Car insurance provides financial protection to policyholders against accidents, theft, total loss, natural disasters, man-made disasters, fire and death or damage to property by third parties. A motor insurance policy is mandatory in India for all four-wheelers under the Motor Vehicles Act, 1988.

What is Car Insurance?

Car insurance, also known as vehicle insurance or car insurance, provides financial protection to you and your four-wheeler against any loss or damage due to accidents, theft, fire, disasters and third party person or property. The main types of car insurance covers include third party car insurance, independent damage (OD) car insurance and comprehensive car insurance.

The insured can also purchase Personal Accident Cover to cover both third party liability cover and own damage cover. Make sure you are the registered owner of the car and have a valid driving license to avail the cover of Rs. 15 lakhs.

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*
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 Avilable

Types of Car Insurance Policies

In India, there are three types of car insurance policies offered by general insurance companies, i.e. third party car insurance, comprehensive insurance and independent insurance. You can choose a car insurance plan according to your budget and needs.

  • Third party car insurance

  • Third party or liability only policy is mandatory for all car owners to drive on Indian roads. Compensation is provided for damage/injury caused to a third person and property (up to Rs 7.5 lakh). However, it does not cover damage caused to the insured car. Therefore, it is recommended to buy a comprehensive or independent motor policy.

  • Comprehensive car insurance

  • A comprehensive car insurance policy covers both third party liability and own damage. Under this plan, the insured person can avail cashless repair services at network garages. Additionally, the policyholder can enhance the policy coverage with additional benefits or riders such as roadside assistance coverage, no depreciation coverage, etc. the payment of a nominal additional premium amount.

  • Independent damage

  • An independent own damage car policy financially covers accidental damage caused to the insured car. Can be purchased with an active third party insurance policy. In India, under the Motor Vehicles Act, it is mandatory to carry at least one third party liability cover for all car owners. However, independent insurance provides financial assistance in case of own damage to the insured car and liabilities to third parties.

Coverage Under Car Insurance Policy

Inclusion

  • Damage caused to the insured vehicle as a result of man-made actions such as riots, strikes, terrorist acts, etc.
  • Any third party injuries such as third party death, disability and property damage are covered
  • Losses due to theft, burglary or theft of the insured car
  • Damage caused by the insured car due to natural acts such as earthquakes, hurricanes, cyclones, etc.
  • Damage caused to the insured car while it was in transit via railways, roads, waterways etc.

Exclusion

  • Damage caused to the insured vehicle when the driver was driving under the influence of alcohol or drugs
  • Damage to the insured vehicle when the driver did not have a valid driving licence
  • Damage due to commercial uses of a private vehicle is also excluded.
  • Losses arising from any contractual liability of the owner/manager
  • Any claim cannot be raised if your existing four-wheeler policy has lapsed
  • Mechanical or electrical fault of the insured vehicle
  • Any damage arising from the specified geographical limits is also excluded from the policy cover
  • Damage to the engine, tires and tubes of the insured vehicle is also not covered.

Add-On Covers in Car Insurance Policy

Car insurance add-ons are covers that can be used to enhance the cover of your existing policy. You can purchase these add-ons by paying an additional price. Below are some of the additional covers offered under car insurance - No Claims Bonus Protection Cover, Zero Depreciation Cover, Engine Protection Cover, Key Protection Cover, etc.

Let's discuss Car Insurance add-ons in more detail:

  • No Claim Bonus Protective Cover

  • For each claim-free year, the policyholder is rewarded with a discount on the renewal premium. This deduction is called - No Claim Bonus (NCB). It is cumulative and increases every year. This usually ranges from 10% to 50% and can save you a significant amount of money on your car insurance premium.

  • Engine protective casing

  • An engine is one of the most important parts of a car, but it is not covered by a comprehensive plan. With a protective engine cover, you can be reimbursed for the cost of fixing indirect damage caused to the engine due to leaking lubricating oil and water ingress. It covers gearbox parts, engine parts and differential parts.

  • No depreciation coverage

  • This additional feature also provides compensation for the depreciation of your car. With this feature, you don't have to pay for the depreciation of your vehicle parts. It is mainly valid for private cars and is subject to a specific number of claims during the policy period. Mandatory and voluntary discounts (as applicable) will apply regardless of zero depreciation cover.

How to Calculate Car Insurance Premium?

The price of car insurance is determined based on several factors. It's also easy to find out your four-wheeler insurance premium with an online car insurance calculator. However, the insurance provider takes into account the following parameters before determining the car insurance price:

  • Type of coverage - Your standard motor policy premium is determined based on the type of coverage you choose for your four-wheeler. Basically, third party insurance carries the lowest premium as it only covers third party damage. The premium becomes higher if you add your own damage cover or buy comprehensive four-wheeler insurance.
  • Personal accident cover - Personal accident cover is available on both third party and comprehensive car insurance policies. The cover limit is up to Rs. 15 lakh and can be purchased by paying a nominal additional premium.
  • Insured Declared Value - IDV, which is the current market value of the car. This is the maximum amount for which the policyholder can make a claim during the policy term. The higher the value of the car means the higher the IDV and vice versa.

Factors to Consider While Selecting Car Insurance Policy

While choosing a car insurance policy, there are many factors like extent of policy coverage, claims settlement ratio, cashless repairs, etc. which can help you choose the right policy. Some of them are listed below –

Scope of Insurance Coverage

  • Third party insurance is a mandatory cover that every car owner must purchase. However, if you are looking for extended coverage, it is recommended to opt for comprehensive coverage. Also, check all the inclusions and exclusions of the car insurance policy before you buy it.

Compare car insurance online
  • You can compare different car insurance plans online and choose the one that meets all your requirements. You can compare plans based on premium, IDV, network garages, claim settlement ratio, customer care services, etc.

Claims report and resolution process

  • The claims settlement ratio shows the number of claims settled by the insurer against the total number of claims submitted by the customer. Hence, checking the report online will help you determine the insurer's ability to settle the claim.

Network garages

  • Before taking advantage of the services provided by the insured, check the number of cashless network garages registered in the area where you live. This will expand the scope of using the cashless facility without paying money from your pocket.

Additional coverage

  • Insurance companies offer additional coverages with the comprehensive insurance policy to increase the policy coverage and maximize the policy benefits. Depending on your requirement and budget, you can choose add-ons with your plan.

Customer service

  • 24x7 customer support is one of the essential factors to look at when choosing an insurance company. This will help you to resolve your queries and claims at your convenience.

IDV

  • Based on the market value of the insured car, IDV is calculated.  with routine wear and tear, the car's market value decreases. Therefore, the newer the car, the higher the market value will be and vice versa. The newer a car is, the higher its value, as well as the insurance amount and premium. But a new car is less susceptible to risks, whereas if your car is old, the insurer will carry out an inspection before insuring it.

Premium

  • The car policy premium will vary according to your car's IDV, make, model, fuel type and also the policy stance you choose. The premium for two insurers for the same coverage benefits may also differ. Therefore, it makes sense to compare and choose the best one.

How to Buy Car Insurance Online?

To buy a car insurance policy online from Policybazaar.com, follow the steps below:

  • Visit the Car Insurance page from the Insurance Products drop-down menu on the home page
  • Enter the car name or select any of the other two options of 'New car' or 'Continue without car number'
  • Select your car details such as model, variant, fuel type and registration date

Benefits of Car Insurance Renewal Online

New car insurance has a validity period after which it must be renewed. So, to continue to get coverage from your existing car policy, you need to renew your car insurance online before the expiry date. Here are some important benefits of online car insurance renewal-

Easy comparison

  • When you renew your car insurance online, you can easily compare plans offered by various insurers. It will also help you understand the additional services the plan offers, such as a free upload and download device, 3-day repair assistance, no-money-down insurance and self-video claims.

Easy fit

  • You can easily change your car insurance policy coverage during renewal by adding or removing additional coverages. However, before matching your policy with an additional cover, remember that your car premium depends on it.

Easy to change insurer

  • If you are not satisfied with your current insurer or want to improve your cover benefits, you can switch to another insurer at the time of renewal. Moreover, if you find another insurer that offers better features and services at a price that suits your pocket, then you can do it from the comfort of your home.

Safe and transparent

  • Secure payment gateways make renewing a car insurance policy a secure and transparent process. Premium payment can be done easily using credit cards/debit cards/and UPI.

How to Renew Car Insurance Online?

Renewing car insurance online is an easy process and can be done in a few simple steps. Follow these steps for online renewal of your four wheeler insurance policy from Policybazaar Insurance Brokers Private Limited:

  • Go to the car insurance renewal section.
  • Enter the required details on the page like your policy number, mobile number, date of birth etc. and deliver them
  • Select the four wheeler insurance plan you want to buy
  • Select the additional riders or caps you wish to purchase or discard (if any)

How to File a Car Insurance Claim?

Understanding the proper steps to file an auto insurance claim is critical, as your insurer may reject your claim for many reasons. So make sure you understand what needs to be done when filing a car insurance claim. Follow the steps mentioned below to easily file a valid four wheeler insurance claim:


Step 1: File a claim – Share the details of the accident with your insurer immediately after the accident occurs. Be sure to properly document and share photographic evidence to support your case.

Step 2: Inspect the car – After the claim is registered, the insurer will send a surveyor to investigate the claimed damage. You will be required to submit certain documents to the surveyor for the claim verification process. Make sure you keep them handy.

Step 3: Send the car for repair - Once the inspection is complete, you can send the car to a network garage for repairs.

Step 4: Claim settlement – If you have a cashless claim settlement, the insurer will settle the repair bills directly with the network garage. However, if you have selected refund requests, you will first be asked to pay the invoices and then make a refund request.

Documents Required for Filing a Car Insurance Claim

Whether it is a theft claim, an accident claim or a third party claim, the insurance company requires a number of documents to be submitted. Below is the list of various documents that you will need while registering a claim under your four wheeler insurance:
  • Duly filled and signed claim form
  • KYC
  • Copy of car insurance policy
  • Copy of vehicle RC
  • License copy of the driver driving the vehicle at the time of the accident.
  • Copy of Police FIR in case of theft claims
  • Original repair bills and payment receipts
  • Estimated repair bills