A car insurance policy covers the financial liability which arises in case the insured car injures any third party or damages any third party property. Moreover, if the coverage of the policy is comprehensive, coverage is also given for the damages suffered by the car due to accidents or any other calamities. A car insurance policy is mandatory as per the rules of the Motor Vehicles Act, 1988. Only if the car has a valid insurance cover then it is allowed to run on Indian roads. The car owner is the policyholder who is required to pay the premium.
Car insurance policies come in the following two types :
Third party liability only policy
This policy has a restricted scope of coverage. It covers only two instances of third party liability which might be faced by a car owner. Firstly, if the car causes injury or death of any individual other than the car owner, it gives rise to a third-party liability. The car owner is liable to compensate the injured individual or his family (in case of accidental death). The car insurance policy covers this financial liability. Second coverage is given against liability faced if there is any damage to the property belonging to a third party. Third party liability only policies, therefore, do not cover damages suffered by the car and its owner/driver. Third Party Insurance is mandatory as per Motor Vehicle Act 1988 and without this it is illegal to drive a vehicle.Premiums for third party liability insurance are fixed by the IRDA and they are very low, so buying a third party insurance is not a problem.
Comprehensive package policy
This policy is an all-inclusive policy which is also called a comprehensive coverage policy. The policy covers third party liability faced if you injure or kill any individual or damage any individual's property. Along with the mandatory third party cover, the damages suffered by the car are also covered. If your car is damaged due to covered perils, then the repair costs incurred would covered under the insurance policy. Furthermore, there is also a personal accident cover inbuilt in the plan. This cover provides compensation in case of death or disability suffered by the owner or driver of the insured car because of an accident. Premiums for this policy are higher because of a wider scope of coverage available under these policies.
A car insurance policy has many benefits which can be summarised in the following points :
In case of any accident involving your car, if you injure or kill any individual or damage someone's property, you would be financially liable for the injury or damage caused. In case of accidental death, the financial liability is quite high. This financial liability is a financial burden which is taken care by a car insurance plan.
If your car faces damages, the repair costs are quite high. Such costs might burn a hole in your pocket. If you buy a comprehensive car insurance plan such repair costs are also covered. You wouldn't have to pay for the repair costs and thus save your money.
A car insurance plan is a mandatory requirement. If you don't buy a plan, you face legal consequences which include heavy fines and might also lead to imprisonment. So, buying a car insurance plan is necessary in this context.
Comparing car insurance policy is necessary for the following reasons :
To find the best plan
There are a lot of car insurance plans available in the Indian insurance market. Each plan promises something better than the other. To know the difference between the different plans, you need to compare. In order to find the plan which is the best for your car based on such differences, comparing becomes essential.
To choose a higher IDV
The IDV stands for your car's Insured Declared Value. This value reflects the market price of your car after being adjusted for depreciation. Different policies fix the IDV in a different manner. That is why you see different IDVs for the same car. Ideally, you should opt for the highest possible IDV to maintain the value of your car. This would help you get the maximum claim settlement from the company in case of theft or total loss of your car. The option of choosing a high IDV is possible only through comparing.
For getting the best premium rates
Just like the IDV is different across different car insurance plans, the premiums too vary. Needless to say you would want the lowest possible premium for your car insurance policy. You can choose the best premium rate when you get to compare between the different plans before you buy one.
To get comprehensive coverage features
The coverage features across different car insurance plans also vary. If you want your plan to have an all-inclusive coverage you should compare different plans and choose a plan which has the required coverage features at the best rates of premiums.
To get higher discounts
Car insurance policies offer attractive rates of discounts which help in reducing your premium outgo. To search for the highest rate of discounts you have to compare because different plans allow different discount rates.
Coverage under a car insurance policy is given for the following contingencies :
Any third party injury or death which is a result of an accident involving your car.
Third party property damage which occurs because of your car.
These two are the mandatory coverage benefits which are found in all plans. Besides these, if you opt for a comprehensive car insurance plan, you also get coverage for the following :
Damages suffered by your car due to natural calamities like floods, earthquakes, lightning, etc.
Damages suffered due to man-made disasters like fire, theft, explosion, terrorism, etc.
Damages suffered when the car is in transit by rail, road, water or air.
Personal accident cover for the owner or driver of the car which covers accidental deaths and disablements up to a specified limit.
Thus, your car insurance plan provides coverage for almost all possible contingencies faced by your car.
In a comprehensive car insurance policy, there are various add-on covers which help increase the scope of protection offered by the policy. Add-on covers are additional coverage options which come at an additional premium. The following add-ons can be found in car insurance plans :
In this add-on cover, the insurance company gives you a 24*7 assistance if your car breaks down in the middle of the road and you cannot reach the nearest garage. This also covers if you run out of fuel or tyres get punctured or deflated.
Zero depreciation cover
In case of a car insurance claim, the costs incurred on repairing or replacing the damaged parts are reduced with appropriate depreciation incurred on the parts. As such, the policy pays a reduced claim amount while you bear the cost of depreciation. Through this cover, the cost of depreciation becomes zero. The insurer settles the full claim value irrespective of the depreciation applicable on the car's parts.
You earn a No Claim discount in the year when you don't make a car insurance claim. This discount accumulates every year when no claim is made and discounts the renewal premium. However, a single instance of claim wipes out the accumulated discount. Through this add-on you can protect the applicable NCB discount even if you make a claim under your policy.
Return to invoice
The insurance policy is valued at the car's IDV which decreases every year. In case of a theft or total loss of the car, the IDV is paid which is the depreciated value of the car. This add-on ensures that in such cases the invoice value of the car is paid without factoring in depreciation.
This add-on covers the cost of consumables like engine oil, coolant, etc.
Personal accident cover for passengers
Under this add-on, named passengers also gets a personal accident cover.
The following are not covered in car insurance :
Normal wear and tear of the car's parts
Accidents suffered when driving outside India, under the influence of alcohol or drugs, without a valid driving license, when the policy has lapsed
Damages due to electrical or mechanical breakdown, war and related perils, intentional accidents, overloading, or using the car in violation of its usage limitations
Any type of consequential loss
Among the various car insurance plans available in the market, here is a list which contains the top 10 plans to choose from :
HDFC Ergo Private Car Insurance Policy
The company is a leading name in the general insurance industry. Its car insurance policy offers up to 60% discounts in premiums for cars aged 5 years and more. So, this policy offers a comprehensive protection at affordable costs.
HDFC Ergo Third Party Liability Only Insurance
This is the basic liability only policy which is available instantly and also offers a personal accident cover.
New India Private Car Policy
A comprehensive policy with various add-on covers.
Royal Sundaram Car Insurance Policy
A comprehensive policy with a unique car shield cover.
Liberty Videocon Private Car Package policy
A comprehensive car insurance policy which allows passengers, paid drivers and your car's accessories to be covered at an additional premium.
Future Generali Car Insurance Policy
The policy offers cashless claim settlement across more than 2500 garages and personalised claim handling services.
Bharti AXA Third Party Liability Coverage Plan
A mandatory policy with lowest premium rates.
Bharti AXA Comprehensive Car Insurance Plan
A comprehensive coverage plan which not only has inclusive inbuilt benefits but also offers a range of add-on covers.
Tata AIG Liability Only Policy
If you are looking only for the mandatory policy, this policy provides ideal coverage.
Tata AIG Auto Secure Private Car Insurance Policy
A comprehensive plan with thirteen available add-on covers.
To choose the best car insurance policy, you should compare the different plans available in the market. The online mode has eased the entire comparison process. While comparing, you should look at the following parameters to choose the best policy :
The IDV of your car is its market value after deducting the age-based depreciation. IDV reduces every policy year as your car ages. You should choose the highest IDV to enjoy maximum coverage.
Once you are done with the IDV of the policy, look at the coverage features promised under the plan. Try and opt for a plan which has all the coverage features inbuilt in it for maximum scope of coverage.
Since you would be paying the premiums out of your pockets, try and choose a plan which has the most reasonable premium rate. When comparing premiums, however, keep an eye out on the coverage features. Don't skimp on the coverage to get a lower premium. The coverage vis-à-vis the premium should be balanced.
There are add-on covers in car insurance policies which provide great benefits. Look for the available add-ons to enhance the coverage of your policy.
Car insurance plans allow premium discounts for various factors. Look for the maximum discounts to minimise premiums.
List of networked garages
You can get cashless claim settlement if you get your car repaired at a networked garage. The best policy would be the one with the largest network of preferred garages.
Judge car insurance plans on these parameters to find the best policy.
Buying a car insurance plan is easy. You just need to be the owner of a car to become eligible to buy a plan. The documents which might be required are as follows :
The duly filled and signed proposal form of the car insurance plan which you are buying
A valid driving license of the owner of the car
The RC book of the car
The invoice of the car if the policy is for a new car
The earlier policy document if the policy is being renewed for an existing car
Aadhar card of the owner for Aadhar linking of the policy
KYC documents of the owner of the car
A comprehensive car insurance policy is not mandatory by law. The legal rules require only a valid third party liability only coverage which protects your financial liability in case of third party injuries, deaths or property damage. These policies have a very low premium which is fixed by the Insurance Regulatory and Development Authority (IRDA). But is the third party liability only policy sufficient for providing complete coverage to your car?
No, it isn't. This is where a comprehensive car insurance policy comes into the picture. Besides providing coverage for the mandatory third party liability, a comprehensive car insurance plan also covers the damages suffered by the car. In case of an accident, the car itself suffers severe damages and needs insurance protection. In the absence of a comprehensive car insurance plan, you would have to bear the cost of getting your car repaired. Given the repairing expenses, you face a heavy financial burden on your shoulders. To get rid of this burden, a comprehensive plan comes to your rescue. It pays for the repair expenses and saves you the financial trouble. As such, a comprehensive car insurance policy is important with respect to the coverage it offers.
Besides covering damages, the policy also covers possible theft of the vehicle. If you lose your vehicle to theft, the cost of buying a new car might be prohibitive for you. By paying a claim in case of theft, a comprehensive insurance plan gives you necessary funds to buy a new car to replace your existing one.
The add-on covers require a special mention too. Only comprehensive car insurance policies offer you a choice of add-on covers with which you can increase the coverage of your car insurance plan. These add-ons prove very useful in covering common contingencies. For instance, the NCB protect add-on helps you protect your premium discounts even if you make a claim in your policy year. Similarly, a zero depreciation add-on removes the effect of depreciation from claim settlement and ensures a higher claim pay-out. Both these add-ons prove to be money-savers by virtue of their coverage. So, add-ons are required to experience the most inclusive car insurance protection which can be available with comprehensive car insurance plans only. This also makes comprehensive plans useful and important.
Lastly, where premiums are concerned, comprehensive car insurance plans are expensive than third party liability only policies. But the additional premium outgo is completely justified by the coverage benefits the plan offers. With a little extra premium, you can get coverage for your car's damages too which also prove expensive. So, a comprehensive car insurance policy is important and should be bought.
Your decision to buy a car insurance policy should be a well-thought of decision and it should be taken only after you understand the coverage and the factors which should be present in the plan. The following things should be considered when you are buying a car insurance policy :
The IDV which the policy offers should be considered. You should buy a plan which promises the maximum IDV.
The coverage features should be studied to find the inbuilt benefits and the benefits which are available at an additional cost.
The add-ons should be matched with your requirements. You should add important add-ons which would increase your policy's coverage.
The premium of the policy should be noted and compared against the premium offered by other plans. The IDV and the coverage features should also be compared when comparing premiums.
Look out for available discounts which help lower your premium outgo.
If you are renewing your policy, use your NCB discount to lower the renewal premium.
Check out the insurer's list of tied-up garages which would be helpful at the time of claim.
The process of comparing car insurance policies on Paybima is easy as the we offer a good user interface. You should follow the below-mentioned steps for comparison :
Choose the option of 'Car'.
Then select the RTO where your car is registered, manufacturer name, model, variant, purchase or registration date, manufacturing year, fuel type and pin code.
The provide your name, email Id and mobile number and select 'Quote'.
The available plans for both type of car insurance – third party and comprehensive would be displayed. You can compare the plans based on their IDV, coverage, premium and add-ons available.
You can choose a suitable policy and pay premium online.
Once the premium is paid, the policy is issued. You would get the soft copy of the policy immediately on your email. The hard copy would be sent within 7 days.
If you want to renew your car insurance policy, you have to follow the following steps :
First, you should compare between the other available car insurance plans to find the best plan for your car.
After you compare and find the best plan, you should fill the proposal form of the new policy. You have to provide the details of your car and the details of your existing policy.
After the proposal is filled and submitted, you have to pay the premiums. Keep a look out for the NCB in your existing plan. This helps reduce your renewal premium.
After completing premium payment the policy would be issued. Coverage would start after the existing policy expires.
If you don't want to change your insurer you can renew your current policy by visiting your insurer's website. Your existing policy number would be required and you would have to pay the premium online after which the policy would be renewed.
If your existing car insurance policy has expired, you can renew your coverage following the below mentioned steps :
You have to decide on the type of policy you want, third party liability only or comprehensive.
Then you should decide whether you want a plan from a different insurance company or want to continue with the same plan. Comparing is always better before you renew. You can compare the available plans and select the best plan based on its coverage, IDV, premium and other factors.
For renewing a lapsed policy either through a new plan or through an existing one, inspection of your vehicle would be required. You have to approach the selected insurer to arrange for your car's inspection.
The insurer sends its surveyor who surveys your car and files a survey report.
Based on the report submitted by the surveyor, the insurer determines your car's IDV and the applicable premium rate.
You should try and renew your policy within 90 days from the date of expiry of the old policy. When you do so, you can use the accumulated NCB of your old policy to claim a premium discount on your renewal premium. If 90 days are over, your accumulated NCB would be lost and you would have to pay the total premium.
After using any NCB you have, you would be shown the updated premium which you would have to pay. Once the payment is done, the policy is renewed.
To file a claim in your car insurance policy, follow these steps :
Whether it is a third party claim or an own damage claim, inform your insurer immediately.
In case of a third party claim you have to inform the police too and file a FIR.
In case of third party, if you are availing third party benefit, get the details of the other individual's insurance policy and inform his insurance company.
If your car is damaged and you are making a claim on your policy, you would get the address of the nearest garage when you inform the insurance company.
You have to take your car to the prescribed garage and wait for the insurer's surveyor.
The surveyor visits the garage, makes and estimation of the costs of repairs and files a report with the insurance company.
The surveyor also allows the repairs to start.
Once the repairs are done, the company settles the bill directly with the garage and you can take the delivery of your car.
If you vehicle is stolen, you have to inform the police and your insurance company. A FIR would be required. Moreover, the RTO should also be informed of the theft.