What is Car Insurance?
Car insurance is an agreement between the policyholder and the insurer in exchange for a nominal fee, known as the premium. In return for this premium, a car insurance company is liable to cover repair costs, legal expenses and even provide personal accident cover in various situations mentioned in the policy's terms and conditions. If an insured car is damaged or causes damage to a third party, policyholders can file a claim and receive compensation as per their policy.
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- What is Car Insurance?
How Does Car Insurance Work?
Car insurance works on a simple principle. The insurer protects the car against accidents, theft, fire, natural disasters or third-party liabilities once a claim is filed. The insurer then evaluates the damage, verifies the documents, and settles the claim based on the policy type, coverage limits, and deductibles. This reduces out-of-pocket expenses, as the insurance company bears the cost to accordance with the policy terms.
What Does Car Insurance Cover?
Car insurance covers the following damages and losses:
- All third-party, person and property damage is covered
- Damages caused by road accidents and collisions
- Death, injury, or permanent/partial disability of the owner-driver
- Damages or losses incurred due to fire, explosion, or self-ignition
- Damages caused by natural disasters, such as floods, earthquakes, landslides, cyclones, etc.
- Any damage incurred due to man-made disasters, such as terrorism, vandalism, riots, etc.
What Does Car Insurance Not Cover?
The following scenarios and losses are not covered under a car insurance policy:
- Damages caused when driving under the influence of alcohol or toxic substances
- Damages incurred when driving without a valid driver's licence
- Damages due to normal wear and tear of the insured vehicle
- Any damage caused due to mechanical or electrical failures
- Damages due to war-like situations or nuclear perils
- Damages occurred when driving with an expired vehicle insurance policy
Why is Car Insurance Important?
Car insurance not only protects you from financial or legal liabilities arising from third-party accidents, but a comprehensive car insurance policy also covers damages and injuries sustained by the insured vehicle and the owner-driver. Here are some of the common reasons to understand the importance of car insurance:
- Legal Mandate: According to the Motor Vehicles Act, 1988, it is mandatory for all vehicle owners to have at least third-party insurance to legally operate on Indian roads.
- Comprehensive Coverage: It offers an extensive coverage against several risks. The right type of insurance covers third-party damages and also damages caused to the insured vehicle.
- Financial Protection: Accidents can lead to expensive repairs and replacement. Car insurance covers these costs and helps in reducing any out-of-pocket expenses.
- Peace of Mind: Since your vehicle is fully covered and protected from unexpected emergencies, a motor insurance policy provides significant peace of mind while you are driving.
What are the Different Types of Car Insurance?
Insurance companies offer several types of car insurance. Here are some of the common types of car insurance plans:
| Type | Description |
| Third-party Insurance/Liability-only Policy | This is the most basic form of car insurance policy and only covers third-party liabilities |
| Standalone Own Damage (OD) Insurance | You can purchase this car insurance with a valid liability-only policy to cover damages caused to the insured vehicle |
| Comprehensive Car Insurance | This type of insurance provides extended coverage and covers both third-party liabilities and damages incurred by the insured vehicle as well |
How to Buy Car Insurance Online?
You can easily buy car insurance online in just a few minutes using the steps mentioned below:
- Step 1: Go to Policybazaar.com and select 'Car Insurance.'
- Step 2: Enter your car's registration number and fill out the form with all the required details.
- Step 3: Submit the form, and all the available plans will be displayed.
- Step 4: Select the add-ons, NCB, and IDV, and choose the one that fits your coverage needs and budget.
- Step 5: Check all the details and pay the premium amount via credit card, net banking, or UPI.
- Step 6: Once the payment is successful, your car insurance will be emailed to you instantly.
FAQs on What is Car Insurance?
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Q1. Is car insurance mandatory in India?
Ans: Yes. According to the Motor Vehicles Act, 1988, it is compulsory to have at least a third-party insurance policy to drive legally on Indian roads. -
Q2. What is zero-depreciation car insurance?
Ans: Zero depreciation is an add-on with a comprehensive car insurance policy that covers the cost of repairing or replacing damaged parts without deducting the depreciation cost, based on the vehicle's age. In simple words, if you raise a claim after an accident, the insurer will not deduct any depreciation and pay for the entire value of the repaired or replaced parts. -
Q3. How to renew car insurance?
Ans: You can use Policybazaar.com for car insurance renewal. Just visit Car Insurance' on the homepage. Enter your vehicle number and contact details to view car insurance quotes from various insurers. Select a policy that suits your needs and budget. Once you pay the premium amount, you will receive your renewed policy via email. -
Q4. What is the meaning of car insurance?
Ans: Car insurance is a contract between the insurer and the insured to offer coverage for several risks, such as accidents, collisions, third-party liabilities, theft, damages caused to natural disasters, etc. -
Q5. What is standalone own damage car insurance?
Ans: Standalone own-damage (OD) insurance is optional with a third-party car insurance policy. This type of insurance covers damages or losses to the insured vehicle due to accidents, natural disasters, man-made acts, fire, and theft, among others. -
Q6. What does a car insurance policy cover?
Ans: A car insurance policy covers the insured vehicle against damages, losses or liabilities caused by accidents, natural calamities, third-party/person and property damage, etc. It helps you stay legally compliant while safeguarding your finances in the event of a road accident, collision, or other similar incidents, and is also mandatory as per Indian Motor Laws. -
Q7. Does car insurance cover 100% damages?
Ans: No, a standard car insurance policy does not cover 100% damages. However, you must purchase the bumper-to-bumper or zero depreciation cover as an add-on with your comprehensive insurance to cover 100 of % costs incurred on repairing or replacing fibre, rubber, and metallic parts of the insured car. -
Q8. Is car insurance only for 1 year?
Ans: When purchasing a new car, you will need to buy a 3+1 car insurance policy. A third-party insurance is available for 3 years, whereas the comprehensive policy can only be purchased for 1 year at a time.
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#Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc
*Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.
+Savings are based on the maximum discount on own damage premium as offered by our insurer partners.
^Lowest Price Guaranteed is based on certifications shared by insurers with us. Policybazaar will facilitate price matching subject to the terms and conditions of select insurers.
##Claim Assurance Program: Pick-up and drop facility available in 1400+ select network garages. On-ground workshop team available in select workshops. Repair warranty on parts at the sole discretion of insurance companies. Dedicated Claims Manager. 24x7 Claim Assistance.
