Clarify All Doubts Related To Car Insurance

Car insurance policy is a protection plan for your car against any damages caused due to accidents or any of the covered calamities.Enter basic details about your car like your car purchase/registration date, RTO location, car manufacturer, model and variant and get quotes from various car insurance providers instantly.

A car insurance policy covers the financial liability which arises in case the insured car injures any third party life 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, it is allowed to run on Indian roads. The car owner is the policyholder who is required to pay the premium on an annual basis.
A car insurance policy is mandatory as per the rules of the Motor Vehicles Act, 1988. Thus, to legally drive your car in India, you need to have at least a third party car insurance policy. Moreover, the policy will provide financial assistance in case of third party propertydamages caused by your car in case of accidents. In case an individual suffers an injury or dies due to the car, you can face a considerable financial liability for the loss caused. The policy also covers this liability and gives you financial relief. Moreover, opting for a comprehensive car insurance policywill also help cover the damages suffered by your car in case of accidents or theft. Such policies pay for the repair of the car or compensate your financially in case of thefts.
Following are some of the advantages of having an insurance policy for your car:
  • 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 liability is quite high. This however gets covered by a car insurance policy.
  • If your car faces damages in an accident, the repair costs are quite high. The more expensive the car is, the higher would be its expenses. This might burn a hole in your pocket. If you buy a comprehensive car insurance plan such repair costs are also covered.
  • 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 too.
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 IRDAI and they are very low, so buying a third party insurance is not a problem
  • Comprehensive package policy– It is an all-inclusive policy which is also known as 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 get 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 the accident. Premiums for this policy are higher because of a wider scope of coverage available under these policies.
  • Standalone Own damage plan –It provides protection against damages to your car in case of accidents, theft, fire or natural calamities similar to OD component in comprehensive policy. However this plan can be bought only if you already have an existing third party insurance cover valid for at-least a year.
It is always recommended to compare car insurance policy before making a purchase. Following are some of the reasons to do so:
  • 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.
  • 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 offered 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
  • Get 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.
  • Get extensive coverages – the coverage features across different car insurance plans also vary. Some companies might have all the covers required for you while others might not offer so. 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.
  • Avail 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.
  • Get cashless garage service– Every car insurance company has a tie up with a number of garages across the country. However it is always recommended to go for the company that has an exhaustive network of such garages. You can hence compare which insurers have higher network garages available at your location.
Coverage under a comprehensive 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
  • Damages suffered due to accidents
  • Damages suffered 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 compensates for hospitalisation expense for injuries or accidental deaths up to a specified limit.
The following losses are generally excluded in a car insurance policy:
  • Normal wear and tear of the car parts
  • Normal wear and tear of the car parts
  • Damages caused by mechanical or electrical breakdowns
  • Damages due to intentional accidents, overloading, or using the car in violation of its usage limitations
  • Any type of consequential loss
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 are the various add-ons available for you:
  • Roadside assistance – provides 24x7 assistance in case of breakdowns
  • Zero depreciation cover – depreciation is not applied on damage parts during compensation by the insurer
  • NCB Protect – helps you protect your no claim bonus even after a claim in made
  • Return to invoice – invoice value of the car will be paid without any depreciation applied on the IDV
  • Consumables cover – covers the cost of consumables like engine oil, coolant, etc.
  • Engine gearbox protection – covers damages caused to engine and gearbox especially due to floods
  • Key replacement cover – compensates when you misplace car keys
  • Tyre replacement cover – damages to tyre and tubes get covered
  • Loss of personal belongings – reimburses in case of belongings lost from your car
  • Personal accident cover for passengers –named passengers get a personal accident cover
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 -
  • IDV – 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.
  • Coverage features– 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.
  • Premium rate– 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.
  • Add-ons available – 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.
  • Discounts available– 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.
The process of comparing car insurance policies on Policy anchor is quick and easy. You need to follow the below-mentioned steps:
  • Choose the option of ‘Car Insurance’
  • Then select the RTO where your car is registered, manufacturer name, model, variant and purchase/registration date
  • If you are renewing your car insurance, then you’ll need to provide details of your previous policy e.g. policy expiry date, existing NCB and number of claims made etc.
  • Based on the details shared, you will get instant quotes from all leading insurers for your car
  • You can compare the plans based on their IDV, coverage, premium and add-ons available
  • You can choose a policy that best suits your needs and proceed to proposal form
  • On completing the proposal form, you can review all details shared till now in the summary page and choose to make payment
  • After premium is paid, the policy gets generated. You would get the soft copy of the policy immediately on your email. The hard copy would be sent within 7 days
In case of a car insurance claim, the costs incurred on repairing or replacing the damaged parts are reduced with appropriate depreciations incurred on the parts. As a result, 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 plastic and metal parts of car. This cover is mostly available for cars of age up to 5 years. Also, when you are opting for this add on cover, you need to make sure this add on was available in your previous policy also. Else the insurer might ask for a vehicle inspection if there is a gap.
A personal accident cover protects the owner driver of the car involved in an accident. In case of hospitalisation or accidental death, this cover will compensate for the financial losses incurred. Hence it is covered within a car insurance policy. Also, government has made it mandatory to have a compulsory personal accident cover of Rs 15 lakh along with car insurance policy.
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. You need to intimate your insurer about the problem and they will make necessary arrangements like onsite repairs, tyre changes, fuel tank fill ups, battery jump starts or towing facility in case of major damages
No claim bonus is an incentive provided by the insurer in case you do not have any claims made in a policy year. The incentive is in the form of a discount given on the Own Damage component of a comprehensive car insurance policy. This discount can go upto 55% of the OD vaue. However NCB gets forfeited in following cases:
  • If there is any claim made
  • If there is a break in the insurance period for more than 90 days
You earn a No Claim discount in the year when you don’t make a car insurance claim. This discount accumulates for every claim free year and gets applied on the Own Damage component of your insurance premium at thetime of renewal. 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. The add on will not only protect your existing NCB but will help you take it to the next slab during renewal even though there was a claim made. This cover can be used for upto 3 claims depending on the insurance company.
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 compensation paid to the owner is the depreciated value of the car based on the age of the vehicle. This add-on ensures that in such cases the invoice value of the car is paid without factoring in depreciation. This cover might be available for cars up-to the age of 3 years as per the underwriting policy of the insurance company.
During heavy rains, driving your car through flooded roads can lead to engine and transmission box seizures due to water ingression. Repairing such damages can be a very costly affair. This cover will compensate for such damages caused to engine and gearbox due to rain or flood. It also covers damage caused to the engine by leakage of lubricant or coolant due to accidents. The insurer will pay for repair and replacement of all the internal parts and also compensate for the labour costs involved, costs of lubricants or consumables required to undertake the repairs. This cover can be opted for cars up to 3 years of age.
This covers Legal liability to paid drivers /and/or cleaner employed in connection with the operation and/or maintenance of motor vehicle under the Workmen's Compensation Act, Fatal Accidents Act and at Common Law.
You can insure your vehicle accessories under electrical and non- electrical items whose amount is not included in the showroom price of the car but are fitted separately to the vehicle. For that you need to declare the value of such items separately, which will be added to the sum insured over and above the IDV (Insured's Declared Value).
The value of accessories is calculated on the original cost of purchase of the accessory less depreciation for the usage. The depreciation is applied at the same rate as is applied for a vehicle for calculating IDV (Insured's Declared Value).
If the person driving the vehicle has a valid license, the vehicle is insured for all the accidents that occurred due to the hazards specified. To insure the person driving the vehicle, who is not the owner, an additional personal accident cover has to be taken for unnamed passengers. For the owner-driver, the policy compulsorily has a personal accident cover, as per tariff.
In case of vehicles fitted with bi-fuel system such as Petrol/ Diesel and CNG/LPG, permitted by the RTO concerned, the CNG/LPG kit fitted to the vehicle is to be insured separately at an additional premium of 4% on the value of such kit. You need to specifically declare this in the proposal form
The Insured's Declared Value (IDV) of the vehicle will be deemed to be the 'SUM INSURED' for the purpose of motor tariff and it will be fixed at the commencement of each policy period for each insured vehicle. The IDV of the vehicle is to be fixed on the basis of manufacturer's listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation (as per schedule specified below). The depreciation gets applied on the IDV in form of percentage based on the age of car as shown below:
  • Not exceeding 6 months: 5%
  • Exceeding 6 months but not exceeding 1 year: 15%
  • Exceeding 1 year but not exceeding 2 years: 20%
  • Exceeding 2 years but not exceeding 3 years: 30%
  • Exceeding 3 years but not exceeding 4 years: 40%
  • Exceeding 4 years but not exceeding 5 years: 50%
Premium is the amount which you pay to the insurance company for the coverage that the insurer is allowing under its car insurance policy. The insurance company covers specific financial risks and for covering your risks you have to pay a premium for the policy on an annual basis. The premium payable on a car depends on:
  • Type of vehicle
  • Age of vehicle
  • City of registration
  • Period of coverage (1 year or 3 year bundled cover for new car)
  • Add on covers opted
  • Any applicable discounts/loadings, as per the underwriting rules of the insurer in case of break in cases
You can pay premium online through one of the various modes of payment offered by insurance companies. Once you have shortlisted a car insurance plan and filled the proposal form, you will be redirected to the payment page of the insurance company. You can then choose to pay through credit or debit cards, net banking, wallets or UPI.
Yes, you would be required to pay premium again. However you can avail the benefit of No Claim Bonus offered by your insurance company. Through this benefit, you can get discount of upto 55% on own damage component of your insurance premium depending on number of claim free years and the insurance company’s policy.
The premium of your car insurance policy depends on the place where the car is registered. If the car is registered in a metropolitan city, the premiums would be higher. Even if you use the car in a non-metro city while the car has the registration number of a metro city, the premium for a metro city would be applicable.
A discount of 50% is available on the own damage premium provided they modify such vehicles for use. The above discount is also available for institutions exclusively engaged in the service of the handicapped.
Yes, as a member of any of the following Automobile Association, a discount is given under the policy. The Associations are:
  • Automobile Association of Eastern India
  • The United Province Automobile Association
  • The Western India Automobile Association
  • The Automobile Association of Southern India
  • The Automobile Association of Upper India
If the vehicle is fitted with anti-theft devices, which is approved by the Automobile Research Association of India (ARAI), a discount on own damage premium is allowed.
ARAI stands for Automotive Research Association of India. In case you have installed ARAI approved anti-theft device in your vehicle, whose installation is duly certified by the agency, you get a discount of 2.5% on the OD Premium to a maximum of Rs.500.f the handicapped.
Car insurance online claim is when you raise a claim on your car insurance policy online. To make a claim you can contact Policy anchor and the company's claim team would help you get your car insurance claims settled at the earliest. You can reach Policy anchor at our toll free number +91 9773958883 or drop us an email at support@policyanchor.com and our support team would get in touch with you to help with your claim procedure. Alternatively, you can get your claims settled through your insurance company. You can send an email to the insurance company intimating them about your claim. You can also call the company’s claim helpline and register your claim. The company would then guide you on the process of car insurance claim settlement. A car insurance claim occurs in case of theft of the car, third party liability and if your own car is damaged in an accident or a calamity.
In case of a claim, you need to submit a claim form which should be completely filled and signed. Along with the form, the policy document, driving license, police FIR if you have suffered a third party liability or theft of the car, the keys of the car in case of theft claims and your identity proof. Thereafter, the insurance company would process your claim. If you take the vehicle to a networked garage for repairs, a claim estimate report would be prepared and submitted by the insurance company’s surveyor. All repair bills in original should also be submitted to the company for settlement of claims. You can also contact Policy anchor for your car insurance claims. Policy anchor helps its customers get their claim settlements at the earliest. Just intimate your claim to Policy anchor at +91 9773958883 or by sending a mail to support@policyanchor.com and Policy anchor would help guide you with the claim process and the documents that you need to submit.
Generally following procedure adopted by the insurers once the claim form is filled and filed along with the necessary documents.
  • The surveyor attends the claim within 24 hours from the time of intimation.
  • Take photographs, assess, estimate and inform assessed estimates to the User within the same day of assessment.
  • After the completion of the job, the Surveyor carries out re-inspection. The insured then makes payment to the workshop/ garage as per the surveyor's assessed estimation and releases a proof of release document. (The proof of release is an authenticated document signed by the insured to release his vehicle from the garage after it is checked and repaired).
  • Lastly, the insured submits the original bill, proof of release and cash receipt (derived from the garage) to the surveyor.
  • The surveyor then sends the claim file to the Insurance Company for settlement along with all the documents.
  • Insurance company then reimburses the Customer within seven working days from the date of receipt of claim file.
Yes, if you take your vehicle to insurer's authorized garage/workshop for which insurer have agreement for cashless facility, you can avail cashless repair of damages. These garages come under network garages.
Insured will have to bear the following charges:
  • The amount of depreciation as per the rate prescribed in case zero depreciation cover is not availed
    • Reasonable value of salvage
      • Compulsory and voluntary deductions under the policy, if insured have opted for it.
The claim is still valid even after the expiry of the policy date because the event took place during the policy period.
Yes, if claim is filed for any kind of damages during the insured period, at renewal, all the NCB ceases that have been accrued over the years. So it is advisable to always compare the amount of future NCB and claims before filing for any claim.
Deductible is the portion of claim that is not insured under the policy. Voluntary deductible is the amount that you have to compulsorily bear during the event of a claim. For e.g., if your claim amount is 15,000 and the voluntary deductible is 4000, then you have to bear the first 4000 and the claim will be worth 11000. Discount on the premium is given for choosing higher deductible. There is also a compulsory deductible applicable as per the Indian Motor Tariff:
  • Private Cars (Not exceeding 1500cc) 500
  • Private Cars (Exceeding 1500cc) 1000
The insurance company can deny your claims in various instances. If you make a claim for an excluded coverage, the claim would be denied. If the claim process is not properly followed and you did not submit the required documents, the claim would be denied. Fraudulent claims are always denied by the insurance company. Moreover, if your policy has expired and you did not renew it, any claims made on the policy would be denied if the event occurred after the policy expiry date.