Which Insurance Company Provides The Cheapest Car Insurance In India?

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Updated on Jul 13, 2022

Insurance Companies Providing Cheapest Car Insurance In India

Insurance is a compulsory for driving a car on the Indian roads and is a must for every car owner to have one for the vehicle. In India, as many as 25 companies of general insurance are offering car insurance policies. Of course, when it comes to buying a policy, everyone wants to have the best and cheapest car insurance plan offering maximum benefits. And with a wide array of options in terms of insurance providers, it becomes difficult for car owners to pick one best policy for their car.

However, here it is important to note that a car insurance plan depends on several things. Thus it is difficult to compile a list of the insurance providers in India offering most cost-effective car insurance policies.

In this blog, we are going to discuss the factors on which an all-inclusive car insurance policy depends. Having a sound knowledge of such factors will help you in evaluating different policies and in choosing the best and the cheapest car insurance in India  which could suffice your car insurance needs.

Here is a table below showing the list of top insurers offering vehicle insurance plans at low premium prices. (The vehicle insured is the latest Hyundai Grand i10). This is a petrol model registered at Kolkata and the insurance policy is comprehensive.

Estimated Premium Price for Hyundai Grand i10 from Popular Insurance Companies India

Auto Insurance Company Estimated Premium Price 
TATA AIG General Insurance Rs. 13,500
Digit General Insurance Rs. 15,000
Royal Sundaram General Insurance Rs. 17,500
Bharti AXA General Insurance Rs. 20,000
Liberty General Insurance Rs. 20,000

*Actual premiums may vary

5 Factors that affect Car Insurance Policy and Its Premium

Here are the 5 key factors on which a comprehensive car insurance policy and its premium price depends:

  1. Model and make of your vehicle: The model of the vehicle you are driving as well as its make plays a very important role in the premium rate fixed for your car insurance policy by the insurance company.
  2. Age and condition of your vehicle: It is quite obvious that the more a car is used or the more its age is, the more insurance premium rate it will attract. Thus, a new car with fine condition will invite less premium amount, while an old car not in the best condition will have more premium.
  3. IDV of vehicle: The IDV or the Insured Declared Value of a car is the highest limit of sum assured predetermined by the insurance company in the event of total loss or theft of your car. It is basically the price that you receive by deducting the showroom price offered by the manufacturer of the car and the depreciation cost of the vehicle. IDV is equivalent to the highest sum insured price on your car insurance policy.
  4. Add-ons used: The premium rate of a car insurance also depends on the add-on coverage that you avail. So, depending on the number of add-ons you buy along with your car insurance, the premium rate of the policy will keep increasing.
  5. Location (Urban/Rural): Another important factor on which the car insurance price in India depends is the RTO location where you are registering the car. Depending on whether you are registering the car in a urban location, a semi-urban location, or a rural location, the price of insurance will differ. Thus, if you buy same insurance plan from same insurance provider and for the same car, still the premium might differ if you register the car in two different cities or in different regions of the same city.

Also Read: Car Insurance Calculator – How to Use

Does the cheap car insurance plans serve well for car owners ?

Choosing an insurance by looking at the car insurance price list in India might not suffice your requirement of the car policy. So, focusing only on the price is not worthy unless other factors like benefits and coverage also fit into your bill.

Moreover, it is also not required that the cheap insurance plans offering lowest rate of premium will serve as the best policy for your vehicle.

Here are some other factors that you must verify along with determining the price of insurance policy while purchasing a car insurance:

  • Availability of 24/7 customer care: There are many insurance companies which provide 24/7 customer support for all seven days a week. On the other hand, some companies provide customer support for limited duration of the day for 5/6 days a week.
  • Ratio of Settlement of Claims: A person willing to buy a car insurance should buy it from an insurance company offering the best claim settlement ratio. It is because the ratio of claim settlement represents the claim percentage that the insurance provider has settled during a year. So, claim settlement ratio serve as an important yardstick in the selection of a car insurance plan. Thus, if a car insurance company is providing cost-effective policy with a poor claim settlement ratio, it might not benefit you much.
  • Add-ons offered by the insurer: The add-on covers are the additional coverage that insurance companies generally provide. These add-on covers can be bought with a comprehensive insurance plan as well as with standalone policies that provide cover against own damages. Depending on the insurance company, you can avail the add-ons as offered by the insurance provider. Some providers might offer more add-ons as compared to others. So, this is another yardstick of choosing insurance plans.
  • Policy Purchase/Renewal process: The process of purchasing or renewing a policy also serve as a crucial factor in buying an insurance.  People like to buy policies from insurance companies which offer easy buying and renewal process. Companies offering instant buying option and less paper work are considered more than the ones with cumbersome process.

Key points to search for the most cost-effective Car Insurance Plans

Here are some tips to find the best car insurance plans:

  • While buying an insurance, it is important to compare quotes and features online and then buy a policy to get most economical deal.
  • It is also important to consider features like Deductibles, IDV, NCB etc.
  • Another important thing is to check the availability of cashless cover offered by the insurance company.
  • Cashless cover allows insured to get the repairs done on their car without paying any money from his/her pocket in the event of an accident.
  • It is also important not to use the services of insurance agents to buy an insurance policy, rather you should buy it from an authorized broker.
  • Always opt for policies offering cover for personal accident along with the regular plan. This way you can insure the person driving the car as well as the passengers sitting on the car. You can buy this cover as an add-on by paying an extra premium amount.
  • Also, remember to enter the correct information while submitting the insurance policy form at the time of buying it, else it can cause you trouble during claim settlement.
  • Always maintain safety while driving your vehicle, and don’t drive your car when you are drunk. Also don’t violate any traffic rule. This will help you in making less claim and in earning NCB.

Takeaway

To avail the cheap and the most beneficial car insurance policy, it is always better to buy it online. Not only it is simple and quick, but it also allows you to have good comparison of plans, quotes, features, and benefits of different insurance policies.  This way you can make sure to purchase the cheapest car insurance available offering maximum benefits.

Also Read: Best Car Insurance Companies in India 2022

FAQs on Cheap Car Insurance In India

Which is the cheapest type of Car Insurance?

Third party insurance, which is the compulsory car insurance required to drive a car on the Indian roads by Motor vehicle law, is the cheapest or least expensive type of car insurance available in India.

What type of insurance is good for a car?

Comprehensive car insurance is the most helpful and valuable type of car insurance available in India. It covers both third-party damage as well as own car damages and is termed as good for cars.

What is the most basic car insurance I can get?

Third-party liability insurance is the most basic car insurance that you can get in India. This is the most basic as well as the most cheapest form of car insurance that you can purchase. This insurance scheme is also called liability-only insurance.

Is it necessary to get insurance for a car?

Yes, it is necessary for every car to have a car insurance to be able to drive hassle-free on the Indian roads. It is mandatory for every car to have a third-party car insurance and it is mandated by the Motor Vehicles Act, 1988. This is because having a car insurance reduces the liability of the policy holder regarding third-party damages.

What are the 3 types of car insurance?

Below are the 3 different types of car insurance:
Third-Party Liability Only Cover
Personal Accident Cover
Comprehensive Car Insurance

What is car insurance and how does it work?

Car insurance is a contract between the policyholder and an insurer, wherein the insurer agrees to pay premiums in exchange for protection against damages caused to third party person and property as well as own car damages of your car. As per Motor Vehicles Act of 1988, a third party car insurance is mandatory in India to be able to drive a car without hassle.

What is covered in car insurance?

Below are the coverage allowed under car insurance policy:
Covers third-party physical injuries
Covers third-party loss of life
Covers third-party damage of property
Cover against Natural Calamities
Cover against Man-made Disasters
Covers car Theft
Cover against Personal Accident
Coverage against Fire
Coverage against Accidents

Is insurance necessary for a car?

Yes, insurance is necessary for cars and every car owner must have a car insurance to be able to drive his/her on the Indian roads hassle-free. It is mandatory for every car to have a third-party car insurance and it is mandated by the Motor Vehicles Act, 1988. This is because having a car insurance reduces the liability of the policy holder regarding third-party damages.

What insurance is mandatory for a car?

As per the Motor Vehicles Act, 1988, it is mandatory for every car owner to have a third-party car insurance policy. This is because having a car insurance reduces the liability of the policy holder regarding third-party damages.

How much does car insurance cost in India?

The cost of a car insurance depends on the car insurance policy you have applied for as well as the insurance provider that you are buying the policy from. Further, it also depends on various other factors such as the condition of the car, the make and model of the car, the add-on cover you have applied for and much more. A third-party liability coverage for small cars might start from rupees 1000- 1500 and can go to any extent.

Feb 24, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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