Owning a personal four-wheeler vehicle has become a necessity these days. The current stats about the number of registered vehicles in India – 75,197,000 units in Dec 2018 emphasize more on this need in our country. While most people would agree that owning a car is no less than a primary need nowadays, not everyone in India knows well about car insurance.
On the brighter side, the Indian motor insurance market registered a growth at the rate of 11.36% during 2012-2018. Amidst all this, it is important for every car owner to understand various facets of car insurance and benefit from it during unforeseen events.
In this blog, we will cover every aspect related to car insurance to help you make an informed buying decision and avail of its benefits in the long run.
What is Car Insurance?
Car insurance is a type of motor insurance policy that covers a car and its owner (you) against damages that often lead to financial losses. In technical terms, it is more of a contract under which the insurance company provides insurance coverage to the insured car against own damage and third-party liability.
The primary aim of car insurance is to provide financial protection to you and your car against losses resulting from theft, accidents, calamities, and third-party liability. It also comes with the benefit of personal accident cover for the owner-driver of a car.
What are the Key Features of a Car Insurance Policy?
Given below are some of the features of car insurance policies in general:
- Third-party damage cover
- Own damage cover
- Personal accident cover (up to Rs. 15 lakh)
- No Claim Bonus (NCB) for every claim-free year
- Add-on covers for additional benefits over and above the base policy
- Affordable car insurance premium
- Easy to buy the policy both online and offline
What are the Different Types of Car Insurance Policies in India?
In general, there are three types of car insurance policies:
It provides coverage for third-party liabilities, including car damage, physical injury, property damage, or death.
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Own damage insurance
It provides insurance coverage to the policyholder in case the insured car sustains any damage covered under the policy. Since third-party insurance does not cover own damage, you need to buy it separately or as a comprehensive policy.
A comprehensive insurance policy provides coverage for both own damage and third-party liability. This type of policy includes third-party coverage, which is why you need not buy that separately.
How to Calculate Car Insurance Premium?
The payable car insurance premium is based on several factors, such as:
- The Insured Declared Value (IDV) of your car
- Vehicle age
- Car type
- Cubic capacity of the engine
- Geographical zone where the vehicle is registered
Out of all these factors, IDV plays the primary role in deciding the insurance premium and can be calculated as:
IDV = Car’s showroom price + Cost of included accessories – Depreciation value
In general, you can use the following formula to calculate car insurance premium:
IDV x Car Insurance Premium Defined by the Insurer + Optional Benefits – NCB
You can also use an online car insurance calculator to get an idea of the insurance premium payable.
Also Read: All About Insurance in India
How to Compare Car Insurance Policies Online?
Before you buy any car insurance policy, it is crucial to compare it with similar other options to understand what makes them different from each other. Car insurance comparison becomes easier when you do it online. However, you must keep in mind various parameters to compare these policies, such as:
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Car’s model, make, and variant
The insurance premium of a luxury car will be higher than that of a hatchback. Similarly, an SUV attracts a higher premium than many other car models.
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Year of manufacture
The details of the manufacturing year of a vehicle is used to assess its IDV, which are then used to calculate its premium.
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CNG fitted car
If your car has a CNG system fitted in it, its insurance premium will be higher than a petrol/diesel car.
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Coverage for accessories
You can get various car accessories insured by paying an additional premium above the base policy premium.
Also Read: All About Car Insurance Comparison in India
What is Covered Under Car Insurance in General?
- Damage of loss of the insured car
- Damage or loss of vehicle resulting from an accident, theft, fire, calamities, etc.
- Personal accident cover
- Financial loss resulting from the death/injury caused to a third-party or property damage
What is Not Covered Under Car Insurance?
- Gradual wear and tear to the car and its parts
- Damage or loss of the vehicle when driven by a person without a valid driving license
- Damage or loss of the vehicle in case of intoxication due to drugs and alcohol
- Loss or damage to the car’s engine in case of oil leakage
- Loss or damage in case the policy has expired and is not in force
What are Add-On related to Car Insurance?
Car insurance add-ons, as the name suggests, provide additional insurance protection to you and your car to strengthen the basic policy. They are available by paying an extra premium over the base policy premium.
Given below is the list of car insurance add-ons:
- Engine protection cover
- Zero depreciation cover
- Key protection cover
- Consumable cover
- Personal accident rider
- Car accessories coverage
- Daily allowance cover
- Roadside assistance cover
- Return to invoice cover
- Tyre protection cover
- Rim damage cover
- Personal possession cover
- Return to invoice add-on
- Passenger cover
Third Party vs Comprehensive Car Insurance Comparison
| Coverage | Third-Party | Comprehensive |
| Third-party property damage | ✓ | ✓ |
| Third-party body injury | ✓ | ✓ |
| Car theft | – | ✓ |
| Own damage of car | – | ✓ |
| Personal accidents | ✓ | ✓ |
| Availability of add-on riders | – | ✓ |
What to Consider While Selecting a Car Insurance Policy?
- Inclusions and exclusions related to the policy you have selected
- Incurred claim ratio (the higher the better)
- Availability of add-ons
- Market reputation of the car insurance company
- Insurance premium in comparison to other policies with similar features
How to Buy Car Insurance Online?
You can buy car insurance online either by visiting the official website of the chosen insurance company or through insurance aggregators. Given below are the general steps you can follow for car insurance purchase:
- Visit the website of insurer or insurance aggregator
- Select the policy you want to buy online
- Check its inclusions and exclusions in detail along with other terms and conditions
- Include add-ons as per your requirements
- Make online payment and that’s it.
- You will receive the policy documents online at your registered email address along with a physical copy at your home address
What are the Benefits of Purchasing Car Insurance Online?
Buying car insurance online has become quite easier with the easy reach of the Internet and smartphones amongst the masses. You can easily buy the most suitable policy online within a few minutes. If you want to know why most people now choose the option of online four wheeler insurance purchase, read the benefits below:
- No need to deal with local insurance agents who try to sell the products of insurers they are associated with
- Zero or least paperwork involved as you can buy the policy by filling online forms and uploading the required documents
- Highly convenient and help save time as you do not need to visit the insurer’s branch
- Timely payment reminders so that you do not lose out on the renewal discounts and avoid policy lapse scenarios
- Ease of comparing various plans from different insurers online
- Availability of multiple payment modes for cashless transactions
- Cost-savings because of lower premium in comparison to buying the same policy offline
What are the Benefits of Online Car Insurance Renewal?
Since every car insurance policy comes with a definite validity period, you need to renew it to receive continued benefits. Similarly to buying the policy online, you can also renew it online and avail the following benefits:
- Easy to customize the policy and include add-ons if needed at the time of renewal
- Transparent and secure policy renewal process
- Easy to switch from one insurer to another at the time of renewal
- Ease of transferring the accumulated NCB
- No hidden charges
How to File a Claim Under Your Car Insurance Policy?
As a car insurance policyholder, you must know about various steps involved in filing a claim. It is because the insurer can reject the claim submission based on various grounds. Given below are the common steps involved in filing a four wheeler insurance claim:
- Raise a claim request by intimating your insurer about the event that has occurred along with providing the required documents
- Wait for the assigned surveyor to inspect the claimed damage or loss of the insured vehicle
- Once the inspection is completed, send the car to a partner garage to get it repaired as required
- Under the cashless claim policies, the insurance company will directly settle the repair bills with the network garage.
- Similarly, you can opt for a reimbursement claim after paying the bills out of pocket first and then raising the claim request
What are the Documents Required While Filing a Car Insurance Claim?
Given below is the list of documents that you should keep handy while registering a claim:
- Policy FIR copy
- Duly filled claim form
- Fitness certificate in case of commercial vehicle
- Driving license
- Registration Certificate (RC) of the insured car
- Policy documents
List of Popular Car Insurance Companies in India
Given below is an overview of the popular car insurance companies in India:
- Bharti AXA Car Insurance
- Bajaj Allianz Car Insurance
- Cholamandalam Car Insurance
- Digit Car Insurance
- Edelweiss Car Insurance
- Future Generali Car Insurance
- IFFCO TOKIO Car Insurance
- HDFC ERGO Car Insurance
- Kotak Mahindra Car Insurance
- Liberty Car Insurance
- Oriental Car Insurance
- SBI Car Insurance, and many others
Why Read BimaBandhu Before Buying a Car Insurance Policy?
Insuring your personal vehicle is a crucial task that should be done by carefully looking at all the sides of an insurance purchase. At BimaBandhu, we are dedicated to providing you with in-depth information about various types of insurance policies, including car insurance to help you make the right buying decision.
FAQs
When should you renew your car insurance policy?
Ideally, you should get it renewed before the expiry date of your policy to ensure there is no break in between.
What is zero depreciation car insurance?
Zero dep car insurance is an add-on cover that allows you to get compensation up to the IDV without considering depreciation. This add-on coverage can be availed by paying an additional premium.
How many times can you file car insurance claims in a year?
The limit to the number of claims you can file in a year varies from one insurer to another.
What is IDV in car insurance?
It refers to the maximum amount that the insurer will pay you in case of total loss or theft of your vehicle.
What are the risks covered in a comprehensive car insurance policy?
The policy covers third-party liability, accidents by external means, riots, malicious acts, natural calamities, etc.
What is NCB in car insurance?
NCB or No Claim Bonus is the discount you will get at the time of renewing the policy for every claim-free year.
What is a cashless facility in car insurance?
It means that you do not need to pay any amount at the time of car repair. The insurer will pay the bills directly to the partner garages.
Is an online car insurance policy valid?
A car insurance policy issued online is legally valid under the related laws. You need to make sure you buy it from a registered insurer.
Do I need to file an FIR to raise a claim?
In most cases, you will require this document. Check with your insurer for more details.
