Car insurance is a legal agreement between you, the insured, and the insurance company or the insurer, wherein the insurer is liable to cover any financial losses that occur because of an accident or theft of the car or damages to a third party because of the car. The extent of coverage, however, depends on the terms and conditions of the car insurance policy document.
Now buy your dream car without the financial stress of owning one. Car insurance allows you to safeguard yourself and your dependents from financial losses that could arise out of damages to your car. The damages may occur because of accidents, theft, natural calamities, and much more. Buying car insurance is simple, hassle-free, and convenient.
Why Do You Need Car Insurance?
If you do not already have insurance on your car, you need one immediately because:
1. It is mandatory by Indian law, as per the Indian Motor Vehicles Act.
2. It protects from any third-party liabilities arising because of damages caused by your car.
3. It protects you from the financial losses of car theft.
4. It protects you from losses arising out of accidents and damages from natural calamities.
5. With car insurance, you can avail a personal accident cover up to a certain amount.
Key Features And Benefits Of A Car Insurance Policy
Car insurance policies offer a wide variety of benefits to individuals these days, making your dream car more accessible and affordable. The key features and benefits of having a car insurance policy include:
Affordable Premiums : By buying your car insurance policy online, you can save a lot on your premium. Easy claim application process – Most insurance companies have a dedicated and highly experienced team of claim experts who help apply and speed up the claim settlement process.
Cashless garage network : Getting your car insurance from a reputed insurance company often opens up the opportunity of cashless garages, where you can get cashless repairs for your vehicle in any of their associated garages. The insurance company covers the cost of repairs.
Third-Party liabilities : In case any liabilities arising out of damages to a third party or their property because of your car, your car insurance will protect you.
No Claim Bonus : You can opt for a no-claim bonus cover on your car insurance. With a no-claim bonus cover, you are eligible to get a bonus amount if you don't make any claims on your car insurance for the entire year.
Flexible add-on cover options : With your car insurance policy, you can opt for several add-on covers to offer greater protection from damages. These include key replacement cover, zero depreciation cover, emergency assistance cover, etc.
Easy application and renewal online : You can apply for a new car insurance policy or simply renew your old one quite easily online. You need to enter the necessary details about your vehicle and old insurance policy (if applicable), pay the insurance premium online, and the new/ renewed policy document will be with you in minutes.
Types Of Car Insurance Policies In India
Depending on the extent of financial coverage and risks you want to cover against, car insurance policies in India are essentially of two types:
Third-Party Liability Policy : Third-party liability insurance is the most basic and minimum requirement on your car as per Indian law. It covers you against any financial and legal liabilities that arise out of damages to a third party or their property because of your car.
Comprehensive Policy : A comprehensive policy is more detailed than the third-party liability policy, with much larger coverage. It not only covers losses from damage caused to a third party but also financial losses to you because of damage to your car or property because of the car.
Pay-as-you-drive Policy : Under this policy plan, you need to pay the insurance premium amount based on the number of kilometers covered by the car. The premium amount is usage-based. You are covered as per the inclusions of the comprehensive and the third-party liability policy on a pilot basis for a year.
Add-Ons Covers In A Car Insurance Policy
Along with your comprehensive car insurance policy, you can opt for any or all of the following covers:
Zero Depreciation Cover : Taking the zero depreciation cover on your car insurance policy protects you from suffering any further deductions on your claim amount because of the depreciation value of the damaged parts of the car.
No Claim Bonus Cover : The No-claim bonus cover makes you eligible for a bonus from your insurer in case no claims were made on the policy in the past year.
Emergency Assistance Cover : The Emergency Assistance Cover allows you to drive hassle-free in any part of India. In case of an accident or a breakdown, you get immediate site repair or towing assistance wherever you are.
Key Replacement Cover : The key replacement cover allows you to claim a free replacement of your car keys in case you misplace or lose the key. The replacement is done free of charge, where the insurance company pays for the replacement charges.
Return To Invoice : In case there is a difference between your car's insured value and purchase value, the return to invoice cover helps you cover the gap during your claim in case of a loss or theft.
Engine And Gearbox Protection Cove : The engine and gearbox cover helps cover costs of repairs on any parts of the engine and gearbox, like nuts, bolts, screws, etc., and the corresponding labor charges for repair and replacement as well.
Consumables Cover : The consumables cover helps cover costs of consumables like engine oil, nuts, bolts, gearbox oil, grease, washers, etc., during repairs or servicing.
Passengers Cover : The passengers' cover in your car insurance policy helps secure you financially from any damages or injury to other passengers in the car during the accident.
Car Downtime Expenses : Car downtime expenses cover help you with reimbursement for any travel and other expenses incurred while your car is under repair or service at a network garage. You get a daily allowance from the insurance company to help cover any such expenses.
What Are The Factors Affecting Car Insurance Premium?
These are the factors that can affect the premium amount of your car insurance policy:
IDV of the car : The IDV or insured declared value of the car is the current market value of the car after considering the depreciation amount. The IDV indicates the amount you can claim in case your car is stolen or has undergone complete damage.
Age of the car : Brand new cars have a higher insurance premium than older ones. The depreciation amount deducted from the IDV is higher for older cars. As your vehicle continues depreciating, the policy premium keeps reducing.
The type of policy : The premium amount is higher for comprehensive policies than third-party liability-only policies because of the coverage offered in the former.
Add-on covers : By taking add-on covers on your car insurance policy, you are liable to pay a higher premium amount on the policy. With every new add-on cover, the premium value increases.
Deductibles : Deductibles are the amount that the policyholder is committing to pay before the insurance company can start paying for the repairs and damages. The higher the deductibles amount, the lower the premium on your insurance.
Claim history of the insured : You are eligible for a no-claim bonus if you do not make any claims on your insurance policy for an entire. If you go without making any claims for five consecutive years, you can earn up to a 50% discount on your next car insurance renewal premium.
Engine capacity of the car : Cars that have higher engine capacities attract higher premium amounts compared to those with smaller engines.
Other factors : Other factors that could affect the value of your insurance premium include the age of the owner, model and make of the car, city of registration, etc.
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How To Reduce Car Insurance Premium?
There are several ways in which you can reduce the premium you pay on your car insurance policy.
Lower IDV : The IDV of your vehicle determines the premium amount you pay. Opting for a lower IDV of your vehicle automatically reduces the premium you have to pay.
Drive Safely : Having a clean and safe driving track record helps you secure a lower premium. If you have had several traffic violations or insurance claims in your name in the past, the insurance company has reason to believe that you will continue the same in the future as well. Thus, increasing the premium amount applicable to you.
Safety Device : Installing safety or anti-theft devices in your car reduces the chances of losses due to theft. Therefore, car insurers charge premiums in your favor as there are lower chances of an insurance claim due to theft of the car.
Increase Deductibles : Deductibles refer to the maximum amount you are committing to pay in case of an accident, damage, or theft before your insurer can step in and pay. Committing a higher amount of deductibles means that the insurer will either have to pay a lower amount or not have to pay at all, thereby reducing your premium amount.
Avoid Lower Amount Claim For NCB : Having made lesser or no claims in the previous year makes you entitled to a no-claim bonus from the insurer, provided you have opted for the NCB cover that is. Using your no-claim bonus, you can save a huge percentage from your premium amount.
FAQs
How many times can I make claims on my car insurance policy?
Usually, car insurance companies do not impose restrictions on how many times you can file a claim on your policy. However, you must bear in mind that every time you claim your insurance, you are reducing your chances of a no-claim bonus.
What is a personal accident cover?
Personal accident cover is an add-on to your car insurance policy that offers protection in case of accident or damage to the policyholder. In case of injury or death of the policyholder, the insurance company pays a lump sum of money to the nominee.
What is the term for any car insurance policy?
Usually, car insurance policies offer coverage for up to 6 months or 12 months, based on the term opted for by the policyholder. After the term expires, the policyholder needs to renew their policy to reap the benefits of their insurance policy.
Can I take temporary insurance on my car for a month?
Yes, absolutely. Temporary insurance allows you to get coverage on your car for a limited period as short as even a day. Most such policies are usually comprehensive, but the coverage can be customized as per the policy-seeker and the insurer.
How can you avoid claim rejection on your car insurance policy?
To ensure that the chances of rejection of your claim are low, you must do the following:
Ensure you have a valid driver's license while driving the car.
Drive within permissible limits and boundaries that fall well within the geographical limits of insurance policy validity.
Submit an FIR in case of theft or accident.
In case you have purchased a second-hand vehicle, be sure to transfer the policy under your name.
Make sure your car insurance policy is valid. Renew it in case it has expired.
If you have made any kind of modifications to your car, be sure to report it to the insurance company. In case of damage to non-disclosed modifications or parts, the claim application may be rejected.
How do I choose the right policy plan for my car insurance?
While third-party liabilities policies are the most basic requirements as per Indian law, they also come at affordable premiums. The comprehensive plans are most inclusive with much greater coverage and therefore, come at a higher cost. You can decide on which is the more suited policy plan for you based on:
Your budget
Period for which you plan to use the car
Purpose of vehicle usage
Type of vehicle you own
How can I get a discount on my car insurance premium?
You can save your car insurance premium in many ways:
