How Does Car Insurance Work in India?
Owning a car in India brings a lot of freedom. You can travel wherever and whenever you want.
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What is Car Insurance?
Car insurance is a contract between you and an insurance provider. You exchange a payment (known as a premium) and the insurer guards against monetary loss in the event that your car is damaged or is stolen, or in the event that you injure another individual.
Is Car Insurance Mandatory in India?
Yes! According to the Motor Vehicles Act, 1988, having minimum third-party car insurance is a legal requirement if you wish to drive your car in India. Driving an uninsured car is illegal and will get you penalised, or even attract legal issues.
Types of Car Insurance in India
There are primarily two kinds of car insurance policies:
-
Third-Party Car Insurance
- This is the minimum & compulsory insurance as per Indian motor laws.
- It includes damage inflicted on another individual or their property by your car
- It does not cover your own vehicle's damage.
-
Comprehensive Car Insurance
This covers third party liabilities as well as damages to your own vehicle, offering coverage for:
- Road Accidents
- Natural disasters (such as floods or earthquakes)
- Fire
- Theft
- Vandalism
Most car users find this option more preferable since it gives a broader coverage.
How Does Car Insurance Work?
Here is a straightforward step-by-step explanation:
- Step 1: Select a Policy: Make a visit to a reputed website such as Policybazaar.com, compare and select as per your car and pocket.
- Step 2: Pay the premium: After you choose the policy, you have to pay the premium. You may either do this yearly or in other cases, month by month.
- Step 3: Obtain the Policy Document: Once you've paid, you're issued a policy document. That is proof that you have insured your car.
- Step 4: File a Claim When Necessary: In case your car is involved in an accident or is damaged, you may file a claim with the insurance company. You will require:
- A copy of your policy
- Your vehicle's number plate
- Facts surrounding the incident
- FIR (where necessary)
- Step 5: Obtain Repair or Reimbursement: The insurer may either:
- Direct payment to the garage (cashless claim), or
- Pay you back when you've settled the repair costs (reimbursement claim)
What is Not Included in Car Insurance?
Even a comprehensive car insurance policy has some exclusions. It typically does not cover:
- Damage if you are driving under an influence of alcohol or drugs
- Damage in case you were driving without a valid licence
- Normal wear and tear of the car
- Electric or mechanical failures
Add-Ons to Improve Your Car Insurance Coverage
Want extra protection? You may be able to include add-ons in car insurance. The essential & popular ones include:
- Zero Depreciation Cover: Complete claim without considering the depreciation value of your car or its parts.
- Loss of Personal Belongings: Offers reimbursement for the loss of your personal belongings destroyed in the car during a road accident.
- NCB Protection Cover: Keeps your NCB intact even if you raise a claim within your policy tenure.
- Consumables Cover: Coverage for the cost of repair/replacement of your car's components, such as nuts, bolts, screws, gear oil, engine oil, etc., due to an accident.
- Key & Lock Protection: Covers costs for replacing key & lockset if stolen or damaged.
- Daily Conveyance Cover: Pays for your commute in cabs while your car is being repaired.
- Engine & Gearbox Protection Cover: Protects against engine damage caused by floods or leaks.
- Roadside Assistance Cover: Assistance in the event your car breaks down.
- Return to Invoice Cover: Provides you the original invoice value of your car(RTO & registration fees) in case of vehicle theft or total loss.
Usage Based Insurance (UBI): Drive Less? Pay Less
Usage-based Insurance (UBI), commonly known as Pay As You Drive insurance or Pay How You Drive (PHYD) insurance, are new models in the motor insurance domain. Under PAYD insurance, you only pay the premium based on how much you drive rather than paying a flat amount. Besides, premium prices are also based on your driving behaviour (speed, acceleration, & braking patterns), which insurers track via a telematics device or mobile app.
PAYD insurance is a comprehensive type of car insurance policy, which means it covers both own damages and third-party liabilities. While the third-party premium will continue to abide by existing IRDAI rules, the own damage premium is determined by the number of kilometres you drive.
Hence, if you are someone who doesn't drive much, prefers public transport for daily commute, or owns multiple cars, you may benefit from a PAYD insurance policy. Since less driving implies a lower likelihood of road accidents, you may file fewer car insurance claims. This is where PAYD insurance becomes beneficial, helping you save on your premium amount.
Why Should You Compare Car Insurance Online?
All cars and drivers are not alike. While buying a car insurance policy, you would want to save on your premium cost. Your comprehensive car insurance premium price might vary between different insurers.
When you compare car insurance online, you get to choose a policy tailored to your specific requirements and budget. As a result, not only do you get value for your money, but you also know about the discounts offered by insurance providers. Therefore, while comparing & buying car insurance online at Policybazaar.com, you:
- Get the best premium
- Find a policy that is suited for your needs
- Save time & money
Final Words
Car insurance is not just a law-it's a wise choice to safeguard you, your vehicle, and other individuals on the road. Whatever car you drive, the right car insurance provides you with peace of mind whenever you get behind the wheels. So, if you haven't yet insured your car, or wish to upgrade your policy, visit Policybazaar.com and compare car insurance online and make an intelligent choice.
