Car Insurance
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Car Insurance
If you’ve ever been in a car accident and find yourself needing to repair or replace your vehicle, you know how costly that can be. It can cost several thousand rupees to do so, depending on the extent of the damage. Car insurance companies offer some very affordable options for comprehensive coverage, which should help ensure the safety of you and your prized travel buddy when venturing out on the road.
This article will offer everything you need to know about car insurance in India.
What exactly is Car Insurance?
A car insurance plan is a legally binding agreement between the policyholder and the insurance provider in exchange for a payment. It safeguards the insured from financial loss in the event of an automobile accident or other unpleasant events. The damage caused by the collision might be to the policyholder’s car or to someone else’s property or car, for which the policyholder is legally required to compensate. Both these expenses are covered by car insurance policies in India.
What are the types of Car Insurance?
Car Insurance plans can be primarily divided into six broad types:
To travel by your car on Indian roads, you must have proper third-party insurance coverage, according to the 1988 Motor Vehicles Act. A third-party liability insurance coverage covers policyholders against claims made by any third party during a car accident. However, it should be noted that this plan does not cover any damage to the insured car or the policyholder
A comprehensive insurance policy covers any damage to the covered vehicle as well as third-party claims. It also protects the policyholder’s automobile against fire, theft, and natural disasters.
A standalone own damage insurance policy solely covers the damage done to the insured vehicle in the event of an accident, natural catastrophe, fire, or theft. However, it is crucial to note that a standalone own damage coverage is only effective if the insured vehicle has active third-party liability coverage.
The IRDAI ordered that all purchased cars need to have a minimum of three-year third-party coverage beginning September 1, 2018. Therefore, these plans are getting popular. As the name suggests, 1+3 Bundled plans offer 1 year of standalone own damage coverage and 3 years of third-party liability insurance coverage.
Motor Floater insurance coverage covers all the cars owned by a single policyholder under one insurance policy. It helps to keep the insurance premium amount in check.
PAYD or pay-as-you-drive insurance coverage is a kind of top-up insurance coverage where the policyholder is required to pay depending on how much the car is driven over the coverage period.
Based on the type of car insured, car insurance can be divided into these subtypes:
Commercial vehicle insurance is designed to provide coverage for corporate-owned vehicles in India.
Taxi Insurance provides coverage to taxi owners in India. Most companies offer motor floater insurance coverage to policyholders, who can use this service if they own multiple taxis.
Two-wheeler insurance or bike insurance can provide protection for your two-wheeler in case of an accident. Third-party bike insurance is mandatory for two-wheelers.
Why should I Buy Car Insurance?
If you are the kind of person who is still making up your mind if you should have a car insurance plan, here is why you should buy one.
- Peace of Mind: As the old saying goes where prevention is considered to be much better than cure. That’s true with many things in life – especially when it comes to car insurance. Buying car insurance can be one of the best decisions you’re ever going to make. It could save you money, protect your vehicle and give you peace of mind knowing that if anything were to happen to it, you would receive compensation.
- Save Repairing Expenses: Over the years, car insurance has become an absolute necessity for all motorists. With the rise in accidents and fatalities on our roads, it is better to ensure that you have a good cover for your car. Add to that the rising cost of repairing vehicles, and you will understand why having an insurance policy is so important.
- Mandatory Coverage: Everyone who drives a car is responsible for being insured. Being responsible, you will surely want to protect yourself against accidents and make sure that you are safe in case something unwanted happens. The government mandates you to have a minimum of third-party liability automobile insurance. Being a responsible and law-abiding Indian citizen protects you against fines and other legal entanglements.
What are the Car Insurance add-ons?
Add-on car insurance coverage is optional and can be added to your basic insurance plan by the insurer. In case you wish to get more coverage from your insurance provider, then here are the common add-ons available for car insurance plans:
1. Engine Protection Coverage: A basic car insurance plan, that doesn’t cover things like engine technical breakdown and oil spills. You want your vehicle to be safe, for travel and for you. That is why Engine Protection Coverage is so important to have when you insure a car.
2. Zero Depreciation Coverage: Zero depreciation bike or car coverage helps you receive a higher claim amount by bearing the weight of the vehicle’s depreciation.
3. NCB Coverage: No Claim Bonus add-on coverage guarantees that you will receive your NCB discount each year, even if you made claims in the previous year. For the first year, the NCB discount rate is 20%, increasing to 50% for the fifth year in a row.
4. Return to Invoice Coverage: The loss of value is a regular issue for new automobile owners. The moment you take your new automobile out of the showroom, it starts to depreciate as well as lose value. This add-on ensures an insurance claim for the overall invoice amount in the case of total or partial theft or loss of the automobile.
5. Emergency Assistance Coverage: Emergency Assistance Coverage includes on-the-spot roadside assistance. A technician will be dispatched with a single call to the insurance company.
How to file Car Insurance Claims?
When you incur a loss, you would like to settle the claim as soon as possible. But if you have not dealt with insurance companies in the past, you may find yourself confused about the process of filing for cashless and reimbursement insurance claims.
Cashless Claims
- Enquire your insurance provider about your local cashless garages.
- Visit a local garage authorised by your insurance provider for cashless claims.
- Inform your insurance provider about the claim.
- A surveyor would evaluate your vehicle and approve your claim.
- The garage will repair your car and the insurance company will pay their bills.
- In case of a partial cashless claim, you will have to pay the remaining amount before leaving with your car.
Reimbursement Claims
- Inform your insurance provider about the claim.
- A surveyor would evaluate your vehicle and approve your claim.
- Once approved, you can visit any local garage and get your car fixed.
- You need to pay the garage fees.
- Then, you have to send the claim document along with the repair bills and other relevant paperwork.
- The insurance company will reimburse your claim amount.
What is included in car insurance?
The comprehensive coverage of your car is an important aspect of car insurance. In the case of car accidents, comprehensive coverage makes sure that you come out unscathed. Here’s a list of things covered under a comprehensive auto insurance plan.
What is not included in car insurance?
Understanding the exclusions in a car insurance policy can help you to make an informed choice. Here is a list of common car insurance exclusions.
Damage was sustained when the car was used for purposes not covered by the insurance coverage.
- Damage sustained while travelling outside of the nation or during warfare.
- Problems with the car’s ordinary wear and tear.
- Damage produced by a driver who is either intoxicated or doesn’t have a proper driving licence.
- Mechanical failure and component wear
Best Car Insurance Companies
The car insurance deals can be quite confusing at times. There are thousands of companies that offer the same insurance coverage, but some of them offer it at lower rates than others. If you are in the market looking for the best car insurance companies, here are some you should consider.
Bajaj Allianz
Car Insurance Policy
Car Insurance Policy
Bajaj Allianz
Claim Ratio : 62%
New India
Private Car Insurance Policy
Private Car Insurance Policy
New India
Claim Ratio : 87.54%
HDFC ERGO
Private Car Insurance Policy
Private Car Insurance Policy
HDFC ERGO
Claim Ratio : 82%
IFFCO Tokio
Car Insurance Policy
Car Insurance Policy
IFFCO Tokio
Claim Ratio : 87%
Reliance
Car Insurance Policy
Car Insurance Policy
Reliance
Claim Ratio : 85%
The Bottom Line
Hopefully you will be able to find an important car insurance policy that fits your needs. By staying informed of all the different car insurance policies available, you will stand a greater chance at being confident with the choice you make. Although there are many to be had, don’t let that make your search difficult. After all, finding the best car insurance policy is not something that you have to worry about.
Frequently Asked Questions
An insurance company's claim ratio or claim settlement ratio is a measure used to assess its reliability. It is calculated by dividing the overall number of resolved claims by the overall amount of claims filed to the motor insurance company.
When it comes to choosing the 'best' car insurance company in India, there is no one company which stands out. It all depends on who you are and your insurance requirements. The easiest way to go about it would be to compare various policies and pick one according to your needs.
According to the 1988 Motor Vehicles Act in India, all vehicles operating in any public area must have automobile vehicle insurance coverage. Even if they choose the basic insurance plans, policyholders should have a minimum of third party liability coverage.
