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Car Insurance works as a safety net for the owner/user of the car. Realising its importance for car owners across the country, the Government made it obligatory for vehicle owners to have a third-party insurance cover for their vehicle. This means you have to buy a policy for your car to avoid any penalty/losses/legal trouble in the future.
Purchasing a car insurance policy is often a formality among many car owners because the only reason they care about getting a cover for their four-wheeler is that it is mandatory by law. Low premium plans are generally preferred since they are easy on the pocket. This means that spending on an inadequate cover that can make the owner pay a hefty amount out of his pocket in the event of a mishap or damage.
It is very important to invest in a comprehensive car insurance plan that’s right for you. Keep in mind that you need to understand the terms and conditions of the car insurance plan and draw a comparison with other policies to come at a suitable decision.
Is Car Insurance Mandatory in India For Motor Car Owners?
All the motor cars plying on the Indian roads must have a valid motor insurance policy as per the Indian Motor Vehicles Act, 1988. It is illegal to ride your car for private or commercial purpose on Indian roads without having a mandatory third-party liability cover insurance.
It is obligatory to have a valid car insurance policy as it provides financial protection against unfortunate accidents, which may damage to third-party property, and/or cause bodily injuries to the third-party driver or co-passengers and/or pedestrians. In such cases, having a liability cover provides financial coverage, the insurance company pays compensation on behalf of the car owner.
Basics About Motor Insurance Policy
It is the fixed amount that you need to pay to the insurance agency to keep the policy in effect.
Car Insurance Policy
The premium amount of the policy will depend upon the Insured Declared Value (IDV). This affects how high or low that amount will be. Many insurance firms have contacts with the manufacturers and provide you with the optimum value.
This section includes protection against the following phenomenon: landslide, self-ignition, lightning, explosion, earthquake, flood, typhoon/hurricane, inundation, and hailstorm.
Under this, you will be covered against threats like burglary, theft, damage during transit, an accident caused due to external agents, terrorist activities, riots, and strikes.
Car Insurance Policy Assures:
You Stay Financially Protected
A valid car insurance policy provides you with financial coverage in case of car theft or any damage caused by or to your vehicle.
You Are Legally Protected
It is mandatory to have a valid motor policy for your hatchback, saloon, SUV car to drive them legally on Indian roads, so having a valid motor policy keeps you legally protected.
You Are Protected With Personal Accident Cover
In case the policyholder meets an accident, which causes a partial or total permanent disability or dies due to an accident, the insurance company covers the insured up to the sum of Rs.15 lakh.
You Stay Worry-free
You can enjoy your drive without having any worries about riding your car illegally, paying a hefty penalty, or paying from your pocket in case of third-party bodily injury or property damage.
Types of Car Insurance in India
There are two primary options available in the market and both of them cater to completely different needs.
Third Party Liability Car Insurance
Third party liability car insurance is the most vanilla form of car insurance policy that you can buy. In fact, as per the rules and regulations, it is the bare minimum policy that you must have to drive the car. The Motor Vehicles Act of 1988 mandates all vehicles to have at least the third party liability policy so that they can drive their vehicles legally on the road.
Thus, this policy type at least gives you the clearance of legal driving. As the name suggests, it covers for damages to third parties during an accident. If a policy holder meets with an accident, he/she is considered as the first party, the insurer as the second party and any other person or property involved is the third party.
Any damages or injuries or death of third party individual or property is taken care of by the policy. It must be noted that since the coverage provided by a third party cover is very limited in nature, its premium prices are also low. In fact, the IRDA recommends the price of the policy on a regular basis. Though the policy is just enough for you to drive, it doesn’t offer a lot of benefits and convenience.
Personal Accident Coverage : A third-party car insurance policy covers an owner-driver cover
Owner-Driver Personal Accident Cover: In case of a permanent total disability or an accidental death, the policyholder is covered with a sum insured of up to Rs.15 lakh on an additional premium.
Personal Accident Cover Table:
% of Sum Insured
Dismemberment of both the limbs or loss of vision in both eyes or one limb and one eye
Dismemberment of one limb or loss of vision in one eye
Permanent Total Disability
What is not Covered in Liability Cover Only
• Own Damage of your car is not covered. Any damage incurred to the insured car due to an accident is not covered. The policyholder will have to bear the repair cost himself or herself.
• Accidental damage/ liability/loss happened outside the specified geographical area.
• Damage, liability, loss happened due to invasion, war and other warlike operations.
Comprehensive Car Insurance
A comprehensive car insurance, on the other hand, is a policy that will surpass your needs and then provide some more features and benefits. To start things off, it includes the third party liability policy by default and builds on the top of it. A comprehensive plan offers the following coverage.
Own Damage Cover
If your car was to meet with an accident and you wished for your policy to look after the repair expenses, a comprehensive policy would do that for you. The premium that you pay for a comprehensive plan has a small component dedicated towards own damage.
In the unfortunate event that your car is at the receiving end of a natural calamity such as flood, cyclone, typhoon, landslide and so on, the policy kicks in. Your car insurance will cover all the expenses related to such repairs.
Man Made Calamity
There are several instances where cars are damaged due to riots, strikes, malicious activities, theft or burglary. Having a comprehensive policy offers your car protection against all such things and ensures that you can sleep well at night.
Some of us want additional features and benefits or security to the base policy to enhance the protection of your vehicle. In such cases, opting for an add-on is the most sensible option. But you can only avail riders with a comprehensive policy.
Different Types of Add-on Cover in Car Insurance Policy
Zero Depreciation is a coveted add-on car insurance coverage feature that allows you to get full settlement regardless of any write-offs for depreciation as in normal car insurance plans. By opting for such coverage, you gain access to full claim policy against a premium; such plans are very beneficial for the top and mid-segment luxury and expensive cars as they provide superior benefits at minimal costs.
Return to invoice
In case your car gets written off due to an accident or gets stolen, you will be eligible to get the original invoice value including registration and road tax. Usually maximum cover in case of total loss is calculated as per the IDV (Insured declared value) mentioned in the policy. The cover is available for normally 4 wheelers that are upto 3 years old.
No Claim Bonus Protection
No Claim Bonus is like a reward discount given to insured at the time of renewal of car insurance for every no claim year. A minimum of 20% discount is eligible which can go as high as 50%. No claim bonus protection add-on helps you to preserve your NCB even if there is a claim, helping you to preserve discount in your following year’s premium.
We all are aware engine is the heart of the car and probably the most expensive part of the car. Engine repair is normally not covered under your normal comprehensive policy. In case if you’re insurance company is not offering coverage for engine protection, it is a good idea to go for an engine protect ad-on. As engine is the heart of any vehicle, always ensure your car engine is well protected at all time. Engine cover add-on also offers protection to the engine and it’s electronic circuit especially in case of flooding. Since flooding during the monsoon season is quite common, it is ideal to go for such an insurance add-on especially if your place of residence is prone to flood situations.
24/7 Roadside Assistance
Car can break down anytime anywhere. There is a good possibility a garage and a service centre is not always in the proximity of your reach. It can be headache to get help in such cases especially if you are not familiar with the area. In this add-on cover, insurance company provides certain round-the-clock services like emergency refuelling, towing, change of punctured tyre, arranging for a mechanic’s services and so on in case your car breaks down. So say adieu to car breakdown troubles and add this cover for complete peace of mind during driving.
Car Key replacement cover
Improvements in vehicle security and the development of smart key technology with programmed chips controlling locks, alarms, immobilisers and ignitions seems to have only increased the problems and cost when things go wrong. Losing out a car key cannot get replaced easily by local locksmith for a new generation car. It needs to come from the car manufacturer and can leave a big hole in your pocket. Key replacement covers the costs (up to the sum insured) of key replacement. If your car has been broken into then it will also cover locksmith charges, new locks and replacement keys.
Accident coverage for Co-passengers
This add-on is like an accident coverage, it provides coverage for co-passengers of the vehicle. It provides lump sum compensation to fellow passengers in case of death, permanent or partial disabilities suffered during an accident. So show the care for your co passengers and make them feel safe and secure in your car with this add-on cover.
Car Accessories Cover
There are lot of accessories in the market which we put in the car to make our car look unique and to enhance our driving experience. The accessories can be expensive if need to be replaced if damaged or stolen. You can get your accessories insured with this add-on cover and need not worry continuously when you park in unfamiliar locations.
As we can see there are plenty of add-on covers available today. Choose the add-ons based on your individual requirement and circumstances. The add-ons can enhance your base 4 wheeler insurance plan and make good value out of your premium payment.
Insured Declared Value (IDV) In Car Insurance
When it comes to car insurance, there are many terms that you need to be aware of. Among them, one of the most important term is the IDV (Insured Declared Value). You must have heard people talk about the IDV a lot when a car insurance policy is being purchased or renewed. But what exactly is this IDV? IDV is nothing but the current market price of your car. With time the vehicle ages and its value drops. The insured declared value, or the IDV, is just that.
Why is IDV Important in Car Insurance?
It is very important for you to get the correct IDV of your car. IDV is absolutely crucial in car insurance. This is because the claim you get depends greatly on the IDV of the car. If your car gets stolen or is damaged beyond repair, your insurance provider will pay compensation equal to the IDV mentioned in your car insurance policy. You must note here that the value of the car is not the current ex-showroom price but the IDV of your car. So if you have a Maruti Suzuki Wagon R that is a few years old, you can’t expect to get INR 5 lakhs (its current price for brand new car) for it. The IDV will be considered in this case.
Apart from the claim, the premium also is affected by the IDV. For older cars, the premium of the car insurance policy is lower. This is because as your IDV increases the value of your car drops, your insurance cover also starts becoming lesser. Quite understandably, you pay a lower insurance premium for a policy of a lower value. So this is another area where the IDV plays a huge role.
These are the main reasons why the insured declared value or IDV of your car is so important when you buy your renew your car insurance policy. Make sure your insurance provider makes a correct assessment and you pay your premium accordingly and get an adequate cover too.
IDV and Car Insurance Claim If due to an unfortunate incident your car gets stolen or is completely damaged, you will need to replace it. At such a time, your insurance provider is liable to pay a claim to you, provided you have a comprehensive car insurance policy. However, you will only get the claim amount that is viable with the IDV of the vehicle. If your car is just six months or less old, you can get up to 95% of the value of the car as compensation from the insurance company. On the other hand, if the car is about four years old, you will only get 50% of the value of the car. So even you had a Nisan Sunny and want to continue with the same make and model, you will only get INR 4 lakhs as compensation after four years. The current price of the car is INR 9.5 lakhs, so you have to pay the remaining amount.
This is how the IDV plays out at the time of a car insurance claim. You must therefore be very careful when calculating the IDV. Never buy a car insurance policy before you check the IDV and understand what you are liable to pay as premium and what you stand to receive at the time of a claim.
How to calculate the IDV of a car?
Like most other things, the internet has made it very easy for you to find information about all aspects related to car insurance. You can get a fair idea about the IDV by using a simple internet calculator. Just enter the details regarding your vehicle. These include the model and make of the car and the age of the car. You can use an insurance aggregator’s website to calculate the IDV of your vehicle. Alternatively, you could directly visit your insurance provider’s official website or mobile application and get the job done.
If you are on the lookout for buying an insurance, car insurance premium calculator 2018 is the smartest to go about the same. There are several insurers who offer such calculators on their website. The simple idea behind using car insurance premium calculator 2018 is to get quotes from insurers before actually buying the policy.
Differences Between Third-party and Comprehensive Motor Insurance
The Differences Between Car Third Party Liability Cover and Comprehensive
Third Party Policy only
Third Party Liability
Third Party Property Damage
Personal Accident Cover
X Not Covered
X Not Covered
(Extra Protection Shield)
X Cannot be added
✓ Can be added
Let us see an example to understand the difference between a third party liability cover and comprehensive car insurance cover.
Example: Rahul and Kunal bought a new Honda Jazz hatchback car in Jan’19. The on-road price in Mumbai is Rs.9.61 lakhs
Rahul insured car with only a Third-party cover. Third-party premiums costed him Rs.4000.
While Kunal bought a Comprehensive policy (covers own damage + third party liability cover), which cost him Rs.8500/-.
In the month of June, both met an accident and it was their fault. And the total repair cost turns out to be Rs.20,000 (approx.).
As Rahul had purchased only third party coverage, the whole repair cost of his car will have to be borne by him. The insurance company will pay only third party property damage cost. Nothing for any damages incurred on the car.
Since, Kunal had bought a comprehensive car insurance policy, the insurance company will pay the repair cost (after deduction for the depreciable parts cost) on behalf of him.
Rs.4000/- (only third-party)
Paid by the insurance company
Paid by the insurance company
Own- Damage Repair Cost
Not paid by the insurance company
Paid by the insurance company
Total Money Invested
Rs.4500 + Rs.20000
Net Savings (Rs.)
More than approx. Rs.11500
Total Money paid by Rahul is Rs.24,500, whereas, Kunal paid Rs.8500. On the face value, Rahul saved money on the premiums paid. However, he had to suffer a huge financial loss of money that came along with the car damage. The total loss borne by Amit is of Rs.20,000
Note: All the prices are indicative and are subject to change.
Understanding Car Insurance Premium
What is Car Insurance Premium?
Car insurance premium is the amount paid towards the total cost of your insurance policy. It is the sum paid to the insurance company to cover your vehicle against untoward incidents.
Are Premiums Static Or Will They Inflate Over Time?
You might often get confused upon noticing that your car insurance premium has increased over the years without any fault on your part.
It is interesting to note that the inflation in the amount of premium each year is affected by a variety of factors even though you pay your premiums on time.
Take a look at the factors that can cause a rise in your car insurance premium each year.
If you have settled any auto claims previously with the insurer, it creates the impression that your vehicle is risk-prone. In such a case, the insurer might increase your premium amount to commensurate it with the quantum of risk involved.
If over a period, you, as the insured, develop any diseases such as diabetes or heart ailments, the insurance company is bound to charge higher premiums from you for the simple reason that you pose a greater risk as a driver now. As a result, the insurance company needs to adjust your cover amount in proportion to any such contingency.
Wear and Tear of Vehicle
If you are a frequent driver, your vehicle is bound to experience some amount of wear and tear. Insurers consider this an important factor while deciding on the premium amount. For cars that have travelled a certain number of miles in a year or those whose make, and model is old, insurers charge a premium more than the normal amount to balance their liability in case of a claim.
You will often find that premiums for insurance policies in areas where traffic is low are quite cheaper when compared to metropolitan cities or places that witness high traffic. This is because there are greater chances of accidents and mishaps in the case of the latter and therefore insurance companies have to be financially prepared to deal with liabilities arising from such cases.
Age of the Driver
Age is also an important factor while deciding on the premium amount. Younger drivers pay a reduced amount as premium. As your age increases, so does your premium amount as insurance companies are often sceptical about selling insurance policies to the elderly, given their deteriorating physical capacity and medical conditions.
Will The Premiums Spike At The Time Of Renewal?
Your insurance premium is bound to rise on account of the factors mentioned above. However, here are a few ways how you can prevent a steep rise in the amount payable as premium amount:
Avoid Claiming small Damages
Check the amount of repair that you would incur in case of damage. If the amount is petty, avoid filing a claim since it might form a negative impression on the insurer leading to higher premium costs in the future.
Installing safety equipment in your car can reduce your insurance premium to a considerable extent. For instance, installing a gear lock or a steering lock can work to your advantage, and it displays your sense of prudence and responsibility.
Since online insurance involves minimal documentation, both at the time of purchase and renewal, you stand a better chance to save up on yearly increase in premiums. You can visit insurance aggregator websites, which allow you to buy the best insurance online by comparing a range of policies from reputed insurance companies.
Loyalty towards Insurer
It is advisable that you choose an insurance partner that you have previously associated with on other insurance policies. This is because insurance brands reward customer loyalty in many ways, with one of them being, ensuring and controlling the rise in the premium amount in subsequent years.
The Key Benefits Of Buying Motor Insurance
Enhanced Financial Protection
Your car insurance will save you from financial burdens occurring from third-party liabilities, natural calamities, man-made calamities, and other strokes of ill luck. If you purchase a liability cover, only then will your car insurance cover protect you from financial burdens arising due to any third-party person or property damage. However, if you buy a comprehensive package, it will offer third-party damage cover as well as personal damage cover.
Cashless Garage Service
Most of the insurance providers now provide cashless garage service, which means that you don’t have to pay the repair amount yourself and then claim reimbursement. You can directly go to the network garage certified by your insurance provider and get cashless repair service. The provider will directly clear your bill and you can clear the remaining amount which is not covered under your car insurance.
Personal Accident Cover
Personal accident cover is an essential policy benefit that is generally included in most car insurance policies without any extra premium charges. The cover offers insurance in case of permanent or partial disability and death of the owner of the vehicle/policy. Personal accident cover amount is up to INR 1 lakh or more depending upon your car insurance cover.
In case of an accident or any other related event, if your car is wrecked or damaged severely, the insurance cover offers towing facilities to carry the vehicle to nearby service centres. The incurred amount is included in your insurance cover, and you can receive towing benefits up to a certain cash limit, which is dependent on your policy cover.
Motor insurance policies have many add-on covers that offer extra protection against financial liabilities. You can avail these add-ons at a minimal increase in premium amount. The add-on covers may include zero depreciation cover, key replacement cover, loss of personal belongings cover, etc.
No Claim Bonus (NCB) in Car Insurance
A no claim bonus in car insurance policy is like a reward which is the insurance company provides to the insured for not making a claim in the policy year. This works as a discount on the premium payable and the percentage depends on the no claim years consecutively. The No Claim Bonus discount percentage increases with subsequent no claim years. Below is the table highlighting the percentage of discount on year by year basis.
Number of Consecutive Claim-free Years
On 1st year claim-free renewal
On 2nd year claim-free renewal
On 3rd year claim-free renewal
On 4th year claim-free renewal
On 5th year claim-free renewal
There are some important aspects of no claim bonus which should be known to everyone. Some of these are:
Available when Policy is Renewed
The no claim bonus is a discount you will get if you have filed no claims in the policy year and the percentage of the same depends on the number of no claim years consecutively. Thus, it is not available when you are buying a new car insurance policy. The discount is available at the time of policy renewal and varies from 20-50%.
Bonus is Not Given to Car
A no claim is not given to the car but is offered to the insured. Thus, if a person has not claimed any amount from the insurance company for 3 years and now decides to buy a new car, he will be eligible for a no claim bonus. Transferring of no claim bonus from an old car to a new car is a simple procedure. A letter requesting to transfer the no claim bonus has to be submitted along with form 29 and 30. After this, the insurer issues a no claim bonus certificate with a validity of three years, and this needs to be submitted to the new insurance company.
If you decide to renew your policy with a different insurance company due to any reason like low premium or customer service, you can use your no claim bonus. You will need to provide all policy details and the discount will be automatically calculated. When you change the insurance company at the time of policy renewal, you will only need to submit the policy copy of the previous year. If you buy the policy online, the no claim bonus is calculated as per the declaration filled by you though the insurance company will verify the same and hence, you must be careful while giving the information.
Not Applicable on Third Party Liability
As per law, all car owners must have third party liability insurance and taking own damage protection is a choice. However, it must be noted that no claim bonus is not given on the third party liability but only on own damage component.
Add on Cover
Though, no claim bonus is given when no claims have been registered in the policy year but as an insured you have the option to take an add on cover which will help you avail the no claim bonus even if you have filed a claim in the policy year.
Never Claim for Small Losses
As it is evident from the above definition, no claim bonus is a discount on the premium for the car insurance. Thus, if you claim for a small loss, you will end up losing the bonus. Due to this reason, you must always compare the amount that you are claiming from the insurance company versus the amount of no claim bonus you will get and take a decision accordingly.
No claim bonus is an integral part of the car insurance premium payable. If you are eligible to get a no claim bonus, you can save a lot of money on the premium payable as you will get a good discount. As it involves saving money, you must be careful when filing a claim. A proper comparison should be done of the claim amount and the amount of money you will forego as the no claim bonus. This is something that you must do and if not able to, should take help from an expert.
Inclusions of Car Insurance Policy
Third party coverage
Third party coverage or basic/mandatory insurance will give you protection against third party liabilities or damage only.
A comprehensive car insurance policy will offer financial protection against natural calamities such as landslides, floods, earthquakes, etc.
If your car is stolen or damaged due to manmade calamities such as strikes, riots, etc., your insurance provider will offer help as per your policy terms.
Own damage and third party coverage
Comprehensive car insurance protects financially own vehicle damage along with third-party vehicle/property damage, and damage to a third-party person.
Accidental hospitalisation expenses
If you have been injured in a car accident, your car insurance policy will provide financial assistance to you under personal accident insurance cover, if you have added it as an add-on to the base car insurance policy.
Exclusions of Car insurance policy
If your car insurance policy has expired and you have not renewed it, then your insurance provider will not cover any financial losses for accidental damage or liability after the expiry of policy.
Damage to vehicle due to war
Damages incurred as a result of a war, nuclear attacks, hostilities, or invasion will not be covered by the policy.
Alcohol and drugs
In case of an accident, if the person driving the car is under the influence of alcohol or other intoxicants, the insurance will not cover incurred liabilities.
If the vehicle is purchased illegally or you have provided any fraud information to the insurance provider, your insurance cover will invalidate.
Void or no License
If the driver was driving the car without a valid driving license or against the Indian traffic laws during an accident, the insurance will not cover any type of financial loss.
Negligence on purpose
Consequential losses (such as you are driving the car even after gear oil is leaking) will not be covered in your car insurance plan.
Car Insurance Exclusions related to Add-ons
Wear And Tear Expenses
Wear and tear of your car’s mechanical or electrical parts is not included in your cover. However, with zero depreciation add-on, you can receive coverage for replacing these parts of your car.
Pillion Rider or Passenger Cover
Even if your car insurance includes personal accident cover, the passengers of your car are not covered. With passenger cover or extended accident cover, you can include passengers in the insurance coverage.
In case of theft or damage, your car insurance provider will only offer IDV of the car. However, with invoice cover add-on you can reimburse or receive full amount paid for repair or purchase. This is only applicable for the initial years since the purchase of the car.
How to buy car insurance online.
Car Insurance online can be purchased directly from the car insurance company’s official website or it can be purchased from insurance aggregator’s website from ProbusInsurance.com. Probus insurance gives you an edge by helping you compare and select the best suited and most affordable insurance plan for your car. It can help you save lots of money on premium and also give help you compare important features offered by the car insurance plans of different top-notch insurers.
Procedure Get Car Insurance Quotes Online
1. Car Model and Variant
Higher model cars and expensive cars generally have higher premium value.
2. Manufacture Year
With the help of the year of manufacture, your provider will assess insured declared value, based on which the premium is decided.
3. Car with CNG Fitting
Just like high-priced cars, CNG fitted cars also have slightly high premium.
4. Additional Covers
You need to assess if you need additional cover for enhanced insurance coverage for your car.
5. Documents needed
You will need to provide the registration certificate copy and fill proposal form.
Here’s how you can purchase and do your car insurance comparison online:
1. Visit insurance aggregator website like Probus Insurance and click on car insurance
2. Here, if you already have a policy, then Enter Your Car Number and select the relevant option from Your Previous Policy drop down.
3. If you want to buy an online car insurance for your new car, then click on Bought a new car.
4. Now, select your car, car model, and car registration year.
5. Enter which RTO will your car get registered at?
6. Enter your 10 digit mobile number and hit Compare Quotes.
7. Car insurance comparison online will be displayed, select your policy after checking Premium Breakup.
8. Provide when you want your policy to start and when your car was manufactured to receive the final quote.
Benefits of buying car insurance online
1. Hassle-Free Buy
Car insurance comparison online is hassle-free, and you can simply compare policies online, pick the one that suits your requirements, and get a quote. After that, you will have to provide some details and documents for verification.
2. Cost-effective Premium, Better Policy
Comparing car insurance policy online lets you evaluate similar policies with different pricing models. There is a possibility that your agent may advise you a car insurance that is costlier than any other insurance with similar features and add-ons. With this, online comparison gives you an option to choose relevant add-on covers that you may get in some policies but not in others.
3. Simple Renewal and Reminders
Renewal option in online policy is simple and you only need an internet connection. Your online car insurance provider will additionally send you renewal deadline reminders before the end date. And if in case you are not satisfied with your previous policy, you can shift your previous benefits to another policy with ease.
4. Easy Claim Process
If in case you and your car were involved in an accident, you may or may not get time to proceed with claim process in an offline insurance. However, if you have an online insurance, you can easily start the claim process online with just a gadget and internet access.
5. Get Discounts
Many insurance providers offer discounts on online purchase. If you buy your car insurance online, you can avail these discounts, which would otherwise may not be available offline
List of top car insurance companies in India
• Bajaj Allianz General Insurance Co. Ltd
• Bharti AXA General Insurance Co. Ltd
• HDFC ERGO General Insurance Company Limited
• ICICI LOMBARD General Insurance Co. Ltd
• Kotak Mahindra General Insurance Co. Ltd
• Tata AIG General Insurance Co. Ltd
• The Oriental Insurance Co. Ltd
• United India Insurance Co. Ltd
Easy Ways to Calculate Your Premium With Car Insurance Premium Calculator
The age and gender of a buyer play a crucial role in deciding the premium for the policy. People who are below 25 years old are more prone to accidents and thus might have to shell out a higher amount for the policy.
If you live in a city that has a dense population, the changes of incidents are also relatively higher. A higher insurance premium is imminent.
The fuel type of your car is also an important factor for the premiums. For an instance, a CNG fitted vehicle will fetch higher insurance premiums as compared to petrol or diesel cars. Also, the year of manufacture of your car is important. The older the vehicle is, the lower will be its insured declared value and likewise the premium.
The most prominent category for a discount is the NCB or no claim bonus. It ranges from a minimum of 20% up to a maximum of 50% for every consecutive year or no claims. There are some other forms of discount as well. If you install an anti-theft device approved from ARAI, you can get a 2.5% discount and likewise if you are part of an automotive association, you can expect some discounts.
It can get a bit overwhelming for someone new to consider all of the above factors and then come to a conclusion. It is at such times that car insurance premium calculator comes into the picture and how. These calculators take into consideration all of the factors and offer you quotes from either individual insurers or multiple insurers. A car insurance premium calculator allows a potential customer to change the parameters slightly and see how that impacts the premium as well. This way, they can pick up a policy that best suits their needs without burning a hole in their pockets. You can push the benefits to a level higher by opting to compare the quotes from different insurers online. You can save a considerable amount of money on the same.
Car Insurance Renewal
Car Insurance is normally bundled in the package when a person buys the new car. The insurance is only valid for a year and needs to be renewed after that. If a car owner fails to renew the car insurance then it will lapse and he or she will committing an offence as it is mandatory to have a valid car insurance to make the vehicle road legal. Hence Car insurance renewal is an important thing that needs to be taken care of. The ideal time span to renew the policy is recommended to be 30 days before the expiry date.
Documents required for car insurance renewal
While processing car insurance renewal, some documents need to be kept handy to ease and smooth out the procedures.
To decide the premium for the policy, information like make and model of your vehicle, registration date, registration place, name of the owner, lease/hypothecation details, etc. are required. The registration certificate contains all such information about the vehicle, and it would be better to have both a hard copy as well as a soft copy of the same.
Previous year’s policy documents
If you switch your car insurance renewal provider, then on clearing out your account from the previous company, you are provided with the no-claim bonus amount by the company. This amount is transferable, using which your premium amount for the insurance can be reduced to a nominal amount. Once you have all the information that needs to be furnished to the insurance provider or broker or agent, then, all you need is to complete some formalities and drive home tension free.
Important points to remember during car insurance renewal
• Provide the correct vehicle information to your car insurance provider like car make and model, car registration number, registration date, registration city, owner’s name, no-claim bonus eligibility etc. This information decides the amount you have to pay as car insurance premium.
• Compare various quotes offered by different companies and find out if there is any cashless facility offered by the company in your area.
• Ask for the add-on covers that the company is providing. If your car is new, then you can have a zero depreciation add-on cover.
• On receiving all the documents, do check for the correctness of even the smallest details in all of the documents.
• You can get your policy renewed instantly if it has not crossed its expiry date. If so, ask the insurer for an official vehicle check under the company policies. Information on this can be obtained by the broker or agent, after which you can proceed with the further processes as instructed by the insurer.
Car Insurance Claim Process
Inform the insurance company through phone, email or app
The first and foremost step of a claim is to inform your insurer at the earliest about the incident. Most insurers have strict timelines that they adhere to when it comes to claims. Thus, to be on the safe side, do call your insurer as soon as you meet with an accident or the earliest you get some free time.
FIR (First Information Report)
Though it is not mandatory for a claim settlement, it will surely aid you during the claim process. File an FIR at the nearest police station. And should the insurer ask for it, provide them with an original copy of the same.
Evaluation and Repairs (Cashless or Reimbursement)
Post a claim request, insurers usually send an independent representative to assess the situation or damages. Once the same is complete, you can take the help of your insurer to get the repairs done at a network garage or any other garage for that matter. Should the insurer ask for supporting documents, helping them will ensure a smoother process.
Approval of claim
Once your insurer is happy with all the documents that you have provided and the claim, they will approve the same. For network garages, the amount will be sent directly to the garage. For reimbursement cases, the same will be sent to the account number mentioned in the policy documents.
For a third-party liability policy claim, here is what you need to do.
For any claims related to third party liability policies, it is important to file an FIR and provide a copy of the same along with the claims form.
You will have to share a copy of your policy details with the third party. This will ensure that they can claim for the damages without your involvement.
All the third-party claims are settled in the Motor Accident Claims Tribunal. The third party who was involved in the accident must file for the claim in the tribunal.
Claiming Online in Car Insurance Plan
Insurers these days are going the extra mile to ensure that their policy holders have access to convenience and hassle-free experience. Thus, it was only a matter of time before insurers integrated the same with the claim’s settlement process. Now, you can log on to the website of your insurer and register a claim for your policy. Once you register the claim on the website, the process continues as usual as mentioned above.
After you have raised a request for the claim, the insurer would send for an independent representative to look into the claim and you must submit all the necessary documents. Documents such as claim form, KYC documents, a copy of the FIR, registration certificate of the car etc. are the usual asks. The claim settlement process continues as usual.
GST on Motor Policy
The GST was implemented by the government to centralise the tax imposition in the country. The car insurance has been categorised under general insurance class in GST. Due to this a GST of 18% is levied on car insurance. This means there is a hike of 3% with regards to tax on car insurance. This has made car insurance slightly more expensive than the previous tax rules.
Bundled Car Insurance
As per the IRDAI circular, with the introduction of long-term Motor Third Party Insurance, a car insurance applicant should be given two options—Long-term package cover offering both Third Party insurance and Own Damage Cover insurance for 3 years as the case may be or a bundled cover with a 3-year term for the Third Party component and a 1-year term for the own damage cover. This means that the car owner can attach Own damage cover on annual basis with the long-term third-party cover policy.
An endorsement can be due to various reasons and to know more about endorsement policies for car insurance are mentioned below
• Change in the car insurance owner/policy holder’s address
• Changes in car owner/policy holder’s name
• Change in car owner/policy holder’s email id or mobile number or both
• Change in the car registration number
• Change in the car engine number
• Change in the car model and built
• Change in the car variant
• Increasing voluntary deductible
• Correction of premium
• Correction in the car’s Insured Declared Value (IDV)
• Corrections of No Claim Bonus (NCB)
• Transfer of ownership of the car
How to Make an Endorsement
It is very easy nowadays to make an endorsement in the car insurance policy. All the policyholder has to do is to contact the insurance company via phone, email, letter etc and inform about the changes to be made. The insurance company will analyse the request and if feasible will ask for the necessary documentation. After submission of the required documents, the insurance company will verify the documents submitted and approve the request. Once the changes are made the updated policy will be issued to the policyholder.
New Update on Motor Insurance as per Supreme Court Order 2019
As per the Honourable Supreme Court of India order, if a person buys a car after 1st September 2019 then he or she has to compulsory take third party car insurance for 3 years. Although OD (Own Damage) cover can be taken for 1 year at a time and does not need to be bundled up with the long term third party car insurance package. So now there are 3 option a new car owner can select for car insurance.
Option 1 – Third party cover for 3 years and Own damage for 3 years
Option 2 – Third party cover for 3 years and Own damage for 1 years
Option 3 – Third party standalone cover only