Car Insurance- Types, Compare, Online Buy and Renewal

Car Insurance is a challan saving document for many car owners. But, unfortunately, if you met with an accident it may prove to be a very useful tool. If you have a proper policy, it can save you fortunes. So, you should choose your car insurance policy very carefully and a little knowledge about the main terms of the car insurance will make it easy for you to choose the right policy. So let’s explore Car Insurance in India.

Is car insurance compulsory in India?

Yes, it is necessary to have basic third-party insurance, without which you are not allowed to drive a car and you can face a challan from the police.

Why car insurance is necessary?

Suppose you are driving a car on road, and met with an accident and damaged the other car, property, and also injured a person in the accident. If you are not so wealthy that you can compensate for the damage done, then in that case there must be someone to compensate for the amount of damage.

So the Insurance Regulatory and Development Authority of India (IRDA) made it compulsory to have third-party insurance. So that compensation can be made in case of an accident.

Types of Car Insurance

There are mainly three types of Car Insurance. Let’s explore each of them in detail.

  • Third Party Insurance
  • First Party Insurance or Comprehensive Insurance
  • Own Damage Insurance (OD)

The other terms you may have heard, like Zero Dept Insurance, Return to Invoice (Total Damage), are the add-on features in First Party Insurance and not the separate Insurances.

Third Party Insurance

First let’s understand what is the meaning of First Party, Second Party, and Third Party.

  • First Party: You, the owner/ Driver of the Car is called First Party in Insurance term.
  • Second Party: The insurance company is called the second party.
  • Third Party: Any oher Car, property, or person involved in accident is called third party.

So, as the name suggests, the Third Party insurance is the cover for any other Car, Property, or any person involved in the accident. If you met with an accident and the fault was yours then your insurance company is liable to pay the compensation for any loss of car, property, or person (third party).

In the same way, if you met with an accident due to the fault of another person and your car got damaged and you also got some injuries, then the insurance company of another person will pay you the compensation amount.

Except for me, and my car everything is covered by third-party insurance. In case of an accident, the repairing cost of own car is to be paid by the owner himself.

Along with the third party compensation, IRDA has also made it mandatory to cover the Personal Accident Cover for the driver also in case of death/ Seriously injured condition. Check detail document from this link IRDA PA Cover Guidelines

Let’s understand it with an example, Suppose I have third-party insurance for my car and I met with an accident and I got seriously injured or died. I have been covered in the Personal Accident cover of Rs. 15 Lakhs which is automatically and compulsorily included in the third party insurance.

Having at least third-party insurance is mandatory in India when you are driving your car. If you don’t have third-party insurance, then you may face challan from the police.

You cannot have add-ons like zero depreciation, Return to invoice (Total Loss) with third-party insurance.

First Party Insurance or Comprehensive Insurance

First Party or Comprehensive Insurance is the cover for any injury to a person, vehicle damage, other property damage involved in the accident.

The comprehensive insurance generally covers the following things about the car:

  • Metal Parts of car: 100% Insured
  • Plasic Parts: 50% insured
  • Glass (Wind Shield): 50% insured
  • Rubber (Tyre): 50% insured

In Comprehensive insurance, there are options of add ons which can be taken as per the requirement. As you keep increasing the add-on features, your premium will also increase proportionally. The major add on features in the car insurance includes the following:

✅ Zero Dept Insurance Add On

In zero depreciation (zero dept) insurance, all the costs will be covered by the insurance company. The cost of Zero Dept Insurance may cost around 30% more than the normal first-party insurance.

Zero Dept insurance can be taken as add on only if the car is not older than 5 years.

In a single year, a maximum of 2 claims can be availed under zero dept insurance. In the case of the third accident in the same year, the cost will be paid by the owner himself.

In the case of Zero Dept Insurance, what do we have to pay?

  • File Charges
  • Cost of Consumable parts i.e. lubricants, coolant, brake oil, nut, bolt, bearing. How ever this can be insured by choosing the consumable goods ad on feature.
  • Salvage Cost: Salvage in car insurance refers to the material value of the damaged parts of the car in an accident, which have been approved to be sold in the market. This amount is deducted from the claim amount. In many accident cases it happens that the car is ruined beyond repair.

✅ Return to Invoice (Total Loss/ Toal Damage) Add On

Suppose the car has such an accident that it can not be repaired or recovered, or the car is burnt. In that case, the return to invoice insurance feature can be used. This feature can be availed only for the first 2-3 years of the new car.

✅ Other Add on Features in Car Insurance

Along with the zero dept and total loss, there are some other add-on features in the car insurance policy which are given below. The More add-on you will take into your policy, the more premium will be charged.

  • 24*7 Road Assistance: Helps in emergency situation e.g. flat tyre repair, fuel, delivery breakdown repair service, car towing, etc
  • Engine Protection Cover: Helps in repair or replacement of your damaged engine or its damaged parts like piston and connecting rods in case of oil leakage or water ingression
  • No Claim Bonus (NCB Protector): it helps in getting bonus, when you renew the policy with the same insurer.
  • Key and Lock Replacement: Cost covers to replace the car keys and locks or locksmith charges, if your car keys are stolen, damaged.
  • Consumables: Need to be replaced or refilled frequently like nut, bolt, engine oil, coolant and other consumed goods. It helps in getting claim of these things in case of accident.
  • Daily Allownance: When your car in getting repaired in the agency in case of accident, then the insurance company will pay you the charges of hiring an alternative vehicle.
  • Paid Driver Cover: Helps in financial assistance for your paid driver in case of disablement or death of the driver due to accident.
  • Accessories Cover
  • Passenger Cover
  • Invoice Price:
  • Tyre Protector
  • RIM Damage Cover
  • Loss of Personal Belongings

✅ Own Damage Cover

Own Damage (OD) helps you stay covered against damage caused to your vehicle due to accidents like fire, theft, etc. In case of an accident, your own damage cover compensates you for the expense to repair or replace parts of your two-wheeler damaged in the accident.

Suppose you have third-party insurance which does not cover your vehicle damage, then you can avail of Own Damage (OD) Cover.

Also Check:

First Party and Third Party Insurance Comparision

WHAT IS COVERED?THIRD-PARTYCOMPREHENSIVE
Third-Party Vehicle Damage
Third-Party Property Damage
Own Vehicle Damage
Vehicle Theft
Fire Damage
No Claim Bonus
Cashless Claim
Damage from Natural Calamities
Personal Accident Covered
Engine ProtectionAdd-on
Zero Depreciation CoverAdd-on
NCB ProtectionAdd-on
Invoice CoverAdd-on

Watch Video to know more about the Car Insurance

What is IDV in Insurance

Insured Declared Value (IDV) refers to the maximum claim that the insurance company will pay if your vehicle is damaged beyond repair or is stolen. Suppose the market value of your car is Rs 10 lakh when you buy the policy. That means the insurer will disburse a maximum amount of Rs 10 lakh.

You may choose the insured declared value (IDV) of your car but with an upper and lower limit.

The cost of the insurance is dependent on the IDV. Higher IDV will attract higher premiums.

When You Will Not Get Car Insurance Claim

Even if you have an insurance policy; it is possible that still you may not get any claim against your car insurance. These are the cases when you will not get any benefit from any car policy.

  • If the driver do not have a valid driving licence.
  • If the driver is under the influence of any drug, alcohol, etc
  • If car is involved in any illegal activity at the time of accident, then you will not get any claim

Car Insurance Calculator

You can use various tools to calculate the Car Insurance and by choosing the IDV, Vehicle Details, etc. Here we have listed some top Car Insurance Calculators. Check it out.

Insurance Dekho Car Insurance CalculatorClick Here
Policy Bazaar Car Insurance CalculatorClick Here
Bajaj Allianz Car Insurance CalculatorClick Here
HDFC ERGO Car Insurance Calculator Click Here

How to get cheap car insurance

We are referring to the cheap word here but let us clarify that we don’t promote having third-party insurance to save some money. Rather we want you to choose the best policy for your car at the minimum price in the market. So how you will find that “Best Car Insurance” for you. Follow these steps to get cheap car insurance.

Before you go for car insurance you should keep one thing in mind that never undervalue your vehicle under Insured Declared Value (IDV).

  • Understand your requirements: Decide wheter you need 3rd party or 1st party insurance and what add ons will you need.
  • Compare and Chose: This is the most important step and you should compare the plans of various companies online alongwith the offline insurance dealer and choose the best and cheap policy. You can definitely save some amount if you do this step seriously.
  • Look for Discounts: There are various schemes and discounts which are given by various companies from time to time, so may also look for any such discount.
  • Choose your Add Ons: This step is also very important that you choose the right add ons like zero dept, Total Damage, Tyre Cover, Road Assisance, etc as per your requirement.

Compare Car Insurance

Here we have given the most popular tools which are used to compare Car Insurance. You can follow any one of these.

Policy Bazaar Car Insurance CompareClick Here
Insurance Dekho Car Insurance CompareClick Here
Coverfox Car Insurance CompareClick Here
Bank Bazaar Car Insurance CompareClick Here

How to File an Online Car Insurance Claim

In case of an accidental emergency that requires immediate hospitalization, you need to inform your car insurance provider instantly. Here is a step-by-step guide to filing an online car insurance claim:

  • The first step is to keep track of all the relevant information and the surrounding environment
  • Record the time and date of the accident
  • Contact details of the person involved, driving license, and car number details
  • Take assistance from the traffic police
  • In case of injury to a third party, admit the individual to a nearby hospital
  • Get your four wheeler insurance policy details
  • Contact the local police and file an FIR
  • Intimate the claim to your respective insurer
  • Submit the relevant documents/ information to the insurer
  • Estimate the loss and cost of repair
  • Your car will be subject to inspection by the surveyor
  • Based on the final decision of the surveyor, the claim will be settled accordingly

Documents Required for Filing a Car Insurance Claim

  • Copy of policy, complaint/ FIR
  • Duly filled claim form
  • Driving license
  • Fitness certificate/ PUC for commercial vehicles
  • Car Registration Certificate (RC)
  • Insurance Policy Document and Endorsement

Car Insurance Online Buy

There are two ways to buy car insurance.

  • Through Local Dealer/ Insurance Agent (Offline)
  • Online

Here we have listed major companies which provide car insurance online. You can click on the link to buy car insurance online.

CompanyApply Link
Reliance General Car InsuranceClick Here
ICICI Lombard Car InsuranceClick Here
Bharti AXA Car InsuranceClick Here
IFFCO Tokio Car InsuranceClick Here
HDFC ERGO Car InsuranceClick Here
Bajaj Allianz Car InsuranceClick Here
ACKO Car InsuranceClick Here
Go Digit Car InsuranceClick Here
UIICL Car InsuranceClick Here
Tata AIG Car InsuranceClick Here
Oriental Car InsuranceClick Here

FAQs

What is IDV in Car Insurance?

Insured Declared Value (IDV) refers to the maximum claim that the insurance company will pay if your vehicle is damaged beyond repair or is stolen. Suppose the market value of your car is Rs 10 lakh when you buy the policy. That means the insurer will disburse a maximum amount of Rs 10 lakh.

What Is Comprehensive Car Insurance?

First Party or Comprehensive Insurance is the cover for any injury to a person, vehicle damage, other property damage involved in the accident.

If you have any queries or suggestions, you can comment in the comment section below.

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