Car insurance shields policyholders financially from calamities such as fire, theft, natural disasters, man-made disasters, total loss, and third-party death or property damage. According to the Motor Vehicles Act of 1988, all four-wheelers in India must have a car insurance policy.
Understanding Car Insurance
You and your four-wheeler are financially protected by car insurance, sometimes referred to as vehicle insurance or motor insurance, against any loss or damage brought on by mishaps, theft, fire, disasters, and other people’s people or property. Third-party auto insurance, standalone own-damage (OD) auto insurance and comprehensive auto insurance are the three main categories of motor vehicle insurance coverage.
What are the Key Features of Car Insurance Policy?
| Categories | Key Features |
|---|---|
| Third-party damages | Death, injuries & property damages |
| Own damage cover | Available under standalone and comprehensive |
| No Claim Bonus | Up to 50% |
| Car insurance premium | Starting at ₹2094* |
| Discounts | Anti-theft, NCB, Deductibles, AAI Membership |
| Add-on covers | More than 10 add-ons such as Zero dep, NCB protect, Roadside assistance, etc. |
| Buying/Renewal Process | Online |
| Personal accident cover | Up to ₹15 lakh |
| Cashless Garages/Repairs | Available |
What are the Types of Car Insurance Policies?
Generally, there are three types of automobile insurance policies offered in India by general insurance companies stand-alone, comprehensive, and third-party auto insurance. You can choose an automobile insurance plan based on your requirements and financial circumstances.
Third-Party Insurance:
Third-party car insurance provides essential coverage for damages caused to others by the insured vehicle. It protects the policyholder from financial liabilities arising due to third-party death, injury, or property damage. While it doesn’t cover the insured vehicle’s damages, it fulfills legal requirements and offers peace of mind on the roads.
Comprehensive Insurance:
Comprehensive car insurance provides extensive coverage against a wide range of risks. It safeguards the policyholder’s vehicle against damages caused by accidents, theft, natural disasters, and vandalism. Additionally, it includes third-party liability coverage for injuries and property damage. This policy offers peace of mind and financial protection for car owners.
Standalone Own Damage:
Standalone own damage only covers harm done to the insured vehicle as a result of accidents, theft, fire, or other risks. It does not contain coverage for third-party obligations, in contrast to comprehensive insurance. It provides specialized protection that is adapted to the policyholder’s needs, making it a reasonably priced choice.
Coverage Under Car Insurance Policy
Included:
- Damages to third parties: When an accident involving the insured vehicle occurs, third-party damages, such as physical harm and property damage, are often covered by auto insurance.
- Own damage protection: Comprehensive insurance plans cover damage to the covered vehicle resulting from theft, fire, natural disasters, accidents, and vandalism.
- Personal accident coverage: Some policies offer protection in the event that the policyholder is injured or killed in an auto accident.
- No Claim Bonus (NCB): As a reward for years without a claim, insurers give NCB, which results in a decrease in the rate at policy renewal.
- Add-on coverage: By choosing extra add-ons like zero depreciation, engine protection, roadside assistance, etc., policyholders can increase coverage.
Not-Included:
- General wear and tear: Car insurance does not cover damages resulting from regular wear and tear, aging, or mechanical breakdowns.
- Drunk driving: Any damages caused while driving under the influence of alcohol or drugs are usually excluded from coverage.
- Unlicensed or underage drivers: If an unauthorized or underage driver causes an accident, the policy may not provide coverage.
- Racing and illegal activities: Damages incurred during racing events or any illegal activities are generally not covered.
- Consequential losses: Car insurance does not cover indirect or consequential losses resulting from an accident, such as loss of personal belongings or business revenue.
How to Calculate Car Insurance Premiums?
- Vehicle Information: The insurer considers the make, model, variant, age, and market value of the car. Generally, expensive and high-performance vehicles attract higher premiums.
- Cubic Capacity (CC) or Engine Size: Cars with higher CC often have higher premiums as they may be considered more powerful and riskier to insure.
- Policy Coverage: The type of policy selected (third-party liability or comprehensive) affects the premium. Comprehensive coverage is more expensive but offers broader protection.
- Insured Declared Value (IDV): It represents the current market value of the car and is used to determine the maximum compensation in case of total loss or theft. The premium is proportional to the IDV.
- No Claim Bonus (NCB): Policyholders receive a discount on the premium for each claim-free year, up to a certain limit. The NCB percentage is deducted from the standard premium.
- Add-on Covers: Additional coverage like zero depreciation, roadside assistance, engine protection, etc., increases the premium amount.
- Location: The geographical location affects the premium due to varying risks associated with different areas, such as accident-prone zones or high-theft regions.
- Policyholder’s Age and Driving Experience: Young and inexperienced drivers may face higher premiums as they are considered riskier to insure.
- Personal Accident Cover: The inclusion of personal accident cover in the policy may add a small amount to the premium.
- Deductibles: If the policyholder opts for voluntary deductibles (out-of-pocket expenses during claims), it may reduce the premium.
Which is the best Car Insurance Company in India?
- New India Assurance: One of the oldest and largest insurance companies in India, offering a wide range of car insurance products.
- ICICI Lombard General Insurance: Known for its customer-centric approach and a variety of insurance plans, including car insurance.
- HDFC ERGO General Insurance: Offers comprehensive car insurance policies with additional add-on covers.
- Bajaj Allianz General Insurance: A popular insurer with a significant presence in the car insurance market.
- Tata AIG General Insurance: Provides various car insurance plans with a focus on customer satisfaction.
- Oriental Insurance: A government-owned insurance company with a long-standing reputation in the market.
- Reliance General Insurance: Offers car insurance policies with a range of features and benefits.
- Bharti AXA General Insurance: Known for its innovative insurance solutions and excellent customer service.
- United India Insurance: Another government-owned insurance company with a significant presence in the car insurance sector.
- SBI General Insurance: A subsidiary of the State Bank of India, offering comprehensive car insurance products.
What are the Benefits of Buying Car Insurance Online?
| Benefits of Buying Car Insurance | Online Purchase | Offline Purchase |
|---|---|---|
| Convenience | Easy and quick process from anywhere with internet access. | May require visiting insurance offices or agents, which can be time-consuming. |
| Comparing Options | Can compare various policies, coverage, and premiums from multiple insurers. | Limited to the options available with a particular agent or office. |
| Cost Savings | Online policies may have lower premiums due to reduced overhead costs. | Offline policies may involve agent commissions, which can increase the premium. |
| Immediate Policy Issuance | Instant policy issuance after completing the online process. | May require additional time for paperwork processing and policy issuance. |
| Access to Information | The easy and quick process from anywhere with internet access. | Information may be limited during face-to-face interactions with agents. |
| Flexibility in Policy Management | Easy to make changes, renewals, and endorsements online. | May require additional paperwork and visits for policy modifications. |
| Customer Reviews and Ratings | Access to customer reviews and ratings to evaluate insurers. | Reliance on personal references and limited access to reviews. |
| Paperless Documentation | Detailed policy information, features, and terms are available online. | Physical documents that may need safekeeping and can be easily misplaced. |
| 24/7 Availability | Can purchase or renew policies at any time of the day or night. | Limited to business hours and agent availability. |
| Prompt Customer Support | Digital policy documents and receipts are accessible anytime. | Support may depend on the agent’s availability and response time. |
Which factors should you consider while selecting Car Insurance Policy?
Selecting the right car insurance policy is crucial to ensure adequate coverage and financial protection. Here are the key factors to consider while choosing a car insurance policy:
- Coverage Type: Choose between comprehensive insurance and third-party liability insurance for the coverage type. While third-party insurance is required, complete coverage offers greater protection against personal losses, theft, and calamities.
- Insured Declared Value (IDV): Check the IDV, which indicates the highest claim amount in the event of a total loss or theft. Select an IDV that accurately represents the current market value of your vehicle.
- Add-on Covers: Examine the various add-ons, such as engine protection, zero depreciation, roadside assistance, etc. Select accessories based on your needs and driving style.
- No Claim Bonus (NCB): Inquire about the NCB benefits. It rewards policyholders with discounts for claim-free years, leading to reduced premiums upon renewal.
- Exclusions: Understand the policy’s exclusions, which are situations not covered by the insurance. Be aware of any limitations or specific conditions that may affect your coverage.
- Premium Cost: Compare premiums from different insurers for the same coverage. Consider the balance between coverage and cost-effectiveness.
- Claim Settlement Ratio: Research the insurer’s claim settlement ratio, which indicates their efficiency in processing and settling claims. Higher ratios suggest better claim settlement experiences.
- Customer Service: Check the reputation and responsiveness of the insurer’s customer service department. When issuing policies and handling claims, excellent customer service is essential.
- Network Garages: Check out the network of cashless garages where you can get your vehicle fixed without having to pay in advance. A larger network guarantees that repair facilities are accessible.
- Terms and Conditions of the Policy: Carefully read and comprehend the terms, conditions, and inclusions of the Policy. If there are any questions, ask the insurer for clarification.
- Discounts and Offers: Find out whether there are any discounts, unique deals, or group plans that could lower your premium.
- Online Reviews and Comments: To evaluate the reputation and level of service provided by the insurer, check out online reviews and comments from previous clients.
- Claim Process: Understand the claim filing process and its simplicity or complexity. An easy and straightforward claim process can be beneficial during emergencies.
- Financial Strength of the Insurer: Consider the financial stability and strength of the insurance company to ensure they can meet claim obligations.
What are the major Differences Between Third Party, Own Damages and Comprehensive Car Insurance?
| Aspect | Third Party Car Insurance | Own Damages Car Insurance | Comprehensive Car Insurance |
|---|---|---|---|
| Coverage | Covers only third-party liability, i.e., damages to others (person/property) caused by your car. | Covers damages to your car due to accidents, fire, theft, natural calamities, etc. | Offers the widest coverage, including both third-party liability and own damages to your car. |
| Mandatory Requirement | Mandatory by law in India. | Not mandatory, but recommended for added protection. | Not mandatory but highly recommended for extensive coverage. |
| Protection for Your Car | Does not provide coverage for damages to your car. | Covers damages to your car but does not include third-party liability. | Provides coverage for damages to your car and third-party liabilities. |
| Premium Cost | Usually the most affordable option due to limited coverage. | Moderate premium due to coverage for own damages. | Higher premium compared to the other two options due to comprehensive coverage. |
| Claim Process | You can only claim for third-party damages caused by your car. | You can claim for damages to your car only. | You can claim for both third-party damages and damages to your car. |
| Add-On Covers Available | No add-on covers available. | Add-ons like zero depreciation, engine protection, etc., can be included. | Various add-on covers can be included for enhanced protection. |
| Recommended for New Vehicles | Suitable for old vehicles with lower market value. | Suitable for new vehicles with moderate to high market value. | Recommended for new vehicles and vehicles with high market value. |
| Comprehensive Coverage for Losses | N/A | N/A | Yes, covers losses due to accidents, theft, fire, natural disasters, etc. |
| Protection against Theft | N/A | Yes, coverage against theft of your vehicle. | Yes, coverage against theft of your vehicle. |
| Protection against Natural Calamities | N/A | Yes, covers damages due to natural disasters like floods, earthquakes. | Yes, covers damages due to natural disasters like floods, earthquakes. |
How to buy Car Insurance Policy Online?
- Visit the website’s homepage and click on the ‘Insurance Products’ dropdown.
- Select ‘Car Insurance’ from the list of options.
- On the Car Insurance page, provide your car details:
- Enter the car name or choose from options like ‘Brand New Car’ or ‘Proceed without a car number.’
- Select your car’s specific details, including model, variant, fuel type, and registration date.
How to Renew Car Insurance Policy Online?
To renew your car insurance, follow these steps:
- Visit the car insurance renewal section on the insurer’s website.
- Provide the necessary details, such as your policy number, mobile number, and date of birth, and submit them.
- Choose the car insurance plan that suits your needs.
- Decide on any additional riders or add-on covers you want to include or exclude from the policy.
How to File Car Insurance Policy Claim Online?
To ensure a successful claim settlement, it is essential to comprehend the procedure for making a car insurance claim. To file a four-wheeler insurance claim that is legitimate, follow these steps:
Step 1: File a claim – Immediately notify your insurance of the accident and submit all pertinent information. Provide visual proof to back up your claims.
Step 2: Car Inspection – A surveyor will evaluate the damage following the filing of the claim. To verify your claim, you must provide the necessary paperwork.
Step 3: Sending the vehicle for repair – After the inspection is complete, you can send your vehicle to a network garage for repairs.
Step 4: Claim Settlement – In the event that you have a cashless claim, the insurer pays the garage directly for the repairs. Pay the bills first and then submit refund claims.
Required Documents for Filing a Car Insurance Policy Claim
The following paperwork is normally required when submitting a claim with your auto insurance:
- Claim Form: A claim form issued by the insurance company that has been properly completed and signed.
- Policy Document: A copy of the policy document proving the validity and validity of your auto insurance coverage.
- Proof of Identity: A valid government-issued photo ID, such as a passport, license, or Aadhar card.
- Vehicle Registration Certificate (RC): A copy of the vehicle’s registration certificate (RC), which serves as proof of ownership and provides information on the insured vehicle.
- Driving License: A valid driver’s license belonging to the person who was operating the insured vehicle at the time of the collision.
- FIR or Police Report: An FIR (First Information Report) or police report is necessary in the event of an accident or theft.
- Accident Details: Information on the accident, including the time, date, and place of the incident, is included in the accident details.
- Photographic Proof: If at all feasible, pictures of the wrecked car and the crash site.
- Repair Cost Estimate: A repair workshop or network garage’s estimate of the cost of repairs.
- Original Repair Bills and Payment Receipts: You will want the original repair bills and payment receipts if you decide to file reimbursement claims.
- Claim Discharge Voucher: A claim discharge voucher must be signed following the settlement of the claim.