Know How to Read & Understand Your Car Insurance Policy

If you own a car or planning to purchase one then you must know that getting it insured with an insurance policy is mandatory in India.  It protects you from any kind of liability in case of an accident. There are mainly two types of insurance plans, one is third-party and the other one is comprehensive. The insurer and customer come down to a common and specific understanding that is written in a very detailed manner under legal terms. Hence it is important to understand the car insurance policy properly. Here are the things that you must understand about your insurance plan.

Read more

Stay home & renew car insurance in 2 minutes

No documents required
View Instant Quotes
Get Car Insurance starting
@ only 2072/year*
  • Save up to 80%* Lowest Car Premiums

  • 20+ Insurers To Choose From

  • 25 Lakh+ Vehicles Insured

*TP price for less than 1000 CC cars. All savings are provided by insurers as per IRDAI approved insurance plan. Standard T&C apply.

Primary Insurance

Primary insurance refers to a printed copy of the insurance plan that you get when you buy a particular policy. It contains all the lists of coverage like liability, comprehensive coverage, exclusions, etc. You must know that this document contains all kinds of coverage that insurance plan offers even you haven’t purchased it. The policy document clearly defines who is insured and the terms and conditions that will contribute at the time of raising a claim and the exclusions under which the car insurance company will not pay.

For example, Recently Madras High Court has made Bumper to Bumper (i.e. Comprehensive insurance) mandatory for all the new vehicle buyers to purchase and continue for at least 5 years. It is because when the judge got to know that people do not understand about the policy and do not know the basic difference between the third party and comprehensive plan made him take this decision.

Endorsements Documents

When you purchase the insurance policy, you get a set of additional documents as known as endorsements. The primary policy is created by the insurance company and given to the customer, irrespective of the state he is living. The rules and regulations of the insurance policies vary from one state to another.

This is why insurance companies that provide car insurance include the endorsements that add some conditions to it as well as remove some from the main documents of the policy. This happens to make sure that your policy abide by the rules of your state.

For example, if you policy documents states that you have to raise a claim within 60 days of the accident and you state allow a minimum of 90 days then the insurer will provide you an endorsement with primary policy. This endorsement document will declare that customer living in you state can raise the claim within 90 days opposing the 60 days mentioned in the document of the policy.

Most insurance companies do not regularly update the primary policy documents. This is why the insurance companies send additional endorsement document multiple times in a year as per their local insurance laws. Hence it is important that you read the endorsement documents carefully and stay updated with the changes made in primary policy.

Review Declaration

The primary policy and endorsement documents provide a proper description of all the coverage provided by your insurer. Whereas declaration page is specifies the coverage that you have purchased as well as the restrictions under the plan, the declaration page also varies from one state to another and it contains the following information:

  • Name of the person insured and vehicle covered under the policy
  • Type of coverage provided under that particular plan
  • Limitation and premium of every coverage
  • Surcharge, discount, endorsement as applicable
  • Deductible amount

Deductibles amount is the minimum amount of damage that the car should have faced to get compensation by the insurer. For example, If you insurance policy has a deductible amount of Rs. 2000 then you will have to pay Rs. 2000 in the first place for any damage caused to your vehicle in an accident. Once you make this payment, you insurer will provide you the compensation for all the remaining dues. Once the insurer reaches the insurance coverage amount, you will not be provided with any more compensation amount.

Inclusion & Exclusion

Inclusion is the section of the insurance policy document for which the car insurance policy provides cover. For example, the covers provided by car insurer are theft, natural calamity, third-party liability, manmade disasters, etc. While purchasing the insurance policy, it is important for the buyer to learn about the kind of coverage that particular insurance plan is providing. This way in case of an accident you would know that you will get coverage for that particular damage or not.

Similarly the exclusion section of the policy states all the scenarios that are not covered by that particular insurance plan. For example, normal exclusion under a car insurance policy are as follows:

  • If an accident takes place and the driver is under the influence of alcohol, the insurer will not provide cover for the damage or loss.
  • If an accident takes place and the insurer finds out that the driver was driving without license, the insurer will not provide cover.
  • In case of damage or loss caused to the car during a terrorist activity or war like situation. The insurer will not provide cover for it.

If the vehicle is used commercially or business requirement or a rental car as well as in an anti-social activity, the insurer will not provide cover for it and you will have to purchase another insurance plan that provides cover for the commercial vehicles.


Selecting the perfect car insurance policy for yourself is important. Since you invest so much in your car then protecting it with car insurance plan is a must. While purchasing an insurance plan it is vital to read it carefully and understand the inclusions, exclusions, claiming process and all kinds of terms and conditions related to it. Also, purchasing the insurance online would be better than purchasing the policy offline because you can calculate the insurance premium amount as well as compare different plans and choose the one that suits your needs while sitting at the comfort of your home without going to the office or paying the insurance agent’s fee.

Written By: PolicyBazaar - Updated: 07 September 2021
You May Also Like
  • Transferring Car Insurance from One Person to Another

    Transferring Car Insurance from One Person to Another In the current economic climate that encourages consumers to “reduce, reuse and recycle”, it is becoming increasingly common for people to purchase second-hand...

    read more
  • 9 Secrets That Your Motor Insurance Provider Won’t Tell You

    9 Secrets That Your Motor Insurance Provider Won’t Tell You Due to the dangerous driving conditions, it is compulsory to have third party insurance for every vehicle plying on Indian roads. It ensures the overall saf...

    read more
  • Money Saving Advice for All Car Owners

    Money Saving Advice for All Car Owners After a dream home, a dream car is your second-largest purchase that you make in your lifetime. But the expense does not cease when you drive off the car dealer's lot. Read mor...

    read more
  • Difference Between Comprehensive Insurance and Third Party Insurance

    Difference Between Comprehensive Insurance and Third Party Insurance Comprehensive insurance is insurance coverage that pays for the repair or replacement of vehicle damages resulting from an incident. Comprehensive ca...

    read more
  • Types of Motor Insurance

    Types of Motor Insurance The word Motor broadly covers a lot of classes of vehicles plying on the roads. These may be two-wheelers like scooters and motorbikes, three-wheelers or four wheelers like private cars, jeeps, ...

    read more
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Calculate your car IDV
IDV of your vehicle
Calculate IDV
Calculate Again

Note: This is your car’s recommended IDV as per IRDAI’s depreciation guidelines.asdfsad However, insurance companies allow you to modify this IDV within a certain range (this range varies from insurer to insurer). Higher the IDV, higher the premium you pay.Read More

Policybazaar lets you compare premium prices from 20+ Insurers!
Compare Prices