In the bustling streets of India, the rhythm of life pulses through the constant flow of traffic. For many of you, owning a car isn't just a convenience but a necessity. With this necessity comes a responsibility - safeguarding your car against the unforeseen. This is where you need a suitable car insurance plan.
Car insurance is not just a legal requirement but a shield against the uncertainties of the road. However, not everyone knows about the fine print of new car insurance policies. Too often, individuals rush through purchasing car insurance online or offline without fully comprehending the nuances of their policies. They fail to realize that understanding the details of their car insurance plan is as crucial as the vehicle itself.
From coverage limits to deductibles, add-on features, and claim procedures, each aspect plays a pivotal role in determining the extent of protection and financial security one can derive from their policy. Here, we aim to bridge the gap between confusion and clarity, helping you understand car insurance policies in India.
What is Car Insurance?
Car insurance is a contractual agreement between an individual (the policyholder) and a motor insurance company, wherein the insurer assumes financial responsibility for specified losses/damages incurred by the insured car in exchange for the premium the policyholder pays. This type of insurance serves as a vital financial safeguard against various risks associated with owning and operating a vehicle.
In India, car insurance typically encompasses two primary types of coverage: third-party liability coverage, which is mandated by law and comprehensive coverage, which offers a broader scope of protection. Understanding the intricacies of car insurance can help you make informed decisions regarding your car insurance needs and ensure adequate protection for yourself and your car on the road.
What are the Key Features of a Car Insurance Policy?
The following table covers some of the most common features of a base car insurance policy:
| Feature | Description |
|---|---|
| Third-Party Liability Coverage |
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| Comprehensive Coverage |
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| Add-On Covers |
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| No Claim Bonus (NCB) |
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| Deductibles |
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| Purchase/Renewal Process | Both online and offline |
| Cashless claims/repairs | Available as per policy terms |
Why Should You Buy Comprehensive Car Insurance?
Comprehensive car insurance offers a wide-ranging coverage scope beyond mandatory third-party liability insurance. Here are several compelling reasons why purchasing comprehensive car insurance makes sense:
Protection Against Various Risks
Comprehensive insurance safeguards your vehicle against a multitude of risks, including accidents, theft, vandalism, and natural disasters such as floods, storms, earthquakes, or fire damage. This level of protection ensures financial security in the face of unforeseen events that could otherwise lead to significant financial losses.
Coverage for Own Damage
Unlike third-party insurance, comprehensive coverage extends to damages sustained by the insured vehicle itself. Comprehensive insurance covers all such damages, whether it's repairs resulting from a collision, replacement costs due to theft, or repair expenses incurred from natural calamities.
Peace of Mind
With comprehensive car insurance, you can drive with confidence, knowing that your vehicle is protected against a wide range of risks. The resulting peace of mind allows you to focus on the road ahead without worrying about potential financial burdens in case of accidents or mishaps.
Customizable Add-Ons
Comprehensive car insurance policies allow you to customize coverage through add-on features. You can include these add-ons as per your specific needs and preferences and enhance the overall protection.
Financial Security
Buying a car is a significant investment, and protecting it against unforeseen risks is essential to safeguarding your financial interests. Comprehensive insurance ensures that your investment remains protected from various perils, minimizing the financial impact of potential damages or losses.
What are the Types of Car Insurance Policies?
The following table represents a comparison of the main types of car insurance policies available in India:
| Car Insurance Policy Type | Description |
|---|---|
| Third-Party Insurance |
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| Comprehensive Insurance |
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| Stand-Alone Own Damage |
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Third-Party Vs. Comprehensive Car Insurance Comparison
Here is a comparison between third-party and comprehensive car insurance policies:
| Parameter | Third-Party Insurance | Comprehensive Insurance |
|---|---|---|
| Coverage |
|
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| Mandatory Requirement |
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Optional but highly recommended for comprehensive protection against various risks. |
| Financial Protection | Provides financial protection against legal liabilities arising from third-party claims | Offers extensive financial protection by covering damages to the insured vehicle |
| Add-On Covers | Generally does not offer add-on covers | Can be customized with add-on covers for enhanced protection |
| Premium | Generally lower premiums compared to comprehensive insurance due to limited coverage | Higher premiums compared to third-party insurance due to broader coverage and additional benefits |
| Suitability | Suitable for individuals seeking basic coverage to comply with legal requirements and protect against third-party liabilities | Ideal for individuals who want comprehensive protection for their vehicle |
Online or Offline Car Insurance Purchase: Which Way to Go?
Below is a comparison between purchasing car insurance online and offline:
| Comparison Parameter | Online Car Insurance Purchase | Offline Car Insurance Purchase |
|---|---|---|
| Convenience |
|
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| Cost Savings | Often offers lower premiums (exclusive online discounts may be available) | May involve higher premiums as agent commissions add to costs |
| Transparency |
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| Documentation and Processing |
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| Customer Support |
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| Comparison and Selection Ease |
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Top 10 Car Insurance Companies in India
The table given below lists the top car insurance companies based on their ICR or Incurred Claim Ratio:
| Car insurance companies | ICR (2022-23) |
|---|---|
| Navi General Insurance Ltd. | 136.77 |
| National Insurance Co. Ltd. | 108.81 |
| The Oriental Insurance Co. Ltd. | 106.66 |
| United India Insurance Co. Ltd. | 103.43 |
| The New India Assurance Co. Ltd. | 97.52 |
| SBI General Insurance Co. Ltd. | 89.97 |
| ACKO General Insurance Ltd. | 86.94 |
| Universal Sompo General Insurance Co. Ltd. | 83.46 |
| IFFCO TOKIO General Insurance Co. Ltd. | 83.34 |
| Raheja QBE General Insurance Co. Ltd. | 83.02 |
**The data mentioned above is taken from the IRDAI Annual Report 2022-23. The numbers may change over time.
What are the Most Common Car Insurance Add-Ons?
Car insurance add-ons, also known as riders, provide additional coverage options beyond the standard policy. Here are some of the most common add-ons offered by car insurance providers:
| Add-On | Description |
|---|---|
| Zero Depreciation Cover | Compensates for the entire cost of repairing or replacing damaged car parts without factoring in depreciation |
| Roadside Assistance | Provides emergency assistance services such as towing, fuel delivery, battery jump-start, flat tire assistance, and locksmith services (as per add-on terms) |
| Engine Protection Cover | Offers coverage for damages to the engine and its components due to accidents, lubricating oil leakage, etc |
| No Claim Bonus (NCB) Protection | Preserves accumulated NCB benefits even after making a claim during the policy term, thereby retaining the discount on renewal premiums |
| Personal Accident Cover for Passengers | Provides coverage for medical expenses and compensation in case of bodily injuries or death sustained by passengers traveling in the insured vehicle during an accident |
| Consumables Cover | Covers the cost of consumable items such as engine oil, coolant, nuts, bolts, etc., during repairs following an accident |
| Key Replacement Cover | Covers the cost of replacing lost, stolen, or damaged keys of the insured vehicle |
| Return to Invoice (RTI) Cover | Ensures that the policyholder receives the original invoice value of the insured vehicle in case of total loss or theft |
Which Factors Affect Car Insurance Premium?
Several factors influence the premium for car insurance, including the following:
Vehicle Type and Model
The make, model, age, engine capacity, and value of the vehicle significantly impact insurance premiums. Generally, high-value or luxury cars attract higher premiums due to higher repair/replacement costs.
Insured Declared Value (IDV)
The IDV represents the current value of the insured car and serves as the maximum sum insured under the policy. Higher IDV leads to higher premiums, reflecting the increased risk exposure for the insurer.
Age of the Insured
Age is a crucial determinant of insurance premiums, with younger drivers typically facing higher premiums due to their perceived higher risk of accidents. Conversely, older, more experienced drivers may enjoy lower premiums.
Driving History and Experience
The driving record of the policyholder, including past accidents, traffic violations, and claims history, directly impacts insurance premiums. A clean driving record with no violations or accidents may result in lower premiums.
Location and Usage
The area where the vehicle is primarily used and parked influences premiums. Urban areas with higher traffic congestion and crime rates may have higher premiums compared to other areas. Additionally, vehicles used for commercial purposes generally attract higher premiums.
Coverage and Deductibles
The type and extent of coverage selected, along with the deductible chosen by the policyholder, affect premiums. Comprehensive coverage with lower deductibles typically results in higher premiums compared to basic coverage with higher deductibles.
Add-On Covers
Opting for additional add-on covers to enhance protection increases the overall premium amount. The cost of add-ons varies depending on the coverage provided and the insurer's pricing strategy.
NCB
NCB forms the discount on the premium charged to policyholders for every claim-free year. Accumulated NCB can lead to significant discounts on renewal premiums, reducing the overall insurance cost.
Policy Tenure and Renewal
Longer policy tenures and timely renewals may attract discounts or incentives from insurers, encouraging policyholders to maintain continuous coverage.
What are the Steps to Calculate Car Insurance Online?
Calculating car insurance premiums online has become increasingly convenient with the availability of online insurance calculators on insurers’ official websites and comparison portals.
You can follow the general steps given below to calculate car insurance premiums online:
Collect relevant information about the vehicle to be insured, including its make, model, variant, fuel type, etc.
Assess your car insurance needs based on the type of coverage desired (third-party or comprehensive), add-on covers required, and the desired IDV for the vehicle.
Access the website of the preferred insurance company or visit a reputable insurance aggregator portal.
Locate the car insurance calculator tool and input the required information about the vehicle into the online calculator.
Select the type of coverage desired (e.g., third-party liability, comprehensive) and choose any additional add-on covers.
Enter personal details such as your name, age, address, and contact information as requested by the online calculator.
Once you have entered all necessary information, the online calculator will generate a premium quote. Review the quote carefully to ensure the coverage and add-ons meet your requirements.
Using a comparison portal, consider comparing quotes from multiple insurance companies to find the most competitive premium rates and coverage options that suit your needs and budget.
Lastly, you can proceed with the online purchase process after selecting a suitable insurance policy based on the calculated premium quote.
How to Reduce Car Insurance Premium?
Here are some tips you can follow to minimize the premium payable for car insurance:
Compare Quotes
You must compare quotes from multiple insurers to find the most competitive premium rates. Utilize online comparison tools or seek assistance from RenewBuy insurance partners to explore different options and select a policy that offers the best value for your needs.
Opt for Higher Deductibles
This means you'll pay more out of pocket in case of a claim, but it can significantly lower your insurance premium. Assess your financial situation to determine the appropriate deductible level that balances savings with affordability.
Utilize NCB
NCB rewards policyholders with discounts on renewal premiums for every claim-free year, leading to significant savings over time. Accumulate and retain your NCB by avoiding claims for minor damages, which can be used to reduce renewal premiums.
Install Safety and Security Devices
Installing anti-theft devices, GPS trackers, or other safety features in your vehicle can reduce the risk of theft or damage, leading to lower insurance premiums.
Bundle Policies
If you have multiple insurance policies (such as car, health, or life insurance), consider bundling them with the same insurer or insurance aggregator. Insurers may offer discounts for bundling policies, resulting in lower overall premiums.
Review Coverage Needs
Assess your insurance needs periodically to ensure you're not paying for unnecessary coverage. Adjust your coverage limits and add-on options based on changes in your circumstances, such as vehicle depreciation or lifestyle changes.
Renew Policies on Time
Renew your insurance policies before the expiration date to avoid lapses in coverage, which can lead to higher premiums due to loss of NCB and perceived higher risk. Timely renewal also demonstrates responsibility and may qualify you for loyalty discounts.
How to Buy a Car Insurance Policy Online?
You can buy a car insurance policy from the insurance company’s official website and RenewBuy. Let’s get into the steps involved in both cases.
Steps to Buy Car Insurance Directly from Insurers
Visit the insurer’s official website.
Navigate to the car insurance section.
Enter details about your vehicle, including make, model, variant, etc.
Specify the type of coverage desired (e.g., third-party liability or comprehensive)
Select add-on covers if required.
Provide personal information such as your name, age, address, etc.
Review the premium quote generated.
Customize the policy according to your preferences and budget, adjusting coverage options and deductible amounts as needed.
Proceed to complete the purchase online.
Steps to Buy Car Insurance Directly from RenewBuy
To buy a car insurance policy from RenewBuy, simply scroll this page up and click ‘View Plans’. With us, you can benefit from competitive premium rates that you may not find on any other platform.
How to Renew Car Insurance Online?
Visit the official website of your insurance provider/aggregator.
Navigate to the ‘Renewal’ or ‘Renew Policy’ section.
Enter your policy details, such as policy number and expiry date.
Review your existing policy details and coverage options.
Make any necessary modifications to your policy if required.
Proceed to complete the renewal payment.
Once the payment is successful, you will receive the renewed policy documents via email.
You can save or print the renewed policy documents for future reference and ensure continuous coverage.
How to Raise a Car Insurance Claim?
You don’t have to worry about the monetary losses since you have a car insurance policy, but what is the procedure to raise a car insurance claim? Let us take a look at it.
Inform the Insurer
As soon as you are involved in the event of misfortune, the first step is to inform your car insurance company. It’s essential to give complete information about what has happened.
Report the Police and File an FIR
In case of significant events, you need to file an FIR to start the car insurance claim. It’s one of the most important parts of the claim process.
Capture Photographs
It's vital to capture photos of the damage caused due to the accident so that the claim procedure with the car insurance company becomes easy.
Submit Documents
You must submit the required documents to the car insurance company. The list of documents will include RC, driving license, FIR, car Insurance policy document, fitness certificate, etc.
Get your Car Repaired
Once the above process is done, you can ask the car insurance company to take your vehicle to the garage to get it repaired.
Claim Settlement
There are two methods of claim settlement. If you have opted for a cashless policy, the motor insurance company will settle the bill with the garage directly. However, if you have opted for reimbursement claims, you will pay the bill, which the insurance company will later reimburse.
What are the Documents Required to FIle a Car Insurance Claim?
Several documents are needed to raise a car insurance claim. It’s crucial to keep it with you, as you never know when you will require them. The documents needed for car insurance claims include
- Claim Form
- Copy of FIR
- Copy of RC, driving license, pan card, etc.
- Insurance documents
- Declaration of fitness.
The car insurance company will settle your claim within a week after receiving all relevant documentation.