Car Insurance is a type of motor insurance policy that protects a car from any unavoidable dangers that may lead to monetary losses. It is a risk-sharing contract between the motor insurance company and the car owner where the former promises to pay for the repairs/ replacement of the car in exchange for a premium. A car insurance policy provides coverage against any risks or dangers arising out of accidents, third party liabilities, theft, manmade calamities, fire, natural hazards, etc. resulting in damages or loss of the car.
It is mandatory to buy car insurance in India irrespective of the vehicle type, i.e. personal or commercial vehicle. The insurers compensate for the loss or damage caused to the insured vehicle and a third-party from the insured four-wheeler. Here are some of the reasons to buy new car insurance policy in India in addition to it being a mandatory requirement as per the Motor Vehicle's Act:
Moreover, the premium amount of your 4-wheeler insurance is decided based on the Insured Declared Value or IDV of the vehicle. If you increase the IDV, the premium rises and if you lower it, the premium reduces.
It is important for any policyholder to compare various car insurance plans options before going for 4-wheeler insurance renewal or buying a new policy. Compare various 4-wheeler insurance plans online on Policybazaar and buy the one that fulfills your expectations hassle-free:
There are 3 types of car insurance policy that are available in India –
A comprehensive car insurance policy provides coverage for third party liability as well as damages caused to your own car. In comparison with third party liability car insurance, a comprehensive four wheeler insurance policy offers extensive coverage, more benefits and covers the damages caused to the insured car in case of an accident, collision, theft, etc.
A comprehensive policy can be further extended by opting for add-ons like accessories cover, engine protector, zero depreciation cover, medical expenses, etc. This type of coverage is the most popular as it offers end-to-end coverage and thus less stress for the policyholder.
Third party car insurance safeguards you from any legal liability due to your own car’s involvement in an accident. Your insurance provider will compensate you for death, disability, injury, or property damage to any third-party. Therefore, you are protected from the financial liability towards the third-party.
Third-party Liability Car Insurance price is a mandate in India under the Motor Vehicles Act, 1988.
|Engine Capacity||Third-party Liability Car Insurance Price Effective June 16, 2019 (Rs.)|
|Less than 1000 CC||2,072|
|More than 1000 CC & less than 1500 CC||3,221|
|More than 1500 CC||7,890|
Also known as usage-based motor insurance, this insurance policy allows the insured to pay the insurance premiums as per the kilometers driven. This newly introduced product likely to be helpful for those with multiple cars not all of which are used so frequently. As per the IRDA guidelines under the Sandbox project, a few insurers such as Bharti AXA, Acko General, ICICI Lombard have started offering Pay As You Drive insurance policy, through their website, online aggregators websites, agents or other distribution channels. The policy offers comprehensive coverage for own damage and third-party liability on a pilot basis for a term of one year. The policy seeker will have to declare the distance he/she expects to travel during a policy year and based on that premiums for Pay As You Drive policy will be decided. However, the insurers have come up with 3 slabs for distance covered -Rs 2,500 km, 5,000 km and 7,500 km.
The following table shows the complete list of the best car insurance providers in India with their personal accident cover and the number of network garages:
|Car Insurance Companies||Network Garages||PA Cover Owner/ Driver|
|Bajaj Allianz||4000+||Up to Rs. 15 lakhs|
|Bharti AXA||5200+||Up to Rs. 15 lakhs|
|Cholamandalam||6900+||Up to Rs. 15 lakhs|
|Digit||1400+||Up to Rs. 15 lakhs|
|Edelweiss||1000+||Up to Rs. 15 lakhs|
|Future Generali||2500+||Up to Rs. 15 lakhs|
|HDFC ERGO||6800+||Up to Rs. 15 lakhs|
|IFFCO Tokio||4300+||Up to Rs. 15 lakhs|
|Kotak Mahindra||1000+||Up to Rs. 15 lakhs|
|Liberty||4300+||Up to Rs. 15 lakhs|
|National||N/A||Up to Rs. 15 lakhs|
|New India Assurance||1100+||Up to Rs. 15 lakhs|
|Oriental||N/A||Up to Rs. 15 lakhs|
|Reliance General||3700+||Up to Rs. 15 lakhs|
|Royal Sundaram||4600+||Up to Rs. 15 lakhs|
|SBI||5400+||Up to Rs. 15 lakhs|
|Shriram||1500+||Up to Rs. 15 lakhs|
|Tata AIG||N/A||Up to Rs. 15 lakhs|
|United India||700+||Up to Rs. 15 lakhs|
|Universal Sompo||N/A||Up to Rs. 15 lakhs|
It is not only because of the law but for the benefit of your vehicle, it is good to get it insured. Whether you purchase a new car or old second-hand vehicle, its insurance is needed always. A third-party car insurance policy provides protection against liabilities (legal and financial) towards a third-party.
However, you can buy a comprehensive cover as well that not only provides third-party coverage but protects your vehicle against damage or loss. Here are a few benefits of having a car insurance policy:
Finding the best car insurance can be a great deal, as this is a yearly investment that you make to cover the risks while driving on the road. The market is bursting with numerous four wheeler insurance plans providing value-oriented services to its customers. And it can get quite confusing to find the best car insurance policy online?
This checklist of the best car insurance companies in India will help you compare different quotes from various insurance companies online and select the best deal for yourself. You can check out this list of the best four wheeler insurance plans for 2020, by analyzing their features including the incurred claim ratio, network garages, and the coverage benefits.
Add-on covers are the additional covers or protection that you include in your 4 wheeler insurance plan to keep your car safe from any damages or total loss. The add-on covers need to be purchased on payment of extra premium amount. Following some add-on covers are No Claim Bonus Protection cover, Zero Depreciation cover, Engine Protection cover, Key protection cover, etc.
No Claim Bonus Protection Cover
For every claim free year, the insured is rewarded with a discount on the renewal premium. This discount is called - No Claim Bonus (NCB). It is cumulative and increases every year. It usually ranges from 10% to 50% and can save a substantial amount of money on the premium payable for your auto insurance.
Let's take an example if a policyholder doesn't make a claim during the tenure of his auto insurance policy, he becomes eligible for No Claim Bonus, on the basis of which, a certain rebate is offered on the payable premium. With No-claim-bonus protection cover you can retain your NCB even after registering a claim during the policy term. The terms and conditions vary from one insurer to another.
Engine Protection Cover
An engine is one of the most important parts of a car. And engine protection cover compensates the cost of fixing the indirect damage that are caused to the engine due to lubricating oil leakage and water ingression. It covers the Gear Box Parts, Engine Parts, and DifferentialParts.
Zero Depreciation Cover
This additional feature offers compensation even for the depreciating value of your car. With this feature, you will not have to pay for the depreciation value of your vehicle’s parts. It is mostly valid on private cars and is subjected to a specific number of claims during the policy period. Compulsory and voluntary deductibles (as per the case) will be applicable despite zero depreciation cover. You can check with the insurance company for any terms and conditions before making the purchase.
Sometimes, a bunch of unforeseen expenses can drain all your savings. Consumables Cover. Includes all the expenses incurred on consumable items for any perils that are covered under the policy. Consumable items include screws, nuts and bolts, washers, AC gas, grease, lubricants, bearings, clips, engine oil, distilled water, oil filter, brake oil, and fuel filter are mostly covered.
There are certain terms and conditions that are applicable to this add-on cover that varies from one insurance provider to another. It is mostly valid on private cars and is subjected to a particular number of claims during the policy period. You can check with the insurance company before making the purchase.
Key Protection Cover
Once in a lifetime everyone would have lost or misplaced their car keys. In such cases, the insurer can offer you the financial help by covering the costs incurred on replacement and repair of your car keys. Here’s was Key Protect Coverwill offers.
Daily Allowance Benefit
In case of accidental damage, you might have to leave your car in the workshop and travel on your own. This add-on cover comes to your rescue when your vehicle is parked in the garage after an accident for repair. If you have this add-on cover the insurer will provide you daily travel allowance if the vehicle requires has to be in the garage for more than 3 days (varies from insurer to another).
Personal Accident Rider Benefit
Personal Accident Rider is an optional add-on benefit that can be added to the comprehensive auto insurance by paying an extra premium. This rider provides the policyholder with the coverage of medical expenses due to damage, personal injury or disability caused due to an accident.
Cover for Car Accessories
By simply opting for separate add-on policy, you can avail the coverage for your car accessories, which a normal 4 wheeler insurance policy may not cover. Such additions may increase the premium, but it is always beneficial and cost-effective rather fitting a new car accessory.
Save Through Paying High Deductibles
Deductibles are a certain percentage of the claim amount that the insured has to pay from this own pockets. A policyholder can save by paying higher deductibles. At the time of filing a claim, if you choose to pay higher deductibles against your claim, your auto insurance provider manages to give you some discount on premium later on.
Following features are usually not covered in car insurance:
Car insurance cost is decided based on several factors. It is also easy to find out the car insurance premium using an online car insurance premium calculator. However, the insurance provider takes into consideration the following parameters before fixing the car insurance price:
IDV = Car's Showroom price + Accessories cost – depreciation value
Thus, the formula to calculate OD premium amount is:
Own Damage premium calculation formula:
Insured Declared Value X [Car Premium as per the insurer)] + [ Optional Benefits] – [NCB/Discount etc.]
It's mandatory to renew your car insurance to avail of the policy benefits without a break. Therefore, you should ensure your car policy before it gets expired. Follow the steps given below to renew your car insurance policy online:
You will receive the policy document for your renewed 4 wheeler insurance on your registered email id. You can also download a copy of the policy document and get a printout anytime you want.
A car insurance plan has a validity period and after its expiry, you need to renew it for keeping your car insured. You can renew your car insurance policy either offline or online. Even though many of us still follow the traditional method of offline renewal of the policy, but opting for online policy renewal is better. Here are a few benefits of renewing your car insurance policy online:
Buying car insurance online is a common practice today. If you are wondering why most people prefer to purchase four wheeler insurance online, check out its benefits below:
No More Agents
Offline purchase of insurance policies involve agents who try to sell their own product rather than suggesting you a better policy from another insurance provider. Online purchase of new car insurance will eliminate such agents and you can buy the best policy after comparing various plans offered by different insurance companies.
Another benefit of buying four wheeler insurance policy online is zero paperwork. Contrary to the offline mode which requires you to fill multiple forms, the online mode allows you to fill up all the forms online. You can also upload the required documents online making the application process digital and free of any paperwork.
Convenient & Saves Time/strong
As compared to the offline modes, buying 4 wheeler insurance online is very convenient. You don’t have to travel to a branch of the insurance company or take out time to meet the agent. You can get your car insured from the comforts of your home, hence, saving a lot of time and efforts.
Missing policy payments or renewals can cost you a great deal. Not only will you lose out on the renewal discounts but also have a break in policy. But if you purchase your four wheeler insurance policy online, you will receive timely reminders ahead of your due date ensuring that you do not miss out on the payments.
Buying 4 wheeler insurance online offers cashless facility and involves zero cash transaction. You can make payment of your insurance premium online through online modes such as debit card, credit card and internet banking.
With the online purchase of four wheeler insurance, you can easily compare the plans offered by different companies. Online aggregators allow you to compare the coverage and the premium quotes provided in different plans before selecting an ideal insurance policy for your car.
Buying insurance policy online is more economical as you save a lot of in-between costs. Your premium reduces due to elimination of agents, zero paperwork and you get discounts that further reduce the amount of premium you pay.
Endorsement refers to any changes in the information provided in the policy document. in case of online endorsements, you just have to give a self-declaration as opposed to the filling up the endorsement form manually and submitting all the documents.
Soft Copy of the Document
Another benefit of applying for car insurance online is that you have a soft copy of your policy document in your email. This makes it easy for you to access it from any place without the need to carry a hard copy with you.
The main difference between third-party car insurance and comprehensive car insurance is the cover they offer. On one hand where third-party insurance covers your car against any loss or damages to third-party. On the other hand, comprehensive car insurance provides coverage for own vehicle damage as well. Let us compare these two types of motor vehicle insurance policies:
|Parameter||Third-Party Car Insurance||Comprehensive Car Insurance|
|Coverage||This insurance plan covers damages and losses caused to third-party person, place, or property by the insured vehicle.||This insurance plan offers damages or losses incurred to the insured vehicle along with the third-party cover.|
|Is the coverage sufficient?||No, because the insured vehicle is still exposed to risks.||Yes, being comprehensive you can even add add-ons to make it more elaborative.|
|Is the facility of add-on provided?||Here the only add-on that is provided is – a personal accident.||You can add many add-ons in your car insurance comprehensive policy like roadside assistance, zero depreciation, cover for accessories, etc.|
|Which is affordable?||Third-party car insurance is the cheapest one because of its limited coverage. The price of third-party vehicle insurance policy is finalized by IRDAI, which is based on the cubic capacity of the vehicle.||The price of comprehensive car insurance is comparatively higher because of its vast coverage. The price of this policy is finalized by the insurance provider itself because of the inclusions and terms and conditions of the plan.|
Therefore, comprehensive car insurance is better than a third-party insurance cover because of the vast coverage provided by it. Moreover, you can customize your coverage by adding add-ons in your plan while a third-party car insurance plan leaves you exposed to risks like damaging your vehicle.
Let us elaborate these two to understand the difference more clearly:
Methods of Purchasing Comprehensive and Third-Party Car Insurance:
It is not at all difficult to get a car insurance policy. You can purchase it by any of the below-mentioned three methods:
All the car owners, at some point in time need to file a car insurance claim for a certain loss or damage. To avoid any confusion while filing a 4 wheeler insurance claim, here are a few points that you need to consider:
Keep the following documents ready while registering a claim with the Insurer-
The insurer will settle your claim within a week from the date of submission of all the required documents.
On PolicyBazaar you have to fill a few simple details like make of the car, model, variant, year of manufacture, etc. You will then get car insurance quotes from various insurance providers. This way you will get customized quotes, one which saves money on premiums and is also the best fit as per your needs.
You must be familiar with the following terms while filling the form:
Car Make, Model and Variant
This information is critical to calculating the base premium. A luxurious, powerful and expensive car will attract more premiums. For e.g. an SUV car will always have a higher premium than a family car.
Year of Manufacture
The manufacture year of your car lets the insurance company assess its Insured Declared Value (IDV) that facilitates the underwriter to decide the annual premium for your car.
CNG Fitted Car
Being more vulnerable to combustion, a CNG fitted car is usually insured at a slightly higher premium than a plain petrol/diesel car.
You need to mention whether you do or do not want to get a cover on electrical and non-electrical accessories fitted in your car. Most insurers provide a cover for your car accessories at an additional premium of 4% on its value.
|Age of the vehicle||Depreciation value in %|
|Not more than 6 months||5|
|More than 6 months but below 1 year||15|
|More than 1 year but below 2 years||20|
|More than 2 years but below 3 years||30|
|More than 3 years but below 4 years||40|
|More than 4 years but below 5 years||50|
For those vehicles which are obsolete or aged over 5 years, the depreciation applied varies from one insurer to another.