- 1 What is Car Insurance?
- 2 How Car Insurance works
- 3 Documents Required
- 4 Key Features of Car Insurance Policy
- 5 Things covered in Car insurance:
- 6 Importance of having Car Insurance
- 7 Types of car insurance
- 8 Things not covered in automobile insurance Policy
- 9 Importance of getting Car Insurance:
- 10 Types of automobile insurance Car insurance in India comes in three major forms
- 11 Why should buy Comprehensive Car Insurance Policy?
- 12 Comprehensive Car Insurance Exclusions:
- 13 Things to Know before you buy Car Insurance:
- 14 The cost of car insurance depends on the following factors
- 15 Best Car Insurance Providers in India (IRDAI Approved)
- 16 Why Should Buy Car Insurance Online?
- 17 How to Renew Car Insurance Online?
- 18 Car Insurance – FAQ
- 18.1 Why do I need to insure my car?
- 18.2 How many times we can claim car insurance annually?
- 18.3 What is bumper to bumper car insurance?
- 18.4 Is it good to claim car insurance for scratches?
- 18.5 Does the premium amount of car insurance depends on the city?
- 18.6 Will my car policy cover electrical fires?
- 18.7 Will car insurance cover flood damage?
- 18.8 Will my car policy cover electrical fires?
- 18.9 Does car insurance get more expensive closer to renewal?
What is Car Insurance?
Car insurance is a policy that covers your car against financial losses that you may have in case of accident or theft of the car. You pay a certain amount as a premium to the insurance company to buy this covert, and they agree to pay for accidental damages and theft losses. As per IRDA (insurance regulatory and development authority), it’s mandatory for any vehicle running on Indian roads to be covered under a lively automobile insurance policy.
Based on the type of policy and add-ons that you opt for, your car insurance may include:
- Liability Cover
- Invoice Cover
- 24*7 Roadside Assistance
- Engine Protector
- No Claim Bonus
- Tire Cover
- Key & Lock Replacement
- Electrical Accessories
- Non-Electrical Accessories
- PA for unnamed passenger
- LL to paid driver
How Car Insurance works
Car Insurance is given to you based on various factors like the brand and model of your car, what kind of driver are you, and your past car insurance history. You may opt only for a third-party cover or a comprehensive car policy based on your need.
The comprehensive policy is a package of different types of features (add-ons) like a liability cover, accident cover, invoice cover, consumables cover, engine cover, etc.
Please note while buying car insurance you are required to choose a deductible which is the amount you are willing to pay against the losses incurred. This amount determines the annual premium you’ll buy your automobile insurance . Higher the deducible, lower the premiums.
The insurance company pays a part of the losses, while the deductible amount chosen by you will be paid for you. For example, if the total expenses you have to bear to get your car repaired after an accident are INR20000/- – Your chosen deductible is INR5000/- then the insurance company will pay INR15000/- and you will pay INR5000/- from your pocket.
While buying a policy, choosing a deductible is an important step as you pay the deductible for each and every situation in which you require your insurance company to cover damages. If you face a grievous situation with your car, simply claim for car insurance and you will be reimbursed as per the eligibility mentioned and add-ons attached with your type of policy.
Eligibility to buy car insurance:
In India, assuming you own a vehicle you are qualified to purchase vehicle protection. Truth be told, it is compulsory to have your vehicle guaranteed the second you become the proprietor. Driving a car without insurance is a legal offense.
The process to buy car insurance:
You can buy your car insurance through the company you bought your car from or directly from a car insurance provider. You can do this offline via a car insurance agent or buy it online by comparing various online options as per your specific needs for car insurance.
The records that you will require assuming you are purchasing the vehicle protection are:
- Current policy document
- In case of renewal or switch Your driver license copy
- Vehicle registration documents
- RC (Registration Certificate)
- Your address proofs
- Cancel Check in case you want the setup EFT (Electronic Fund Transfer)
Key Features of Car Insurance Policy
As per the Indian Motors Vehicle Act, third party insurance is mandatory
On all the vehicles, along with that buying car insurance helps you to remain in compliance with regulations and set your mind free too.
If your car meets with an accident, you can simply bear the expenses without shedding loads of money from your own pocket.
If you cause damage to another person’s car or the driver gets hurt, you can bear the damage or loss of limb by claiming your third-party insurance, which covers hospitalization and legal expenses too.
If your car is damaged due to a flood, fire, or earthquake, your car insurance policy will come in handy to claim for the damages.
Car insurance provides you with cover against theft and vandalism. You can get your hard-earned refund if your car gets stolen.
Even if you do not face any such situation throughout the year, you get a handsome no claim bonus for not filing any car insurance claim. Your next automobile insurance comes cheaper to you. It is very important to buy a car insurance policy.
Things covered in Car insurance:
Add-on is an additional benefit added to your car policy which covers your car against unforeseen expenses. You can buy add-ons, also referred to as riders, by paying an extra premium.
There are various sorts of add-ons offered by insurance companies, but you ought to select the one consistent with your specific requirements.
This is applicable to the owner (if he/she is driving the car) as well as the paid driver. With this add-on in place, the insurance company will pay a lump sum amount as compensation to the driver, if they die or suffer a serious injury in a car accident.
After an accident, some of the car parts need to be changed. Depending on how old the car is, the insurer can pay as per the depreciated value of these spare parts. If you’ve got zero depreciation cover attached to your policy, you get the claim as per the particular value of spare parts, which helps you save tons of money on car repair.
The engine is the most important part of your cat and it is likely to get damaged when you met with an incident like flooding. As a car insurance policy covers the damage caused due to flooding, it helps you to bear the engine or replacement
Return to Invoice Cover:
Usually, your car is valued as per the Insured Declared Value (IDV) or current market value, which is lower than the actual value of the car. If your car gets totally damaged in an accident or gets stolen, the insurance company will pay you the claim as per the IDV. But with this cover, you can get the actual value of your car without deducting the registration charges, road tax, and any depreciation calculated on it.
No Claim Bonus Cover:
If you do not file for any insurance claim throughout the year of your car insurance policy, you get the no claim bonus. This comes in sort of discounts on premiums for your next policies. For example, you get a 20% discount on the premium you pay for your next policy after a claim-free year. This can go up to 50% if you do not claim insurance for 5 continuous years. In case, you’re required to file even one claim in an unforeseen event, your NCB will become zero. But, with NCB covered in your policy, you’ll keep your bonus intact and still claim insurance.
Assistance on Road:
This add-on cover ensures that the insurance firm arranges for your car to be towed away to a garage and obtain your help to succeed in your destination, just in case your car gets broken in a secluded place.
If your car is at a garage for repairs, this cover helps you with cash to rearrange for an alternate mode of transport till you get your car back. It is normally given for a period of 10-15 days and ranges from INR500-INR1000 depending on the model of the car.
Lock and Key Replacement Benefit:
If you lose your key and need to get a replacement key and lock, this add-on can assist you to get the particular cost of it instead of just a limited amount that insurance companies normally offer.
If your car is not older than three years, you can buy this add-on to claim for any money spent on nuts and bolts, screen washers, engine oil, bearings, and other consumable parts, when your car is met with an accident.
Things not covered in Car Insurance Policy:
Your car insurance policy covers you against financial losses that you may incur during an accident or theft. However, there are certain events, which your policy might not cover. Occurrence of loss or damage when the policy has expired or is not active. Normal wear and tear of the car and its part. Usual depreciation on the car. When the driver does not possess a valid driving license. Electrical or mechanical breakdown If the person is found to be driving under the influence of liquor/drugs Damage to the engine due to oil leakage.
Importance of having Car Insurance
- If you own a car then you definitely need car insurance! It is extremely important to stay insured, safe and secure under an adequate automobile insurance policy. This helps you to save lots of on money and tons of mental stress. Here is why it’s vital to possess a automobile insurance .
- As per the Indian motor vehicle act, third party insurance is mandatory on all the vehicles. Not adhering to the present law may result in fines and penalties.
- You can encounter an accident anytime, no matter how careful a driver you are, the damages that you incur during accidents bring down a whole lot of expenses. A comprehensive car insurance policy helps to cover all the expenses for all damages to your car, or to another car in pollution.
- In case of any accident, cost is to be incurred for injuries, loss of life or limb. A third-party car insurance helps to bear the expenses for damages to the other driver’s vehicle as well as provide money for any loss of life or limb along with hospitalization and legal expenses.
- You can drive with utmost safety and never met with an accident, But, if the car is damaged due to flood, fire or earthquake, there is little you can do about it. It is better to have a car insurance policy to have such damages reimbursed.
- With increasing crime rates, you need to be safe and secure. Car insurance provides you protect instances involving theft and physical damages thanks to vandalism. If your car is insured, you get the worth and are saved from great losses.
Types of car insurance
Car insurance in India comes in three major forms.
Liability Cover – In case you are liable for an accident and damages to someone else’s vehicle, this type of insurance comes in force. It is mandatory by law to have third-party insurance cover the cost of repairs for any third-party property damaged by an accident as well as the medical bills for the other person from resulting injuries. This cover is mandatory for all cars.
Collision Cover – In case you met with an accident and your car is damaged severely, this cover helps to bear the repair expenses. Also, if the damages are such that the repair expenses are exceeding the total value of the car, the collision cover pays the value of the car. This cover is vital for expensive high-end cars.
Comprehensive Cover – This type of automobile insurance covers all kinds of damages under all unfortunate situations you’ll face together with your car. It covers accidental damages, medical expenses to self et al. , and also, damages thanks to the weather, natural calamities, car theft, and vandalism, which aren’t covered in the other two insurances are covered in comprehensive coverage. It is not compulsory by law to possess comprehensive coverage, but if it suits your budget, it’s one of the foremost important insurance policies to possess in your pocket if you are a regular driver.
Return to Invoice Cover – Usually, your car is valued as per the Insured Declared Value (IDV) or current market value, which is lower than the actual value of the car. If your car gets totally damaged in an accident or gets stolen, the insurance underwriter can pay you the claim as per the IDV. But with this cover, you’ll be able to get the actual value of your car without deducting the registration charges, road tax, and any depreciation calculated on that.
Claim Bonus – No Claim Bonus Cover If you are doing not file for any claim throughout the year of your automobile insurance policy, you get the no claim bonus. This comes in kind of discounts on premiums for your next policies. as an example, you get a 20% discount on the premium you obtain for your next policy after a claim-free year. this will go up to 50% if you are doing not claiming insurance for five continuous years. In case, you’re required to file even one claim in an unforeseen event, your NCB will become zero. But, with NCB covered in your policy, you’ll keep your bonus intact and still claim insurance.
Assistance on Road – This add-on cover ensures that the underwriter arranges for your car to be towed away to a garage and acquire your help to succeed in your destination, just in case your car gets tamed to a secluded place.
Daily Allowance – If your car is at a garage for repairs, this cover helps you with cash to rearrange for an alternate mode of transport till you get your car back. it’s normally given for a period of 10-15 days and ranges from INR500-INR1000 betting on the model of the car.
Lock and Key Replacement Benefit – If you lose your key and need to get a brand new key and lock, this add-on can facilitate your getting the particular cost of it instead of just a limited amount that insurance companies normally offer.
Consumable Cover – If your car isn’t older than three years, you’ll buy this add-on to say for any money spent on nuts and bolts, screen washers, engine oil, bearings, and other consumable parts, when your car met with an accident.
Things not covered in automobile insurance Policy
- Your insurance policy covers you against financial losses that you just may incur during an accident or theft. However, there are certain events, which your policy might not cover.
- Occurrence of loss or damage when the policy has expired or is not active.
- Normal wear and tear of the car and its part. Usual depreciation on the car.
- When the driving force doesn’t possess a sound license.
- Electrical or mechanical breakdown
- If the person is found to be driving under the influence of liquor/drugs
- Damage to engine thanks to oil leakage.
Importance of getting Car Insurance:
- If you own a car then you actually need a car insurance! It is extremely important to stay insured, safe and secure under an adequate automobile insurance policy. This helps you to save lots of on money and plenty of mental stress. Here is why it’s vital to own a insurance.
- As per the Indian motorized vehicle act, third party insurance is mandatory on all the vehicles. Not adhering to the present law may end up in fines and penalties.
- you’ll encounter an accident anytime, regardless of how careful a driver you’re, the damages that you simply incur during accidents bring down an entire lot of expenses. A comprehensive automobile insurance policy helps to hide all the expenses for all damages to your car, or to a different car in pollution.
- Just in case of any accident, cost is to be incurred for injuries, loss of life or limb. A third-party automobile insurance helps in grips the expenses for damages to the opposite driver’s vehicle furthermore as provide money for any loss of life or limb together with hospitalization and legal expenses.
- you’ll be able to drive with utmost safety and never met with an accident, But, if the car is broken thanks to flood, fire or earthquake, there’s little you’ll do about it. it’s better to possess a insurance policy to own such damages reimbursed.
- With increasing crime rates, you wish to be safe and secure. insurance provides you protect instances involving theft and physical damages thanks to vandalism. If your car is insured, you get the worth and are saved from great losses.
Types of automobile insurance Car insurance in India comes in three major forms
- Liability Cover In case you’re accountable for an accident and damages to someone else’s vehicle, this sort of insurance comes operative. it’s mandatory by law to own a third-party insurance cover the price of repairs for any third party property damaged by an accident additionally because the medical bills for the opposite person from resulting injuries. This cover is mandatory for all cars.
- Collision Cover In case you met with an accident and your car is broken severely, this cover helps in-tuned the repair expenses. Also, if the damages are specified the repair expenses are exceeding the entire value of the car, the collision cover pays the worth of the car. This cover is very important for expensive high-end cars.
- Comprehensive Cover This type of automobile insurance covers every kind of damages under all unfortunate situations you’ll face along with your car. It covers accidental damages, medical expenses to self et al. and also, damages thanks to weather, natural calamities, car theft, and vandalism, which aren’t covered in other two insurances are covered in comprehensive coverage. It’s not compulsory by law to own comprehensive coverage, but if it suits your budget, it’s one among the foremost important insurance policies to own in your pocket if you’re regular driver. It can further be enhanced by adding on the riders like NCB (No Claim Bonus), accessories cover, invoice cover etc.
Why should buy Comprehensive Car Insurance Policy?
Purchasing a comprehensive policy for your car is the most comprehensive form of protection you can get. Despite the law not requiring it, comprehensive insurance is always a wise decision. If you have a comprehensive insurance plan, you can rest assured that any loss resulting from an accident will be covered.
Here are some basic features of comprehensive auto insurance:
- Even if you are at fault, the insurance protects you from accidents.
- Even natural disasters cannot cause any damage to the vehicle with its comprehensive coverage.
- In addition to comprehensive insurance, there are supplemental options such as engine protection and zero depreciation.
- There is no additional premium for third-party liability coverage.
Comprehensive Car Insurance Exclusions:
- Vehicle aging, wear and tear
- The liability of the company is limited to 50% of the replacement cost for tyres and tubes if the vehicle is also damaged.
- If car is damaged and the driver has not valid driver license.
- If driver met with an accident under the influence of drugs or alcohol.
- If loss or damaged caused by nuclear/war. Standalone OD Car Insurance vs Third-Party Insurance vs Comprehensive Car Insurance Standalone
- OD Car Insurance: Unlike standalone full coverage car insurance, standalone own-damage car insurance specifically covers the damages and losses caused by your own vehicle. This includes damages and losses resulting from accidents, collisions, natural disasters, fires, and theft.
- Third-Party Insurance: The third-party insurance protects the insured vehicle from causing damage to a third-party. It covers physical injuries, damages to the vehicle, damage to property, and death. An accident caused by drunk driving will not qualify for compensation under third-party insurance
- Comprehensive Insurance: Comprehensive automotive insurance generally covers damage resulting from accidents, fire, natural disasters, theft, etc. Comprehensive auto insurance also covers third-party liability. Working of Car Insurance Insurance is a contract between the owner of a car and an insurance company. In this contract, the owner pays for the car and the insurance company covers any loss or damage. No matter if it is a commercial vehicle or a personal car, car insurance is mandatory in India. India’s biggest insurance companies are partnered with car manufacturers and offer instant quotes to car owners.
- Claiming of Car Insurance: The following information describes how to make a claim if your car has been involved in an accident or in any other legitimate incident. If the driver or the passenger is involved in an accident with another vehicle, they should note down the number plate of the other car as soon as possible and call their insurance company right away in order to make a claim. Be sure to write down the claim reference number once you have filed your claim with the company. Submit the proper documents to the insurance company in order to make the claim.
- Register a complaint at the police station nearest you.
Things to Know before you buy Car Insurance:
- It is a wise decision to buy comprehensive car insurance in India. Furthermore, it prevents you from incurring costs for car repairs while ensuring you follow the law. Since it has been around for so long, buying car insurance has become easier and more convenient. On the insurer’s website or app, you can purchase car insurance within 3-4 minutes. It is important to note a few things when insuring your car.
- When purchasing a new vehicle, the dealer typically only offers third-party insurance. In addition to its basic nature, third-party car insurance protects only against the damages to another person’s property or assets, as well as against bodily injury or death. Regardless of whether you are driving, a family member is driving, or someone is hired to drive, a third-party policy will only cover claims for the events that caused the third-party to suffer damage. Unfortunately, as per the terms of your third-party policy, you are not covered for vehicle damages.
- You should check if comprehensive coverage is included in the policy when comparing car insurance online. The benefits offered by comprehensive car insurance cover are broader than those from third-party coverage. It provides third-party liability insurance as well as self-inflicted damage coverage. As well as providing coverage against natural and man-made disasters like fire, theft, riots, rain, and storms, a comprehensive insurance policy provides protection from man-made and natural disasters.
- The comprehensive insurance premium for your car is more expensive than the third-party insurance premium, but considering the benefits it offers, it will be worth every penny of the price.
- If your car gets damaged beyond repair or if it is stolen, the insurance company will pay the insured declared value. You should not mistake the IDV for the resale value of your car; it is simply the maximum value of the car (determined by the insurer) that you will get paid in the case of a total loss of the vehicle.
- Depending on your insurance company, your IDV may be different. It is crucial that you evaluate the current market value of the car before you check the IDV of the car. You should compare car insurance policies online to find an insurer that offers an IDV that is closest to the market value of the vehicle you intend to insure.
- People tend to choose a car insurance company that offers the lowest premium, but you must avoid this mistake. In addition to the quality of the services offered, you must also take into account the reputation of the insurer.
- All your queries and service requests will be promptly handled by a reputable insurance company. The best way to understand the quality of a service is to check the reviews by past users. How is car insurance premium calculated? In our insurance policies, we always know what the fine print is- Terms and Conditions, Exclusions, Special Cases, but we also know the premium] upfront. Most of the time, however, we simply hear a number, not really understanding how it came to be, nor what the process of calculation entails.
The cost of car insurance depends on the following factors
IDV (Insured Declared Value) of the vehicle type and age of the vehicle Cubic Capacity of the engine Zone
Car Insurance Premium is the sum of 3 covers i.e., Third Party Insurance, Own Damage (OD) Cover, and Personal Accident Cover.
Formula to calculate IDV is:
IDV = Showroom price of your car + cost of accessories (if any) – depreciation value as per (IRDAI)
Thus, formula to calculate OD premium amount is:
Own Damage premium = IDV X [Premium Rate (decided by insurer)] + [Add-Ons (e.g., bonus coverage)] – [Discount & benefits (no claim bonus, theft discount, etc.)]
Best Car Insurance Providers in India (IRDAI Approved)
|TOP CAR INSURANCE COMPANIES||CASHLESS GARAGES NETWORK||INCURRED CLAIM RATIO 2019-2020 (%)|
|Bajaj Allianz Car insurance||4000+||88.83|
|Bharti axa Car insurance||5200+||87.99|
|Cholamandalam Car insurance||6900+||85.89|
|Digit Car Insurance||1400+||87|
|Edelweiss Car Insurance||1000+||116.31|
|Future Generali Car Insurance||2500+||88.69|
|HDFC ERGO Car Insurance||6800+||91.23|
|IFFCO Tokio Car Insurance||4300+||95.30|
|Kotak Mahindra Car Insurance||1000+||82.81|
|Liberty Car Insurance||4300+||87.48|
|National Car Insurance||NA||85.71|
|New India Assurance Car Insurance||1100+||89.60|
|Oriental Car Insurance||NA||101.63|
|Universal Sompo Car Insurance||NA||90.78|
|Reliance Car Insurance||3700+||84.26|
|Royal Sundaram Car Insurance||4600+||92.66|
|SBI Car Insurance||5400+||89.51|
|Shriram Car Insurance||1500+||65.43%|
|Tata AIG Car Insurance||NA||90.49|
|United India Car Insurance||700+||82.93|
|Raheja QBE Car Insurance||1000+||103.90|
Why Should Buy Car Insurance Online?
- There is no appeal to filling out lengthy forms and providing a number of documents to purchase insurance offline. By switching to online auto insurance, consumers can eliminate this hassle by just providing basic information to receive a quote
- A major advantage of purchasing insurance online is the freedom from time constraints. You can complete the entire buying process in a few minutes, and you can make a purchase whenever you like. On the other hand, the offline process is time-consuming since the customer must visit the insurance company’s branch office or meet with a representative in person to buy a policy.
- A web aggregator site simplifies the entire process of comparing and choosing insurance policies, making it easy for consumers. On the insurers’ websites, car insurance calculators are also available so you can examine policies individually. As an alternative, this can typically be accomplished by going to different branch offices and comparing different policies manually, a tedious and inconvenient exercise.
- Low prices: “Online insurance has lower operational costs than offline insurance since digital insurers are not required to maintain physical sales offices. Manpower requirements are also reduced. As a result of fewer operational costs, policies are priced lower, without compromising coverage,”
How to Renew Car Insurance Online?
- Visit the insurance provider website and choose renew the policy.
- Enter the details, include/ exclude the add on covers and complete the journey by paying the premium online.
- The renewed policy are going to be mailed to your registered email id.
- How to Renew Old Car Insurance?
- It is essential to have car insurance, regardless of the type of car (new, old, or second-hand), and to invest in a proper plan every year.
- In accordance with the Motor Vehicles Act of 1988, every vehicle owner, regardless of whether they own a used, damaged or old automobile, must obtain valid insurance to drive on Indian roads, failing to which they can face heavy penalties and the suspension of their driver’s license.
- Comprehensive car insurance can be purchased very easily and protects the vehicle from any natural or artificial disaster. In addition, it protects you financially in case a third party damages your vehicle or property. A personal accident coverage is included that compensates the insured with 15 lakhs in case of an accident.
Car Insurance – FAQ
Why do I need to insure my car?
Imagine you, unfortunately, met with an accident and can’t afford the damage, claiming the car insurance will be an ease to you for affording the damage. It is good to insure your car and wise choice.
How many times we can claim car insurance annually?
There are no restrictions to claim car insurance in a year.
What is bumper to bumper car insurance?
The bumper-to-bumper program is a comprehensive insurance policy that covers 100% of the damages that happen to the fibres, metals, and rubber components of your car.
Is it good to claim car insurance for scratches?
It is not advised to claim car insurance for small dents and scratches as they are affordable and claiming it only will losses your No Claim Bonus.
Does the premium amount of car insurance depends on the city?
Your auto insurance premium is affected by the city where your vehicle is registered.
Will my car policy cover electrical fires?
Yes if you have comprehensive car insurance then your policy will cover any fire caused damage.
Will car insurance cover flood damage?
Yes if you have comprehensive car insurance then your policy has flood damage cover.
Will my car policy cover electrical fires?
Insurance policy doesn’t cover pre-existing damages on your car.’
Does car insurance get more expensive closer to renewal?
Insurance companies sometimes raise their car insurance renewal prices closer to the date of the renewal