Car Insurance

Car insurance offers financial security in the event of road accidents, fire incidents, theft, human-induced disasters, natural calamities, and total loss situations. Having car insurance coverage can prove invaluable to policyholders during these challenging circumstances, significantly alleviating the expenses related to car repairs and replacement of automotive parts.

In India, it's mandatory for all vehicles plying on the country's roads to have insurance coverage. The necessity for insurance has grown substantially in recent times due to the surging number of vehicles on Indian streets. It's imperative to consider the potential accidents that may occur and pose a threat to your vehicle.

India’s Best Car Insurance Companies in 2023

Discover the leading car insurance providers in India for 2023 and explore their top-notch car insurance policies.

Note: Please be aware that there is a GST update: As of July 1, 2017, a GST of 18% is applicable to car insurance.

What are the Characteristics of Auto Insurance?

Here are the main features of car insurance:

• 24/7 Roadside Assistance: Car insurance includes round-the-clock roadside assistance, which covers breakdowns and accidents.
• Zero Depreciation Cover: Car insurance plans offer a zero depreciation cover that compensates for the loss in your car's value due to factors like wear and tear and age.
• Personal Accident Cover: Car insurance plans also provide personal accident coverage. In the event of an accident leading to injuries or death, the insurance company covers the associated expenses.  

What Does a Car Insurance Policy Cover?

• Protection for vehicle damages
• Coverage for damages caused by natural disasters
• Personal accident coverage
• Compensation for damages resulting from man-made disasters
• Theft protection
• Property damage coverage 

What Is Typically Excluded from Car Insurance Coverage?

• Damages to the vehicle during illegal activities.
• Accidents considered fraudulent by the insurer.
• Damages resulting from driving under the influence of alcohol or drugs.
• Damages caused by an unlicensed or underage driver.
• Damages incurred while breaking traffic rules.

Note: Please note that the specific exclusions may vary among insurance policies, so it's important to carefully review the terms and conditions when purchasing one.

Do You Understand the Importance of Car Insurance?

Here are the reasons why car insurance is crucial:

• Mandatory by Law:

The Motor Vehicles Act, 1988 mandates car insurance for all vehicles on Indian roads. Driving without insurance can lead to penalties and even the suspension of your driving privileges.

• Protection for You and Your Vehicle:

Comprehensive car insurance covers both third-party damages and injuries as well as damages to your own vehicle. It also includes coverage for damages from fire, natural disasters, acts of terrorism, riots, or strikes.

• Financial Support for Your Family:

Many car insurance plans offer personal accident coverage. In the unfortunate event of the policyholder's or their family members' death, the insurance company provides compensation to help the family manage their expenses.

• Legal Costs Coverage:

Accidents often involve legal proceedings that can be time-consuming and expensive. Car insurance can cover the legal costs associated with lawsuits, saving you a significant amount of money.

• Third-Party Damages or Injuries:

Basic third-party insurance policies cover expenses related to damages or injuries caused to third parties. If you have insurance, the company will pay for hospital bills and repair costs in the event of a traffic collision involving another vehicle, a pedestrian, or someone else's property.

Points to Consider When Selecting a Car Insurance Policy

When choosing a car insurance policy, it's important to keep the following factors in mind:

• Compare Car Insurance Plans:

Take advantage of the convenience of online car insurance comparison. Insurance companies provide free quotes, allowing you to compare policies based on quotes, services, and features. This helps you make an informed decision that aligns with your requirements.

• Assess Your Needs:

Evaluate your needs based on your vehicle type, usage patterns, and potential risks you may encounter. Tailor your insurance policy to your specific needs to avoid overspending on unnecessary coverage.

• Check for Add-On Covers:

Add-on covers enhance your policy's coverage. While purchasing car insurance, consider the additional coverage options available for an extra cost. Be selective and choose only the add-ons that are relevant to you.

• Verify the Insured Declared Value (IDV):

The IDV represents the approximate market value of your car and the maximum amount you will receive from the insurance company in the event of total loss or irreparable damage. Ensure that the IDV aligns with your vehicle's current value when purchasing the policy.

• Check Customer Support:

Select an insurer with 24/7 customer support to ensure you can access assistance whenever you need it. This responsive customer service can be invaluable in times of need.

Types of Car Insurance Policies

Car insurance policies in India come in various types to suit different needs. Here are the five primary types of car insurance coverage available, and you can further enhance protection by adding optional add-ons based on your requirements:

• Third-Party Liability Only Cover
• Collision Damage or Own Damage (OD) Cover
• Personal Accident Cover
• Zero Depreciation Cover
• Comprehensive Car Insurance

Comparing Third-Party and Comprehensive Car Insurance

The table below highlights the distinctions between third-party insurance and comprehensive car insurance: 

Car Insurance Add-On Covers

You have the option to enhance the coverage of your car insurance policy by adding the following additional covers:

• Zero Depreciation Cover
  By opting for this coverage, you ensure full reimbursement for the replacement cost of car parts damaged in an accident. Typically available for the first three years from the date of purchase, the cost of this cover increases as the car ages.
• Roadside Assistance Cover
  In the event of an emergency while driving in remote areas, roadside assistance cover provides access to services that can promptly resolve your issues.
• Personal Accident Cover
  This cover offers protection to the car owner in case of accidents. If the car owner is driving and encounters an accident resulting in irreparable limb damage or death, they will receive 100% of the claim amount.
• No-Claim Bonus
  Policyholders who do not file any insurance claims during a policy year are rewarded with a no-claim bonus. This cover offers discounts of up to 50% on the premium payment for the following year.
• Engine and Electronic Circuit Cover
  This add-on protects both the vehicle's engine and electronic circuits. Standard auto insurance policies do not cover damage caused by attempting to start the engine after flooding, making this cover essential.
• Loss of Belongings
  With this cover, you can file claims for the loss or theft of personal belongings. If, for instance, you leave your laptop or valuable equipment in your locked car and it is stolen, this cover will partially or fully reimburse you for the loss.
• Daily Cash Allowance
  If your vehicle is kept in a garage for an extended period, the daily cash allowance cover will cover your transportation costs. However, this cover is less popular among Indian car owners as most repairs are completed within a day or two.
• Key Replacement
  A key replacement policy ensures that you are compensated for the cost of replacing lost or misplaced car keys. Keep in mind that not all insurance companies cover the entire cost of a new key.

It's important to carefully consider these add-on covers, as they not only provide protection when needed but also reduce potential expenses. However, not all add-ons may be relevant to your specific situation, so choose the ones that best suit your needs.

Factors Influencing Car Insurance Premium

Several factors impact the premium you pay for car insurance:

• Insured Declared Value (IDV)
  IDV represents the current market value of your car. It considers depreciation, and a higher IDV leads to a higher insurance premium.
• Car Owner's Driving Record
  Your driving history plays a crucial role in determining your car insurance premium. A clean record usually results in lower premiums.
• Make and Model of Your Car
  The type and model of your vehicle also affect the premium. Sports cars and high-performance vehicles generally come with higher premiums.
• Safety Features
  Vehicles equipped with effective anti-theft devices or auto locks can qualify for premium discounts. These safety features reduce the risk of theft or damage.
• Coverage Required
  The extent of coverage needed influences your premium. Comprehensive insurance, which covers more risks, typically comes with higher premiums compared to basic third-party insurance. Additional coverage like zero depreciation or increased third-party liability also affects the premium.
• Claim History
  Your claims history impacts your car insurance cost. Insurers offer a No Claim Bonus (NCB) to policyholders who haven't filed claims during the policy year, resulting in discounts on the next year's premium.

Calculating Your Car Insurance Premium

When determining your car insurance premium, insurance providers consider several key factors:

• Type of Vehicle
  The make and model of your car significantly influence the premium. High-end or luxury cars typically have higher premiums than standard vehicles.
• Age of the Vehicle
  The age of your car plays a role in premium calculation. Older cars may have lower premiums, while newer cars with higher values can result in higher premiums.
• Geographical Location
  Your location matters because different areas may have varying levels of risk. Urban areas or regions prone to accidents or theft may have higher premiums.
• Insured Declared Value (IDV)
  IDV reflects the current market value of your car. A higher IDV leads to a higher premium, as it implies a greater cost to replace or repair the vehicle.
• Cubic Capacity of the Engine
  The engine's cubic capacity, also known as engine displacement, affects the premium. Vehicles with larger engines often have higher premiums due to increased power and potential for faster speeds.
• Regional Transport Office (RTO)
  The location of your vehicle's registration with the Regional Transport Office can influence the premium. Different RTO regions may have varying premium rates.

Purchasing Car Insurance Online - A Step-by-Step Guide

If you're looking to buy car insurance online, simply follow these straightforward steps:

Step 1: Research and Identify a Suitable Car Insurance Provider that aligns with your requirements.

Step 2: Visit the official website of your chosen car insurance provider and browse through their available insurance plans.

Step 3: Once you've decided on a plan, begin the application process by filling in all the necessary details as prompted by the website.

Step 4: After completing the application, submit the form and proceed to the secure online payment gateway.

Step 5: Make the payment using your credit or debit card, following the provided instructions.

Step 6: Once the payment is successfully processed, you'll receive your policy document from the insurer via your registered email address.

Renewing Car Insurance Online - A Step-by-Step Guide

To renew your car insurance online, follow these simple steps:

Step 1: Go to the car insurance renewal section on your insurer's website.

Step 2: Provide the required details such as your name, date of birth, policy number, etc., and click submit.

Step 3: Choose the car insurance plan you want to renew.

Step 4: If needed, select any additional add-on covers or riders.

Step 5: The screen will display the payable premium amount.

Step 6: Complete the premium payment using options like net banking, debit card, or credit card.

Step 7: Once your payment is processed, your car insurance will be successfully renewed.

Car Insurance Claim Process for Own Car Damage

Here's a step-by-step guide for claiming car insurance for damages to your own car:

Step 1: Promptly contact your insurance provider when you're involved in an accident or notice damage to your car. Complete the necessary claim form, which can usually be found on your insurer's website, and submit it along with the required documentation.

Step 2: An insurance surveyor will be dispatched to assess the damage to your vehicle. The surveyor will prepare a report and submit it to your insurance company. You'll receive a copy of this report.

Step 3: After your car is repaired, collect the duly signed forms and documents from the garage and hand them over to the surveyor, who will forward them to the insurer.

Step 4: In the case of cashless claims, if the documents and the claim are approved, the insurer will issue a Delivery Order (DO). You can then retrieve your car after settling the repair bills.

Step 5: If you've paid for the repairs upfront, you can submit the bills to the insurer for reimbursement. Depending on the terms and conditions of your auto insurance policy, you may be eligible for a refund of these expenses at a later date.

Car Insurance Claim Process for Third-Party Claims

Here is the step-by-step process for filing a third-party car insurance claim:

Step 1: If you receive a legal notice from a third party seeking compensation for damages for which you are liable, immediately inform your insurer. It's crucial to contact your insurance before engaging with the third party, agreeing to any out-of-court settlements, or assuming any financial responsibilities.

Step 2: Send a copy of the legal notice received to your insurance company.

Step 3: Provide the insurance company with copies of the First Information Report (FIR), your driver's license, and your vehicle's Registration Certificate (RC) book.

Step 4: After reviewing the provided documents and accident details, your insurance company will assign a lawyer to represent you, if deemed necessary.

Step 5: If the court rules that you are responsible for covering the damages to the third party, your insurer will make the payment to the third party on your behalf.

Car Insurance Claim Process for a Stolen Car

Here's how to go about the car insurance claim process for a stolen car:

Step 1: In the event of your car being stolen, you must promptly file a First Information Report (FIR) by visiting the nearest police station and registering your complaint.

Step 2: Provide a copy of the FIR to your insurance company.

Step 3: Once you receive the final police report, make a copy and forward it to your insurance company. They will assign an investigator to assess the situation.

Step 4: After your claim is approved, you should submit your stolen car's Registration Certificate (RC) book to your insurer.

Step 5: The ownership of the car will be transferred to the insurance company.

Step 6: Provide the replica car keys and a subrogation letter to the insurance provider. Additionally, the insurance company should receive a notarized indemnification document on stamp paper.

Step 7: After completing all necessary formalities, the insurance company will disburse the claim amount to you.

Documents Required for Filing a Car Insurance Claim

To file a car insurance claim, you will need to provide the following information and documents to your insurer:

• Name of the insured individual.
• Policy number.
• Contact number.
• Date and time of the accident.
• Vehicle registration number.
• Make and model of the car.
• Description of the accident, including the location and extent of loss.
• Name and contact information of the garage where repairs will be conducted.
• A brief description of the accident circumstances.

Common Car Insurance Terminology Explained

Let's delve into some key terms related to four-wheeler insurance that are important to understand:

• Comprehensive Coverage: Comprehensive coverage, often referred to as "comprehensive car insurance," is a type of auto insurance that goes beyond covering collisions with other vehicles. It is designed to protect you from various risks, such as damage to your car from non-collision incidents. You can choose to add comprehensive coverage to your standard auto insurance policy based on your needs and your vehicle's value.
• Third-Party Liability Coverage: Third-party liability coverage is a fundamental aspect of auto insurance that provides financial protection if you cause harm to another person's life or property while driving. This policy covers expenses related to legal claims, medical bills, and property damage resulting from accidents you are responsible for. It applies when you are found at fault for causing bodily injury or property damage to another party in a car accident. It does not cover your own injuries or vehicle damage.
• Car Insurance Premium: A car insurance premium is the amount of money you pay to an insurance provider in exchange for the coverage and protection offered by your auto insurance policy. It is typically paid regularly, such as monthly or annually, and the premium amount is determined based on various factors considered by the insurance provider. These factors help assess the level of risk and likelihood of claims associated with you as a policyholder.
• Deductibles: Deductibles are the portion of a claim's cost that you agree to pay before your insurance coverage kicks in. In auto insurance, deductibles apply mainly to collision and comprehensive coverage, which are optional types of protection for your own vehicle. Liability insurance, which covers harm to others and their property when you are at fault, typically does not have deductibles.
• Cashless Garages: Cashless garages, also known as network garages, have arrangements with insurance companies to offer direct billing and payment services for repairs covered by a policyholder's motor insurance. When you choose a cashless garage for repairs, you don't have to pay the repair charges upfront and seek reimbursement from the insurance company later. Instead, the garage and the insurance provider handle the payment process directly, providing greater convenience for policyholders.
• No Claim Bonus (NCB): No Claim Bonus (NCB) is a discount or incentive offered by insurance companies to policyholders who do not file any claims during a specified policy period. It is a strategy employed by insurance firms to reduce insurance costs for customers with a history of safe driving and responsible behavior. Policyholders accumulate NCB by going claim-free for a specific period, typically starting from the policy purchase date and increasing each year without a claim.

Detailed Information on Popular Car Insurance Providers

• Royal Sundaram General Insurance:

• Royal Sundaram General Insurance offers a variety of insurance products through its extensive network of 158 branches across India.
• Key features include swift claim settlement, competitive premiums, and access to over 3,300 cashless garages for policyholders.
• Royal Sundaram Car Insurance boasts a commendable Claim Settlement Ratio of 92.66%.
• Additional advantages include minimal documentation, personal accident coverage up to Rs. 50 lakh, round-the-clock assistance, and a range of add-on covers.

• HDFC ERGO General Insurance:

• HDFC ERGO General Insurance provides car insurance policies starting as low as Rs. 2,072.
• The insurer boasts a vast network of over 6,800 cashless garages spread across the country.
• Offerings include third-party car insurance, comprehensive car insurance, private bundle car policies, and standalone own damage cover.
• With a Claim Settlement Ratio of 91.23%, HDFC ERGO's car insurance offers swift claims settlement, overnight repair assistance, add-on covers, and various other benefits.

• IFFCO Tokio General Insurance:

• IFFCO Tokio General Insurance offers a diverse range of insurance plans tailored to meet the needs of individuals.
• The insurer is known for its affordable car insurance plans and 24x7 assistance, ensuring claims are settled within four hours.
• IFFCO Tokio car insurance boasts an impressive Claim Settlement Ratio of 92.65%.
• The insurer's extensive network comprises more than 4,300 cashless garages, making the claim process seamless.

• The Oriental Insurance Company:

• The Oriental Insurance Company, established in 1947, operates from over 1,800 offices throughout the country.
• It offers specialized insurance products designed to address the unique requirements of both urban and rural populations.
• The company maintains a Claim Settlement Ratio of 91.76%.
• Oriental Insurance's car insurance policies come with premium discounts, third-party coverage, and various add-on options.

• Tata AIG General Insurance:

• Tata AIG General Insurance provides a wide array of insurance products to cater to the diverse needs of its customers.
• Their car insurance plans offer potential savings of up to 75% on premiums.
• The insurer boasts an impressive Claim Settlement Ratio of 90.45%.
• It offers a total of 13 add-on covers and has an extensive network of over 5,400 cashless garages to ensure a smooth and swift claims settlement process.