised to make repairs and replacements for your vehicle, as per the norms mentioned by the insurance provider. In case of an accident or other damages to your car, it’s highly recommended that you get it repaired at an approved garage so that you can claim reimbursements quickly and without hassles.

Break In Insurance

When you forget to renew your car insurance on time, it causes the policy to lapse. In such conditions, it is termed as “break in insurance.” To continue insurance coverage for your vehicle after a break in insurance, you have to get your vehicle inspected at a garage recommended by the insurance provider. When the garage owner certifies your vehicle, you can pay the premium to avail insurance cover.

Cashless Garage

Generally, when your vehicle is damaged, you take it to a garage, get it repaired and submit the bill to your insurance provider to get reimbursements. Today, several insurance providers offer cashless garage facility.

With this feature, you can get your vehicle repaired at no cost at any garage that is part of the insurance provider’s network. The garage operator raises the bill directly with the insurance provider. You just have to pay the amount that is more than what’s covered under your policy.

Comprehensive Cover

When you have comprehensive car insurance cover, it protects your vehicle from accidental damages and losses during the following unforeseen scenarios:

  • Theft, burglaries, and housebreaking
  • Vandalism, strikes, riots
  • Explosion or self-ignition due to fires, lightning, etc.
  • Natural disasters like earthquakes, cyclones, floods, storms, tempest, hurricane, typhoon, frost, landslide, rockslide, etc.
  • Malicious acts, terrorist attacks
  • During transit by inland waterways, roadways, railways, airlifts, etc.

Additionally, all comprehensive car insurance policies include third-party liability cover. While the comprehensive cover is not compulsory, it’s highly recommended that you choose it, to protect your vehicle from any one of the above mentioned accidents.

Compulsory Deductibles

When you file a claim with the insurance provider, you have to bear a small part of the total claim amount. This amount that you pay out of pocket before the policy cover kicks in is referred to as compulsory deductibles. The reason for compulsory deductibles is to prevent policyholders from applying for very small and frivolous claims.

For instance, if the compulsory deductible in your policy is Rs. 5000 and you are claiming Rs. 20,000 the insurance provider will reimburse Rs. 15,000 and you have to pay the remaining Rs — 5000 out of your pocket.

A compulsory deductible is determined based on the cubic capacity of your car, and it usually starts from Rs. 1000.

Endorsement

Making changes to an existing car insurance policy is known as an endorsement. For instance, if you add accessories to your car like a Bluetooth music system, then you need to include this accessory as part of the insured vehicle. In such cases, you have to file an endorsement with your insurance provider to reflect this change.

Grace Period

There are times when you may have forgotten to renew the insurance policy before the due date. In such cases, you can renew the policy within the grace period to avoid a break in insurance. The grace period is generally 30 days after the policy due date. Make sure to check whether your insurance provider offers a grace period.

IDV (Insured’s Declared Value)

In terms of car insurance, the IDV of your vehicle is considered as the “sum insured.” The IDV varies from one car to another. Several factors determine the IDV of your vehicle like – age of the vehicle, manufacturer, model, make, engine type, the capacity of the vehicle, etc.

For new cars, the IDV is fixed based on the listed selling price of the vehicle. For older cars, the IDV is determined after deducting the depreciation of the vehicle, based on its age. While determining IDV, special accessories fitted in your vehicle like media player are not considered. For these accessories, the IDV is determined separately.

Legal Liability

When you accidentally damage third-party property or cause injuries/death to third-parties, you must pay due compensation to the victim or next of kin in case of death. This compensation is legally enforceable, and hence, it is referred to legal liability.

No Claim Bonus

This is a reward for policyholders for their good driving skills. If you do not make any claims on your car insurance policy during the policy tenure, then the insurance provider offers you No-claim Bonus, generally referred to as NCB.

If you are awarded the NCB, you can get discounts up to 50% on the premium payment for the subsequent year. The best part is that NCB gets accumulated year-on-year. The discount on insurance premium increases accordingly to the accumulated NCB. For instance, if you receive a 20% discount on the premium the first year of NCB, your premium is reduced by 30% for the second year, 40% for the third year, 45% for the fourth year, 50% for the fifth year and so on.

Some insurance providers also allow for the transfer of NCB. This means if you switch from insurance provider A to B, and you have availed NCB with insurance provider A, your new insurance provider B carries forward the NCB you have accumulated, offering you a discount on the premiums.

Own Damage (OD)

When an insurance policy mentions that it offers own damage cover, it includes coverage for damages or losses sustained by your vehicle due to theft, vandalism, fire, etc. When you have own damage cover, your insurance provider compensates for the expenses incurred by your vehicle for repair or replacement of parts in a road accident.

Policy Holder

This refers to the owner of the policy. It is also the owner of the vehicle.

Policy Period

This refers to the term during which the policy is in force. Generally, the policy period is one year from the date of commencement.

Premium

This is the amount the policyholder has to pay to the insurance provider for covering the risks. The premium for third-party liability cover is lower than the premium for comprehensive insurance coverage.

Roadside Assistance

If your car breaks down somewhere, if you have roadside assistance as part of your insurance cover, you can avail emergency mechanical services from your insurance provider. These emergency services include changing a flat tyre, towing of your vehicle, arranging for alternate transport for you, calling for ambulance services if needed, getting hotel accommodation for you and more.

Third-party Insurance

As per the Indian Motor Vehicles Act, all car owners should have third-party insurance. This is also referred to as third-party liability cover or act only cover. When you have third-party cover, the beneficiary of the policy is not the insurance provider or the insured, but a third-party who is involved in the accident. Third-party cover compensates for property damages and loss incurred by third-parties.

Voluntary Excess

When purchasing a car insurance policy, you can voluntarily opt to co-pay part of all claims. The voluntary excess is beyond the compulsory deductible mentioned by the insurance provider. When you choose a voluntary excess, you usually receive discounts on your annual premium.

For instance, if the claim amount approved by the insurance provider is Rs. 10,000 and your compulsory deductible is Rs. 2000 and the voluntary excess is Rs. 3000, the net amount reimbursed by your insurance provider is Rs. 5000. Generally, the voluntary deductible is available in various ranges starting from Rs. 1500 to Rs. 15,000, and more.

Car Insurance FAQs

1. What is the compensation offered to third-parties under the third-party insurance?

Generally, most car insurance policies offer third-party coverage sum up to Rs. 7,50,000. This means your insurance company will offer a maximum sum assured up to Rs. 7,50,000 to third-properties for injuries, and other property damages.

However, the policyholder has the option to restrict coverage for third-party property damage from Rs. 7,50,000 to Rs.6000 by paying a lower premium under the “Liability Only” section.

2. What is the period of coverage for car insurance policies?

All car insurance policies are valid for one year from the date of commencement. It has to be renewed before the due date, and most insurance providers do not offer a grace period for car insurance policies.

Remember that if your policy lapses even by one day, then you have to take the vehicle for inspection by the authorities. Also, when you let a comprehensive car insurance policy lapse for more than 90 days, you will lose all your accumulated no claim bonus.

3. Can I retain/carry forward my No Claim Bonus, if I switch insurance providers during renewal?

Yes. You can retain the No Claim Bonus, you have accumulated with your previous insurer, while you switch insurance companies. To avail this facility, you have to produce proof of the NCB you have earned with your current insurer.

Alternatively, you can submit records of your expiring policy, along with certification from the insurer stating that you have not lodged any claims for the last year. You have to submit this letter to your new insurer during renewal, to carry forward the no claim bonus.

4. Is there any way I can lower my car insurance premium?

Apart from the No Claim Bonus offered by the insurer, there are other ways to reduce your premium. Some of the popular discounts include:

  • Premium discounts are available for members who belong to the AAI (Automobile Association of India), Vintage Cars club (These are private cars that are certified by the Vintage and Classic Car Club of India).
  • People who have installed anti-theft devices approved by ARAI (Automobile Research Association of India), Pune.
  • Discounts for vehicles that have been designed/modified for mentally challenged persons, handicapped, the blind. These vehicles have to be endorsed by the corresponding RTA (Road Transport Authorities).
  • Additionally, you can reduce the premium by opting for a reduction in Third-Party Property Damage. However, remember that when you choose this third-party option liabilities gets reduced from Rs. 7,50,000 to Rs. 6000.

5. What is policy endorsement?

Endorsement refers to the written document from the insurer that agrees to the changes made in the policy. It’s issued when you make any change to an existing insurance policy.

6. I recently moved to a new home. Can I change the address in my car insurance policy and how to do it?

Yes, you can make changes to your policy like changing your address, modifying the intended usage of the vehicle and more. To apply for such changes, you have to submit a letter to your insurer requesting the same. The insurer will require you to provide proof of the changes.

Once the document is verified, the insurer issues the endorsement letter, and the revised policy document is issued to you. Some endorsements may cause a change in the premium rates, and you will have to pay the additional premium.

If any endorsements are made, make sure to check the correctness of it.

7. What are the documents that I should keep in my car while driving anywhere in India?

Here are the essential documents which you should always keep in your car.

  • The insurance certificate
  • A photocopy of the RC (Registration Certificate) of the vehicle
  • A photocopy of the driving license of the person who is driving the car
  • Certificate issued by the pollution board

8. I recently purchased a car from another owner. Can I continue using the car insurance of the previous owner?

No. As per the Motor Vehicles Act, the RC and the insurance of the vehicle must have the same name and the same address to be valid. If there are any discrepancies, then your insurance company will not entertain your claims. You can transfer the insurance certificate from the previous owner to your name, for a nominal fee. Get in touch with the insurance company to submit a fresh proposal form.

9. I am planning to sell my car. How do I transfer my insurance to the new owner?

You need to submit a letter to the insurance company stating the details of the sale and the new owner. The insurance company will require the new buyer to submit a fresh policy proposal form. By paying a nominal fee, the transfer certificate is issued, and the new owner can continue with the policy till the expiry date.

Remember for comprehensive policies, the transfer has to be done within 14 days from the date of ownership transfer. If the insurance is not transferred to the new owner within this period, no claims will be payable for own damage of the vehicle.

10. I am planning to install an LPG/CNG kit in my car. What is the procedure to be followed regarding changes to my insurance policy?

If you plan to fit an LPG/CNG kit in your vehicle, then you have to bring it to the notice of the RTO that issued the RC of the vehicle. They will make corresponding changes to the RC, that notifies the new installation.

Additionally, you have to inform your insurance provider so that the kit is included in the insurance coverage. You will have to pay an extra premium for the value of the kit under the “Own Damage” section as well as the “Liability Only” section.

11. I have forgotten to renew my car insurance policy on time. What should I do now?

In the case of a lapse in insurance policy renewal, get in touch with your insurance company immediately to find out what needs to be done. Some insurance providers offer a grace period after the policy expiry date. If the grace period is available and isn’t over yet, you can renew the policy immediately without any issues.

If there is no grace period or if it is over, then you have to apply for a fresh policy. When you apply for a fresh policy, the insurance company will conduct an inspection of your vehicle to check for any pre-existing damages and determine the premium accordingly.

12. What happens to my NCB if my car insurance policy lapses?

This depends on your specific situation. If the policy has lapsed only for a few days, your insurer may let you retain your No Claim Bonus. On the other hand, if it’s several days since your policy has lapsed, the insurer may not let you retain the NCB, and you have to start from scratch.

To avoid such situations, make sure to set up reminders to renew the policy ahead of time.

13. I have lost my car insurance policy. Is it possible to get a duplicate copy?

Yes. Get in touch with your insurance provider. You will have to submit a written request asking for the same. Generally, the insurance provider will charge you a nominal fee for issuing a duplicate copy of your lost insurance policy.

14. What are the documents needed for filing a motor insurance claim?

What are the documents needed for filing a motor insurance claim?

Here are the general documents required for filing a claim:

  • Duly filled-in claim form (this can be downloaded from the website of the insurance provider, or you can obtain a physical copy visiting the nearest branch of the insurer)
  • Repair invoice
  • FIR, in case of vehicle theft, damage by other persons or an accident
  • Additionally, you have to submit the keys of your vehicle and the non-traceable certificate in case of theft

15. Can I purchase a car insurance policy for a longer term?

Generally, all car insurance policies are valid only for one year. However, the Supreme Court of India issued a new directive that is effective from the 1st of September 2018. As per this directive, all new car owners can opt for a car insurance policy for a longer term. You can choose one of these long-term policies as per your requirements and convenience:

  • Liability only policy – duration three years
  • Package policy – duration three years
  • Bundled policy – which comes with liability cover of 3 years and own damage cover of 1 year

16. Can I transfer my No Claim Bonus to a new car?

Yes. To transfer your No Claim Bonus to the new vehicle, you have to sell the old car. When you do so, your current insurer issues an NCB retaining letter. You can use this letter as proof and transfer your NCB to the new car.

17. What does the term ARAI mean in car insurance policy?

ARAI refers to the Automotive Research Association of India. If you have installed an ARAI approved anti-burglary alarm in your car, you can avail a discount on the “Own Damage” premium of your car insurance policy.

18. Can I pay the car insurance premium in instalments?

No. As per the Insurance Act of 1938, Section VB64, it’s not possible for the insurer to bear the risk for your vehicle until you pay the entire premium in advance. Hence, all insurance providers require you to pay the premium in full, before the commencement of the policy’s terms and conditions.

19. Can I just choose an add-on cover without opting for a comprehensive car insurance policy?

No. Add-on covers are meant to be added on top of the basic insurance policy and cannot function as stand-alone policies.

20. In case my car meets with an accident, can I move it from the place of the accident?

Yes, for private vehicles, you can drive or tow the vehicle to a garage to check for damages and to make repairs. However, if the vehicle is in an immovable condition and if there are any leakages of engine oil or coolant, it’s highly recommended that you don’t attempt to start your car without the assistance of a mechanic.

21. Does the premium of car insurance increase after a claim?

Yes, it increases based on the claim you have made. It is generally between 10% to 25% depending on factors such as damage to the vehicle and value of the vehicle.

22. WHat is salvage loss and total loss?

Total Loss: A loss that occurs when the insured car is totally destroyed which can neither be repaired not recovered. In this case, one can get the maximum claim settlement.

Salvage Loss: When a vehicle is declared a total loss, it can also be rebuilt and used for operation. Now the vehicle will have a salvage title which requires a special inspection to put on the road again.

23. WHat is the validity of a PUC certificate?

The validity of the PUC for a brand new vehicle is 1 year. After the lapse of 1 year, the PUC test must be conducted once every six months.

24. Why is a PUC needed?

PUC stands for Pollution Under Control, and it is mandatory to get the certification for your vehicle as per Central Motor Vehicles Rule 1989. Every vehicle releases smoke in the atmosphere which may have harmful effects. However, it is important to check the emission level and keep it under control. Henceforth, it is mandatory to get a PUC certificate.

25. How is a PUC check done?

PUC check is done at most of the petrol stations and independent centres that conduct provide the certification. It may cost anywhere between Rs. 60 to Rs. 100. The following checks are done on vehicles.

  • Gas Gap Pressure Check
  • The Second Generation On-board Diagnostics
  • The Inspection and Maintenance Test
  • The Single Idle Speed Test

26. How many times can car insurance claim be done in a year?

You can make claims multiple times in a year. There is no limit to the number of claims. But you need to ensure that your claim does not exceed the amount insured.

Latest & Update Car Insurance News

IRDAI Issues a Warning against Digital National Motor Insurance26 Feb 2021

The IRDAI (Insurance Regulatory and Development Authority of India) has issued a public notice warning customers not to purchase motor insurance from Digital National Motor Insurance Company. IRDAI warns that the company is fake and doesn’t hold the ...

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The IRDAI (Insurance Regulatory and Development Authority of India) has issued a public notice warning customers not to purchase motor insurance from Digital National Motor Insurance Company. IRDAI warns that the company is fake and doesn’t hold the requisite licenses and permissions to sell insurance policies. Customers should always check the legitimacy of the insurer before purchasing a plan to avoid falling prey to such scams.

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