Overview of Car Insurance Plans in India

Car insurance safeguards your car against any financial loss that may occur in case of an accident or any event unfortunate. It is a contract between the car owner and the insurance company for protecting the interest of the policyholder against monetary loss due to car damage.

The roads are uncertain and keeping this in mind, car insurance has been made mandatory in India. Owning a car is exciting but it is also important to keep it secured with insurance given the rise of vehicles on the roads and accidents as well. A car insurance policy comes to rescue when and lowers the cost of damage or repair significantly.

Types of car insurance we offer

Third-Party liability

This plan protects against the claims made by the third party like the driver of the other vehicle, passengers or owner of the other vehicle, pedestrians, etc. This plan is specifically designed to provide the policyholder cover against the claims made for any bodily damage or injuries to the third party and the damage caused to the vehicle. This is a mandatory policy for all vehicles in India.

Comprehensive Car Cover

This insurance policy comes with higher protection for the vehicle insured. The advantage of buying this insurance policy is that this policy protects the policyholder and covers own vehicle damage due to accident, fire, theft, vandalism, etc. This policy also includes third party liability. Added benefits and features are also provided under this plan which makes it one of the best plans for car insurance.

List of car insurance companies with best claim settlement ratio

An insurance company is judged on the basis of the claim settlement ratio. Here is a list of few leading car insurance companies with high claim settlement ratios for the year 2018

Benefits of Car insurance Plans in India

The following are the benefits of having an insurance policy for your car

  1. An insurance policy provides monetary benefits to the survivors in case of accident and support in treatment expenses. It also provides death benefits to the nominee or the family members of the deceased/insured

  2. It covers the policyholder and pays for lawsuits, legal fees arising out of the accident

  3. An insurance policy covers the repair bills of the damage caused to the vehicle due to accident

  4. An insurance policy covers the damage caused to the vehicle due to fire or natural calamities, theft and other man-made incidents

  5. A car insurance policy provides discounts on premiums for having more than one insurance policy with the same insurance company, in case of theft of the car.

  6. An insurance policy provides extended coverage for other people driving the car of the policyholder with permission.

  7. An insurance policy provides rewards in the form of No Claim Bonus and others.

Features of Car Insurance Plans in India:

The following are few salient features of a car insurance policy

  1. Covers for risk
    Car insurance covers the policyholder against risk of damages by man-made disasters like fire, riots, theft, etc, natural disasters like flood, earthquake, landslide, etc and damage during transit, etc

  2. The insured value
    The car is insured for a value known as Insured Declared Value which is based on the price of the manufacturer less the depreciation.

  3. Premiums
    For car insurance, the policyholder is needed to pay premiums which are decided on the basis of

    • The type of vehicle, model number fuel type, capacity, etc

    • The city

    • Age and profession

    • Accessories added or any modifications made in the policy

  4. These factors help in determining car insurance quotes which you are required to pay to buy the policy. You can use online car insurance calculators to find the premium payable for a policy.Add-ons
    This feature allows the policyholder to add extra cover to get protection against the risks that are not covered under the standard policy. Some of such covers are no claim bonus protection, zero depreciation, accident hospitalization, cover for co-passengers and driver, etc.

  5. Tenure and claims
    An insurance policy is valid for a year after which they can easily be renewed.Car insurance renewal can be done online in some simple steps. The claim settlement process has also been simplified by reimbursement or cashless services in the network garages

Why is car insurance necessary?

Here are a few reasons why having car insurance is necessary

  1. Mandatory:Having motor insurance is no longer a choice. The Motor Vehicle Act has made it mandatory for all the vehicles whether private or commercial, to have valid third party car insurance wherein third-party liability is also mandatory. The buyer can choose between third party liability cover or comprehensive cover. The third-party liability has been made mandatory to cover the losses caused to the third party.

  2. Reduce the cost of damage: Car insurance reduces the cost of damage caused to the vehicle, the policyholder/owner, cost or repair, legal liabilities, loss of life, hospitalization cost, etc. Car insurance policy will come to rescue at times like these.

  3. 24*7 assistance: These days most insurance companies provide 24*7 roadside assistance in case of a sudden breakdown

  4. Cashless services: Car insurance also comes with the option of availing cashless services in the certified network garages across the nation.

  5. Relieves mental stress: Having an insurance policy for your car gives you peace of mind by supporting financially for unfortunate events.

Add-ons in a car insurance policy

Insurance companies provide add-on covers which are additional covers to protect your car and provide extra coverage with the basic insurance cover. Add-on covers can be taken upon payment of extra premium which is added to car insurance quotes to get the final premium payable for the policy. Add-on covers are available under comprehensive car insurance policies. Some common add-ons include the following -

  1. No Claim Bonus Protection
    For every claim-free year, the insurance company provides a discount on the premium to be paid upon renewal of the insurance policy. This bonus is cumulative and every year, increases. No Claim Bonus protection cover protects the NCB. No Claim Bonus becomes void on making a claim and this add on the cover helps you in retaining the No Claim Bonus even after making a claim.

  2. Engine Protection Cover
    This cover protects the policyholder and compensates for any damage caused to the engine by leakages or water ingression. This add on cover protects the engine, gearbox and differential parts of the insured vehicle.

  3. Zero depreciation cover
    This add-on cover compensates for the depreciating value of the car. With this cover, the policyholder does not have to pay for the depreciated value of the car. This add-on is subjected to some claims. The feature of voluntary deductible remains applicable even with zero depreciation add-on cover.

  4. Consumable Cover
    This add-on cover compensates for the consumable items like nuts-bolts, grease, lubricants, engine oil, brake oil, etc.

  5. Key protection cover
    This add on covers the policyholder for expenses incurred on key replacement or repair. This is a fixed number claim add-on cover and requires FIR in case of theft. The cover pays for replacing the key and lock in case of both thefts and lost.

  6. Daily allowance
    This cover gives the benefit of daily allowance when the car is at the workshop for repair for more than 3 days. This allowance is given for travelling through any other mode other than the insured vehicle.

  7. Personal Accident Rider
    This rider provides coverage for personal injury, death, disability or damage due to an accident

The Application Process for car insurance plans in India

The application process for buying car insurance cannot get easier than this. The online buying option allows the user to get their car insured in just a few clicks without any hustle.

  • To buy login to the official website of the policy, you want to buy

  • Fill in the details like vehicle registration number, vehicle model, fuel type, age of the vehicle, etc

  • Check the premium quote and once satisfied, make the payment online through debit/credit card, net banking, etc.

Eligibility and documents required for buying car insurance plans in India

The eligibility and requirement of documents for buying car insurance are

  • RC book

  • Driving license

  • Vehicle registration

  • Identity proof

  • Residence proof

  • PAN number

  • Invoice of the new car

  • Insurance policy document (if any)

  • No Claim certificate in case of already existing policy

Claim process of car insurance in India

The car insurance claim process has also become as easy as buying car insurance. You can also claim your insurance offline by connecting with the insurance company representative and inform them about the claim to be made.

You will have to follow the following steps

  • Inform your insurer about the incident

  • File an FIR in case of theft or loss due to man-made incidents

  • Do not move your vehicle from the spot before the surveyor visits

  • Once the surveyor completes the survey and submits the report, your cashless service option will be available for you to repair your vehicle.

  • Submit the original bills and estimate invoice for reimbursement

  • Submit documents required like policy document or number, RC, driving license, etc.

  • Once the process is completed, the insurance claim will be settled

Exclusions in car insurance plans in India

Whenever you buy car insurance, keep the following exclusions. Not every damage needs to be entertained by the insurance.

  1. Driving under the influence of alcohol, drugs or any other intoxication

  2. Accidental damage caused due to illegal activity

  3. Driving without driving license

  4. Damage caused due to nuclear attack or war

  5. Using vehicle other than the mentioned use

  6. Regular wear and tear