Car Insurance is basically a contract between insured (you) and the insurer (insurance company) wherein you pay a premium for a policy that will provide protection against financial losses if the insured car is damaged or stolen. Car insurance covers theft and damage to your car or damage that your car causes, plus liability protection in case you are sued pursuant to an accident.
Is Car Insurance mandatory in India?
Under provisions of the India Motor Vehicles Act 1988, it is mandatory that every vehicle has a valid Insurance to drive on the road. Any vehicle used for any purpose, including personal, commercial or business purpose should be insured.
What are the types of Car Insurance policy?
Generally there are two types of car insurance
- Liability Only Insurance Policy (Third Party Insurance)
- Comprehensive Insurance
What is Liability only Policy?
Liability only Policy protects a policyholder against losses, which arise due to bodily injury/death to a third party or any damage to its property.
What is Comprehensive policy?
Comprehensive policy also called package policy covers both loss/ damage to insured vehicle and Third Party Liability. It entitles you to claim compensation in case your vehicle is stolen or damaged. In addition, it also covers additional liabilities as provided by the India Motor Tariff.
What factors determine the premium amount?
Make and Model of the Vehicle, Year of Manufacture, Place of Registration, Showroom price of the vehicle, whether you are individual or corporate.
What is not included in car insurance?
Car Insurance does not cover drunken driving, depreciation, consequential loss, wears and tears, mechanical/ electrical breakdown, war perils, or vehicle driven by someone else other than the driver stated in driver’s clause. The insurance also does not cover failure or breakage when the vehicle is used outside the geographical area.
What are the different risks covered under the Own Damage Cover?
It covers loss or damage to the vehicle and accessories/fittings (if insured) arising out of the following risks:
- Fire, explosion, self-ignition or lightning Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone, Hailstorm Burglary, housebreaking or theft Riot and strike Earthquake (fire and shock damage)
- Accidental external means Malicious Act Terrorist Activity
- Whilst in transit by road, rail, inland waterway, lift, elevator or air Landslide, Rockslide.
What is the IDV?
The Insured Declared Value (IDV) of the vehicle will be deemed to be the ‘SUM INSURED’ for insurance, 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 based on manufacturer’s listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance.
The IDV of the car and / or accessories, if any, fitted to the vehicle but not included in the manufacturer’s listed selling price of the vehicle is also, likewise, to be fixed.
The Schedule of Depreciation for fixing IDV of the Vehicle:
|Age Of The Vehicle|| |
% Of Depreciation For Fixing IDV Of The Vehicle
|Not exceeding 6 months|| |
|Exceeding 6 months but not exceeding 1 year|| |
|Exceeding 1 year but not exceeding 2 years|| |
|Exceeding 2 years but not exceeding 3 years|| |
|Exceeding 3 years but not exceeding 4 years|| |
|Exceeding 4 years but not exceeding 5 years|| |
- IDV of the vehicle beyond 5 years of age and of obsolete models of the vehicles (i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between the insurer and the insured.
- IDV shall be treated as the ‘Market Value’ throughout the policy period without any further depreciation for the purpose of Total Loss / Constructive Total Loss (TL/CTL) claims. The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and / or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle.
What is No Claim Bonus?
No Claim Bonus (NCB) is a discount on the premium of the “Own Damage Cover” part of your vehicle when you renew your policy, provided you have not made any claim during the last policy period of one year. The NCB can be accumulated up to a maximum limit of 50% on OD premium. You can transfer the full benefits of NCB, even if you switch your insurance company.
Find below the NCB Chart:
|All Types of Vehicles||% of Discount on OD* premium|
|No claim made or pending during the preceding full year of insurance||20%|
|No claim made or pending during the preceding 2 consecutive years of insurance||25%|
|No claim made or pending during the preceding 3 consecutive years of insurance||35%|
|No claim made or pending during the preceding 4 consecutive years of insurance||45%|
|No claim made or pending during the preceding 5 consecutive years of insurance||50%|
No claim bonus will only be allowed provided the policy is renewed within 90 days of the expiry date of the previous policy.
Can the accessories be insured?
Additional accessories can be insured under the comprehensive policy for an additional amount. Factory fitted accessories are automatically insured under the policy.
What is Anti-theft Discount?
Vehicles fitted with ARAI approved anti-theft devices and whose installation is duly certified by any of the Automobile Associations of India, are eligible for a discount of 2.5% on the OD (own damage) component of premium subject to a maximum of Rs. 500/-.
What is Automobile Association Membership Discount?
If you have a valid membership of recognized Automobile Associations such as Automobile Association of Eastern India, the Western India Automobile Association, etc., a discount @ 5% of the Own Damage premium, subject to a maximum of Rs. 200/- for a Private Car is allowed.
What is Zero Dep Policy?
Zero depreciation cover, also called ‘zero dep’ policy, offers complete coverage without factoring in depreciation. It means, if your car gets damaged following a collision, you will receive the entire cost from the insurer.
What is Voluntary Deductible?
Voluntary deductible is the minimum amount that you declare to bear at the time of claim. When you opt for a higher deductible, you are eligible for a higher discount.
Depreciation Rate for Insurance Claim:
- For all rubber / nylon / plastic parts, tires and tubes, batteries and air bags – 50%
- For fiber glass components – 30%
- For all parts made of glass – Nil
- Rate of depreciation for all other parts including wooden parts will be as per the following schedule:
|Age Of The Vehicle||% Of Depreciation For Fixing IDV Of The Vehicle|
|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%|
What is cashless claim settlement?
Most of the insurance companies have network of workshops / garages which are used to do accidental repairs. In case of a claim repairs performed in the network of garages, the amount payable by the insurance company is directly paid to the garage. You will have to pay only the difference amount that would be the depreciation component and / or repairs not covered / approved by the insurance company.
I bought a used car, the insurance is in the name of the previous owner. How do I transfer the insurance in my name?
In case of used car insurance transfer, you need to contact the insurance company, submit the transferred RC (in your name) or Form 29, 30 duly signed, copy of insurance. Insurance company will physically inspect the car and then transfer the insurance in your name. Insurance company shall charge a nominal amount for inspection, you also need to pay no-claim bonus (NCB) amount (if any).
Find below contact details of various insurance companies for quick reference:
|Insurance Company||Helpline Number||Email Id|
|Future Generali||18605-00-3333 / firstname.lastname@example.org|
|Cholamandalam General Insuranceemail@example.com|
|Bajaj Allianz General Insurance||1800-209-0144 |
|Bharti AXA General Insurancefirstname.lastname@example.org|
|HDFC ERGO General Insurance Companyemail@example.com|
|L&T General Insurancefirstname.lastname@example.org|
|Liberty Videocon General Insuranceemail@example.com|
|Reliance General Insurancefirstname.lastname@example.org|
|Tata AIG Generalemail@example.com|
|Royal Sundaram General Insurancefirstname.lastname@example.org|
Visit Direct Cars, Car Insurance section to buy or renew your car insurance online.