Motor Insurance

Motor insurance is mandatory for all the two-wheeler and four-wheeler vehicles such as cars, bikes, scooters, trucks that are plying on the roads in India. Vehicle owners can avail motor insurance even for commercial vehicles as well. Motor Vehicle insurance is the most important document for all vehicle owners/drivers. Its main objective is to give complete protection against physical damage or loss sustained by the insured vehicle from natural and man-made calamities. Apart from the own-damage cover, the auto insurance policy also provides coverage for third-party liabilities, arising out of any accidental damage, injury or death of a third-party. This way the policy ensures peace of mind and security on the roads.

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Types of Motor Insurance

Motor Insurance Types

Motor Insurance can be broadly classified under below heads:

  • Car Insurance

    Car Insurance gives coverage against accidental loss or damages to own car or a third party. While choosing a car insurance policy, a person should always compare the premium offered by various insurers to ensure that he got the best deal. The amount of premium would depend on the make & value of the car, state from where it is registered and the manufacturing year.

  • Two Wheeler Insurance

    Two Wheeler Insurance provides protection to bikes and scooters. It covers two wheeler vehicles against any own damages as well as any accidental loss caused to third party property or person. Similar to car insurance, the premium of a two-wheeler policy depends on the age of the bike, its make & model, registration year, etc..

  • Commercial Vehicle Insurance

    Commercial vehicle insurance helps all commercial vehicle drivers to reduce losses they might incur due to damage to their vehicle. Here commercial vehicles include those that are not used for personal purposes, like goods carrying vehicles, trucks, etc.

Types of Motor Insurance Coverage in India

  • Third-Party Insurance Cover

    It covers a third person who has been injured in an accident involving you and your vehicle, including car, scooters, bikes, trucks, etc. The policy doesn’t provide any direct benefit to the insured. As per the Insurance Regulatory and Development of India (IRDA), no insurer can decline to underwrite third party insurance.

  • Comprehensive Insurance Cover

    This cover is an add on to the third party insurance plan and protects the owner of cars, bikes, scooters and trucks from financial losses caused by damage or theft of the insured vehicle. Besides insuring vehicles, it also provides third-party coverage.

  • Pay as You Drive Insurance

    Pay As You Drive policy is a newly introduced car insurance product as per the recent guidelines of IRDA under the Sandbox project. This car insurance policy allows the policyholder to pay the insurance premiums as per the kilometres driven. The policy premiums are to be decided at the time of buying the policy depending on the declared distance by the insurance seeker that he/she expects to drive in a policy tenure. Pay As You Drive policy offers both comprehensive and third party liability coverage on a pilot basis for a year. Currently, insurers like Bharti AXA, Acko General, ICICI Lombard are providing this policy through their online portals, agents, aggregator websites or other distribution channels.

What is Covered in Motor Insurance?

The damages to the vehicle due to below perils are covered in motor insurance-

  • Riot & strike
  • Fire & burglary
  • Terrorism act
  • Earthquake
  • Landslide
  • Flood, storm, cyclone

What is Not Covered in Motor Insurance?

Always remember your vehicle insurance will not provide coverage in below situations-

  • If the driver is under the influence of drugs or abuse
  • The car/ two wheeler/ commercial vehicle is used for illegal activities or a purpose otherwise stated in the policy
  • Not having a valid driving license
  • Any loss or damage to the insured vehicle if it happens outside India
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Why You Should Buy Vehicle Insurance?

Do you know, around 4 lakh people meet with road accidents every month? A survey was conducted by the World Health Organization Report, which stated that in 2012, India had recorded the highest number of road deaths in the world.

Considering the high number and poor conditions of the road, motor insurance has become a necessity to drive on the Indian roads. Motor insurance gives financial protection not only to you but it also covers third party damages. A few private insurers offer a large number of other utilities to the policyholders, like:

  • Direct settlement or cashless claims at network garages
  • Depreciation Cover
  • Engine Protection Cover
  • 24X7 Road Side assistance
  • Towing Facility

How to File a Motor Insurance Claim?

The document and formalities involved in a vehicle insurance claim settlement will depend upon the type of vehicle and nature of the loss.

  • Filing for a Claim in Case of Damage to Owned Car/ Two Wheeler/ Commercial Vehicle

    To initiate the process, the insured is required to submit a detailed estimate of the loss to the insurance company. Independent automobile surveyors with engineering background are given the task of assessing the reason and extent of the loss. They carefully inspect the damaged vehicle and submit their survey report with the insurance company who will review and examine it in accordance with the recommendations mentioned therein. The usual practice is to authorize repairs with the repairer to whom the letter is issued in this regard.

  • Apart from Claim Form, Other Documents Required for Processing Claims are-

    • Fitness Certificate (Commercial Vehicles)
    • Driving License
    • Registration Certificate Book
    • Final Bill from repairers
    • Police Report
  • Third Party Claims

    On receipt of the notice from the insured or third party, the matter is transferred to the advocate. Complete information about the accident is obtained from the insured along with the following documents-

    • Police Report
    • Driving License
    • Medical Certificate
    • Death certificate in case of a fatal claim
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  • Parameters that Decide Motor Insurance Premium

    • Age of the person
    • Driving history
    • Make of the commercial vehicle/ car/ two wheeler
    • The profession of the person
    • Geographic location

Motor Insurance FAQ's

  • Q:Which vehicle insurance plan should I purchase- comprehensive insurance plan or third-party insurance plan only?

    Ans: Having a third-party motor insurance plan is compulsory for all automobiles plying on the Indian roads. This insurance plan provides coverage for injuries or damages caused to other people. The beneficiary is third-party only. The prudent way to get coverage for the losses or damages caused to the insured vehicle is buying a comprehensive motor insurance plan. It provides the coverage for third-party liability along with own damage caused to the insured automobile, such as bikes, scooters, cars, trucks, etc.
  • Q:How is the motor insurance premium calculated?

    Ans: There are many factors, such as IDV, deductibles, seating capacity, cubic capacity, previous insurance history etc. that affect the motor insurance premium that you would pay. For comprehensive insurance plans, premium charges vary insurance provider per insurance provider on the basis of the coverage provided. Do compare insurance premiums so that you get the best quote. Third-party premium amounts are decided by IRDA.
  • Q:What coverage would meet my motor insurance needs?

    Ans: The sum insured for the automobile is the Insured’s Declared Value. It reflects the present market value of the automobile. If you buy third party motor insurance, you get covered against third-party liability specifically. The offered coverage is unlimited for the third-party’s injury and the offered coverage is of Rs 7, 50,000 for third-party’s property damage. There is an option for the policyholder to limit the coverage for third-party property damage to Rs 6,000. It will reduce the liability only premium.
  • Q:What is the period of the motor insurance policy?

    Ans: Generally, a vehicle insurance policy is valid for one year and it has to be renewed prior to the due date in order to avoid any lapse in the policy. For a smoother insurance experience, always pay the motor insurance premium before the due date. If your policy has lapsed then your automobile would undergo an inspection. In addition to that, if a comprehensive insurance policy remains lapse for a time period of more than 90 days, the benefit of “No Claim Bonus” isn’t provided.
  • Q:What is "No Claim Bonus" in Motor Insurance?

    Ans: “No Claim Bonus” is the benefit accumulated to a policyholder in case he hasn’t filed any claim throughout the policy period. According to the present Indian norms, it varies from 20-50 per cent for the comprehensive insurance plan. NCB isn’t applicable for a third-party motor insurance plan. If a claim is filed, then the “No Claim Bonus” is lost for that policy period. NCB is provided to the policyholder and not to the insured car, two wheelers or commercial vehicle. At the time of the vehicle transfer, the insurance plan could be transferred to a new owner but NCB can’t be transferred. The responsibility of paying the remaining balance falls on the shoulders of the new buyer. The original/former owner of the vehicle can use the NCB at the time of purchase of a new automobile.
  • Q:In case I change my motor insurance provider, would my No Claim Bonus be migrated?

    Ans: Yes, you surely can avail the NCB if you change your motor insurance provider at the time of renewing the policy. All you would need to do is producing proof of the earned NCB from your current insurance provider. You can produce the original copy of your expiring policy and a certification that you haven’t filed any claim for the (expiring) insurance plan. A renewal notice or a letter stating that you’re entitled to the NCB from your previous insurance provider can be a proof for this.
  • Q:Is there any kind of discounts that would reduce my premium?

    Ans: Apart from the NCB, there are a few discounts available on the own damage premium for having a membership of the Automobile Association of India, Vintage Cars- private cars that are certified by the Vintage and Classic Car Club of India, installation of any anti-theft equipment that is approved by the Automobile Research Association of India (ARAI), Pune and is acknowledged by AAI. There are concessions offered specifically for modified or designed automobiles for the visually challenged, physically challenged or mentally challenged individuals that are aptly certified in the Registration Certificate by the concerned RTA. When you select an additional voluntary deductible, your motor insurance provider offers you attractive discounts. As per the Liability Only section, there are discounts available for decreasing the third-party property damage from Rs 7,50,000 to Rs 6,000.
  • Q:Is service tax applicable on the motor insurance premium?

    Ans: Yes, service tax is levied on motor insurance premiums as per the prevailing law rule(s).
  • Q:What is a deductible in motor insurance?

    Ans: The deductible is the amount of which the claim would be payable. Generally, a normal standard or compulsory deductible for most of the automobiles range from Rs 50 for the two wheeler automobile, including bikes and scooters to Rs 500 for private cars and commercial vehicle, including trucks that enhance according to the carrying capacity or cubic capacity of the automobile. Though, there could be cases where the insurance provider might enforce extra deductible which depends on the vehicle’s age or if the claims frequency is comparatively higher.
  • Q:What is the process for getting the changes done in the policy?

    Ans: In case there are any changes that need to be made in the policy such as address change or any particular changes regarding the automobile or its usage, it could be done by an endorsement by the motor insurance provider. You need to submit a letter to your insurance provider along with the proof of the changes so that you could obtain the endorsement. There are a few endorsements that might charge an extra premium from you.
  • Q:If I am driving my car in a specific city, how the premium rate would be applied?

    Ans: For the sole purpose of applying the motor insurance premium rate, the specific location where the automobile is registered is considered. Don’t confuse the place of registration with the place where the automobile is used. For instance, if your automobile is registered in Chennai, the applicable charges for Zone A would be charged. Even if you shift to another town or city, the same charges would be applied. Likewise, if an automobile is registered in a town, Zone B premium charges are applicable. Later on, in case the vehicle own moves to a metro city, he would be charged the rate of Zone B only.
  • Q:In case I fit LPG or CNG kit in my automobile, is it necessary to update the insurance provider about that?

    Ans: If an LPG or CNG kit is installed in your automobile, you must inform the Road Transport Authority’s office, from where the automobile was registered so that they can modify the necessary changes in the registration certificate of the automobile. The motor insurance provider should be informed as well so that it can provide the coverage to the kit on the payment of additional premium as per the kit’s value under the Own Damage Section.
  • Q:Can I get my motor insurance transferred to the buyer of my automobile?

    Ans: Yes, motor insurance is transferable to the purchaser of the automobile. All you have to do is inform in writing about the transfer to its insurance provider. The original owner of the car/ two wheeler needs to fill out a new proposal form. A nominal fee is charged for the insurance transfer along with the recovery of No Claim Bonus from the transfer date till the policy expires on a pro-rata basis. Keep in mind that ownership transfer in comprehensive insurance plans has to be updated within 14 days from the date of transfer. If the original buyer fails to do so, no claim would be payable regarding the Own Damage.
  • Q:If I lose my motor insurance policy, would I get a duplicate copy?

    Ans: Yes. You have to approach the office of your motor insurance provider from where you have purchased your policy and submit a request in writing. A nominal fee would be charged for the issue of a duplicate policy.
  • Q:What documents are required to submit a vehicle insurance claim?

    Ans: For most of the motor insurance providers, the documents mentioned below are required. Although, read the fine print of your policy carefully and cross-check. 1. Duly filled claim form 2. Photostat copy of automobile’s Registration Certificate 3. The original estimate of loss 4. Original invoice and payment receipt of the repair. If you have availed the cashless facility, repair invoice is required to be submitted. 5. FIR is required if you file a claim for vehicle loss/theft 6. The keys are required to be submitted along with a non-traceable certificate in case you are filing theft claims.
  • Q:What happens if I don’t buy motor insurance for my vehicle?

    Ans: All cars, bikes, scooters and trucks plying on Indian roads need to have a valid motor insurance policy. If you don’t buy motor insurance for your vehicle, you will defy the Motor Vehicles Act, 1988 and will be liable to pay a fine of Rs 2000 or get jailed for up to three months.
  • Q:Is buying motor insurance policy easy?

    Ans: Yes. It is very easy to buy motor insurance for your vehicle, be it a two wheeler, a car or a commercial vehicle. You can get in touch with an insurance agent or visit the branch of the insurance provider. All insurance companies in India also allow vehicle owners to purchase insurance online within a few minutes without any hassles.
  • Q:Is it beneficial to buy a motor insurance policy online?

    Ans: Yes. It is extremely beneficial to purchase motor insurance online as it is a faster process, more convenient and paperless. Some insurers also offer discounts to vehicle owners on buying insurance online. Besides, the policy can be issued within a few minutes without the need for you to step out of your house.
  • Q:Can I renew my motor insurance policy online?

    Ans: Yes. You can renew your motor insurance policy online by visiting your insurer’s official website or by going to an insurance broker website, like policybazaar.com.
  • Q:Is it possible for me to cancel my motor insurance claim?

    Ans: Yes, you can cancel your motor insurance claim by contacting your insurance provider by calling on their customer care number or by sending an email requesting them to cancel your claim.
  • Q:What is a Motor Insurance Cover Note?

    Ans: A motor insurance cover note is a certificate of insurance that is issued by an insurance company prior to the actual policy document. This document is issued after the vehicle owner submits a filled-in proposal form and pays the insurance premium. The validity of the cover note is 60 days from the date of its issuance. Hence, it is important for the insurance company to issue a motor insurance policy document to the vehicle owner before the cover note expires.
  • Q:When is pre-policy vehicle inspection carried out?

    Ans: A motor insurance company conducts pre-policy inspection of cars, bikes, scooters or trucks if:
    • There is a break-in-insurance
    • Third party insurance has to be converted to comprehensive insurance
    • Imported cars or bikes have to insured
    • The fresh payment has been received after a bounced cheque
  • Q:What do you mean by electronic/ electrical accessories in cars?

    Ans: Electronic or electrical accessories include those electronic/ electric items fitted in your car that was not provided by the vehicle manufacturer at the time of purchase. For example, if you added an LCD screen in your car after buying it, it will be considered as an electronic/ electric accessories. These accessories are covered only if the vehicle owner opts for its coverage while buying the motor insurance policy.
  • Q:Who can get personal accident cover in case of cars?

    Ans: You can buy personal accident covers for the following people under your motor insurance policy:
    • Owner-driver
    • Passengers (both named and unnamed occupants)
    • Paid driver
  • Q:What happens if I sell my vehicle?

    Ans: If you sell your two wheeler, four wheeler or commercial vehicle, the ongoing motor insurance policy will have to be transferred to the name of the buyer. The buyer should apply for the insurance transfer within 14 days of vehicle sale. You can also transfer your policy to another vehicle of yours and then the buyer would have to purchase a new policy for the sold vehicle.
  • Q:What should I do in case of an accident?

    Ans: In case your vehicle meets with an accident, you should notify the police and take spot pictures. Click pictures of your vehicle as well as the other vehicle from all angles and focus on the damages. Exchange crucial information from the driver of the other vehicle, including policy number, motor insurance provider, name, phone number, etc. Contact your insurer and file a claim in order to get your damages covered. Keep your car keys and belongings safe.

News

  • Traffic Rules Violators May Have to Pay Higher Motor Insurance Premiums Soon

    Repeat offenders of traffic rules may soon have to pay a higher motor insurance premium. A working panel by the Insurance Regulatory & Development Authority (IRDA) of India has recommended introducing a new ‘Traffic Violation Premium’ section under motor insurance.

    As per the draft proposal, the new Traffic Violation Premium section will be a penalty points-based system where every violation will be accumulated. People with more violations will be required to pay a higher premium. For instance, wrong parking will carry 10 points and drunk driving will carry 100 points. Moreover, people with 20 points or less would not have any impact on their premium.

    The draft further added that the new premium section will be applicable to the third party and own damage premium section. This means Traffic Violation Premium will be attached to both third party insurance or comprehensive insurance.

    The new Traffic Violation Premium will range from Rs 100 to Rs 750 in the case of two wheelers and Rs 300 to Rs 1500 in case of cars and commercial vehicles.

    However, the new premium section will not apply to new cars but only during car insurance renewals. The premium will be applicable to all car owners, be it individuals or companies. People whose cars are driven by paid drivers will be responsible for any traffic rules violations by their drivers.

    The working group has suggested for the new premium system to be conducted in the national capital of Delhi on a pilot basis. During the period, any traffic violation done by cars from other states will also lead to an additional premium during policy renewals.

    The Insurance Information Bureau of India (IIB) will coordinate the data from traffic police of different states. The National Informatics Centre capture the traffic violation data and will circulate the points of each vehicle with the different insurance companies.

  • New Motor Vehicle Rules from October 01, 2020

    As per the recent official release by the Union Ministry of Road Transport & Highways (MoRTH) on the Central Motor Vehicle Rules 1989 amendment, traffic rules will be implemented with advanced IT services and electronic monitoring in India. The same will be implemented from October 1, 2020 under the purview of the Motor Vehicle Act.

    Last year, modifications were made in the Motor Vehicle Act to revamp transportation rules and penalties in the country including traffic rule violations and technology advancement to curb any form of corruption.

    Below are the key changes that will be implemented in the Motor Vehicle Rules:

    • When driving, the driver can use mobile phones for route navigation, provided he/she doesn’t lose his concentration.
    • Electronically validated vehicle documents don’t need to be furnished in physical form, including cases where the document need to be seized.
    • License disqualification details need to be chronologically uploaded on the portal and shall be updated regularly.
    • Driver records and driving behavior would be monitored.
    • Regular updation of the driving records on the portal post every inspection.
    • Policy officer’s and stakeholder’s identity needs to be noted on the official portal.
    • Drivers can maintain their vehicle documents on the central governments' online portal like m-parivahan or Digilocker.

    The official release by the government mentions enforcement of these amendments and monitoring of traffic rules, to improve road safety and minimize any harassment of the driver.

  • IRDAI makes Pollution certificate essential to renew motor insurance policies in India

    In regard to the motor insurance renewal, The Insurance Regulatory and Development Authority of India (IRDAI) issues guidelines to the general insurance companies in India, to obtain valid pollution under control (PUC) certificate for the vehicle to be insured.

    Earlier, the Supreme Court of India had directed Insurance providers to not renew motor insurance for a vehicle without a valid PUC certificate. Now IRDAI has released a circular asking all the Insurers to follow the Supreme Court of India directions especially in the Delhi – NCR.

    Pollution under control (PUC) Certificate is a document that any vehicle owner/driver can be asked to furnish by the state government authorized police personnel. This document/certificate can be issued from any petrol pump with a Pollution Checking Centre issue certificates to ensure that the vehicle on road complies with the prescribed emission norms.

  • Lockdown 2.0: Finance Ministry Announces Extended Policy Renewal Date for Motor Insurance!

    Considering the ongoing outbreak of corona virus and the adversities faced by the common masses, the Central Government has announced some relief in regard to payment of annual premiums for Third Party Motor Insurance owners. As per the recent announcement of Finance Ministry, the policyholders can hold their premium payments till May 15, 2020. The window is provided for those policies, which renewal date falls during the period of March 15-May 3, 2020.

    As per the insurance norms, if the policyholder fails to pay the premium on or before the renewal due date, the policy ceases to be in force. While policyholder gets a grace period of 30 days to renew the policy in case of health insurance, this is not the same in case of motor insurance. This may even lead to a hefty penalty for driving a vehicle without an active insurance. With this announcement, there will be a great relief for the policyholders in terms of managing their finances during this hardship.

Written By: PolicyBazaar - Updated: 20 January 2021
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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Motor Insurance Reviews & Ratings
4.5 / 5 (Based on 338 Reviews)
(Showing Newest 15 reviews)
Jatin
Tajapur, January 22, 2021
Helpful team
I have recently bought a motor insurance for my Ertiga car and it is really a nice plan. I got a great help from the team policybazaar and its customer care team is superb in nature. They helped me in getting one of the best plan and I am happy. Thanks to team policybazaar.
Chanakshi
Udagamandalam, January 21, 2021
My claim was settled
One of the best thing I like about policybazaar is that they settled my claim within no time and it was a cashless claim. Everything was sorted easily and I am blessed to be a customer of policybazaar. Thanks team.
Darshini
Udagamandalam, January 21, 2021
I like my motor plan
I bought a motor insurance policy online few days back. I saw several motor insurance policy from the policybazaar and all the plans are really good. I even some of the additional features and the benefits so that I can easily enhance it. Thank you policybazaar.
Bani
Udagamandalam, January 19, 2021
Unique and best services
I was searching for a best motor insurance policy and was googling it out. I got to know about policybazaar and its features from my friend and checked their website. I found certain good car insurance policy. They all are best and I really like the plans. I choose motor car insurance plans as per my choice. Thank you.
Aisha
Moga, January 19, 2021
Good quotes
I got a good number of motor insurance quotes and plans when I visited to the website of the policybazaar. They are really good and into my budget. I am quite convinced and satisfied with the services of the policybazaar. It has several benefits too.
Kriyansh
Hadol, January 18, 2021
Great supportive team
The service team known to be as supportive team of policybazaar is good and genuine. They helped me in settling my claim. I feel that I took a right decision by buying a motor insurance policy from the policybazaar. Kudos to whole team of policybazaar.
Virat
N.paravur, January 18, 2021
Easy to compare
It is really easy to compare for a motor insurance policy. I visited to the website of the policybazaar and got the details regarding my motor car. It is really easy to buy a plan as I can compare the best one out of several motor plans. Thank you so much team.
Kriti
J.n.prasad, January 15, 2021
Variety of plans available
In the website of policybazaar, you can search and get to know about variety of motor insurance plans. I bought a car insurance policy for my car Baleno and it has been a best thing. I choose a best plan from a great company. Good work team policybazaar.
Ishita
N.paravur, January 15, 2021
Excellent plans
I have recently took a motor insurance policy from the policybazaar and it has been an excellent plan for me and my vehicle. I am happy that I have received a warm services from the policybazaar. Thank you team.
Anjali
Yashwant Nagar, December 23, 2020
Get the helpline support
Every company is really good when it’s helpline number gives us the help. So, I feel that policybazaar is that company which has given me so much support and happiness.
Ridhima
J.n.prasad, December 23, 2020
Easy to buy
I was looking for the best motor insurance policy and stick my eyes to the quotes available on policybazaar. They are friendly in nature and very good. It is easy to buy the plans.
Sidharth
N.paravur, December 23, 2020
Quotes and offers
I visited the Policybazaar website to buy the motor insurance policy. The customer care executive of the company are genuine and thus provided me with so much of quotes related to my motor vehicle.
Vikram
Ichoda, December 23, 2020
Unique services
I have got the best services for my motor vehicle as I bought the motor insurance policy. I am really happy and satisfied person with the policybazaar.
Akshay
Maanikpur, December 23, 2020
Bought policy
I have bought the motor insurance policy for my car and it is really amazing plan with so many features. I feel policybazaar is such a helping hand for me and my vehicle.
Trishna
Odapadaa, December 22, 2020
Secured payment gateway
The payment gateway of the policybazaar is superb and very transparent in nature. It is very much secured.
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