Motor Insurance

Motor insurance is mandatory for all the vehicles that are plying on the road. Its main objective is to give complete protection against physical damage or loss from natural and man-made calamities. Vehicle insurance is the most important document for all the vehicle owners/drivers. It offers protection against bodily injuries, death, physical damage and third-party liabilities. Moreover, it ensures peace of mind and security.

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 to 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

    It provides protection to bikes and scooters. The features of the two-wheeler policy are similar to car insurance.

  • 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.

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Types of Motor Insurance Policies in India

  • Third-Party Insurance Policy

    It covers a third person who has been injured in an accident involving you and your car. 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 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 kilometers driven. The policy premiums are to be decided at the time of buying the policy depending on the declared distance by the insurance seeker he/she expects to drive in a policy tenure. Pay As You Drive policy offers bt 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.

Inclusions: 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

Exclusions: 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 vehicle is used for illegal activities or for 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

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 vehicle
  • The profession of the person
  • Geographic location

FAQ's

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

    Ans: Having a third-party insurance plan is compulsory for all automobiles plying on the Indian roads. This insurance plan provides the coverage arising out of 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 insurance plan. It provides the coverage for third-party liability along with own damage caused to the insured automobile.
  • Q: How is the insurance premium calculated?

    Ans: There are many factors such as IDV, deductibles, seating capacity, cubic capacity, previous insurance history etc. that affect the 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. Compare insurance premiums so that you get the best quote. Third-party premium amounts are decided by IRDA.
  • Q: What coverage would meet my insurance needs?

    Ans: The sum insured for the automobile is Insured’s Declared Value. It reflects the present market value of the automobile. If you buy a third party 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 the due date in order to avoid any lapse in the policy. For a smoother insurance experience always pay the insurance premium before the due date. If your policy has lapsed then the automobile would undergo an inspection. In addition to that, if a comprehensive insurance policy remains lapse for a time period of more than the benefit of “No Claim Bonus” isn’t provided.
  • Q: What is "No Claim Bonus"?

    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 percent 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 automobile. 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 insurance provider, would my No Claim Bonus be migrated?

    Ans: Yes, you surely can avail the NCB if you change your insurance provider at the time of renewing the policy. All you would need to do is producing a 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 as per 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, installment of any anti-theft equipment that is approved by the Automobile Research Association of India (ARAI), Pune and its installation is acknowledged by AAI. There are concessions offered specifically for especially 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 additional voluntary deductible, your insurance provider offers you attractive discounts. As per the Liability Only Section, there are discounts available for the decreasing the third-party property damage from Rupees 750,000 to Rupees 6,000.
  • Q: Is service tax applicable on the motor insurance premium?

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

    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 that range from Rupees 50 for the two-wheeler automobile to Rupees 500 for private four-wheelers and commercial automobiles 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 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 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 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 the 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 a 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 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 Own Damage Section.
  • Q: Can I get my 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 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 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 insurance policy, would I get a duplicate copy?

    Ans: Yes. You have to approach the office of your 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 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. 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.

News

  • 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: 30 September 2020
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 284 Reviews)
(Showing Newest 15 reviews)
Sarfaraz
East Singhbhum, September 25, 2020
Would recommend
I have recently recommended one of my friend about the motor insurance policy from the policybazaar. I like the services. Thank you team.
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Farenda, September 25, 2020
Secured plans
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Modasa, September 25, 2020
Man-made disasters
I have got the motor insurance from the policybazaar and it has given me the man-made disasters coverage such as curfew, riots, accident etc. Thank you policybazaar.
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Sabarkantha, September 25, 2020
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Dadengiri, September 25, 2020
Premium calculator
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Sarasija
Sabang, September 25, 2020
Mobile application
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Dabugam, September 25, 2020
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Sarang
Maanikpur, September 25, 2020
Pay online
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Vadali, September 25, 2020
Budget friendly
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Fakirpur, September 25, 2020
Comprehensive plans
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Sachin
Udagamandalam, September 24, 2020
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Sachetan
J.n.prasad, September 24, 2020
Customer record
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Sachet
Quilandy, September 24, 2020
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Sabhya
Waghai, September 24, 2020
Natural disaster
I have taken the motor insurance policy and it has the coverage for the natural disaster problems such as cyclone, earthquake, etc. Thank you policybazaar.
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Baarod, September 24, 2020
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