Car Insurance- the value cars hold in our life!

Car Insurance- the value cars hold in our life!

 Car Insurance- the value cars hold in our life!

Car insurance is a type of insurance that provides coverage to the car and its owner against unforeseen accidents resulting in monetary loss. A vehicle insurance policy is the contract in which the insurer covers on-road liabilities and damages to the insured motorist's property due to third-party claims and own damage.
 

What is Car Insurance?

It is a type of policy that protects you and your car against liability in the event of an accident, theft, fire, calamity, or third-party person or property damage. It also covers the owner-driver's accident damages or hospitalization expenses.
 

Why Do You Need A Car Insurance Policy?

Investing in a car insurance policy is a crucial step for several reasons –

  • Legal Requirement

According to the Motor Vehicles Act, driving a vehicle without insurance in a public place is an offence that can result in significant penalties. Based on this, a first violation incurs a Rs. 2000 fine, escalating to Rs. 4000 for subsequent offences. Additionally, imprisonment for up to 3 months may be imposed, subject to legal discretion.

  • Offers Financial Protection

Buying a vehicle already comes with a hefty price tag, and dealing with the repair costs after significant damage can be a real financial hurdle. And this is why a car insurance policy serves as a financial safety net that protects you from unforeseen events such as accidents, theft, or substantial damage to your vehicle.

  • Covers a Wide Range of Risks

A car insurance policy covers a wide array of risks, such as theft, accidents, man made disasters, natural calamities, etc. It not only safeguards your vehicle; it also extends protection to you against legal liabilities arising from damages or financial losses inflicted upon a third party or their property.
 

Features of a Car Insurance Policy

Listed below are some of the key aspects of a car insurance policy –

  • Third-Party Liability Coverage

Mandatory by law, it protects you against bodily injury and property damage liability caused to a third party in the event of an accident.

  • Own Damage Coverage

It protects your vehicle from damages caused by accidents, natural disasters, theft, vandalism, etc.

  • Personal Accident Cover

It provides coverage for injuries or death of the owner/driver of the insured vehicle.

  • No Claim Bonus (NCB)

A No Claim Bonus is a reward offered by the insurance company if you go claim-free during a policy year. It is provided as a discount on your renewal premium for responsible driving.

  • Voluntary Deductibles

You have the option to cover a portion of the claim yourself before the insurance company steps in to pay for your expenses. This is known as voluntary deductible. If you opt for a higher deductible, you can enjoy lower premiums.

  • Zero Depreciation Cover

With this cover, you will receive the full value for replaced car parts without factoring in depreciation.

  • Engine Protection Cover

It safeguards your engine against water damage, oil leakage, gearbox issues, etc.

  • Roadside Assistance Cover

With this cover, you can enjoy various services like towing, battery jump-start, tire assistance, emergency fuel delivery, etc. in case your vehicle faces any breakdowns.

  • NCB Protection Cover

This cover helps you keep your No Claim Bonus intact even after a claim.

  • Return to Invoice (RTI) Cover

With this cover, you can get the original invoice value of your car in the unfortunate event of total loss or theft.

  • Loss of Personal Belongings Cover

It provides coverage against the loss of personal belongings inside the car in the event of an accident or theft.

  • Consumables Cover

It provides coverage for the replacement cost of consumables like nuts, bolts, engine oil, lubricants, etc., employed during repairs.

  • Geographical Area Extension

With this cover, you have the option to extend your coverage beyond India's borders to neighbouring countries. This feature broadens the protection for your journeys beyond local limits.

 

Types of Car Insurance Policy in India

Car insurance in India is a legal requirement. Still, various types of car insurance policies are available in the market. The most common type of policies are listed down below:

  • Comprehensive car insurance policy

    A comprehensive policy is India's most comprehensive type of car insurance policy. It offers protection against all possible risks associated with owning a car. This policy covers damage to the car caused by accidents, theft, fire, and natural calamities. It also provides coverage for personal injuries and medical expenses incurred in an accident.

  • Third Party Policy

    A third party policy is the most basic type of car insurance policy available in India. It covers damage to the car caused by accidents involving third parties. It does not offer any coverage for damage to the car caused by accidents involving the policyholder or their family members.

  • Limited Policy

    A limited policy is a hybrid of comprehensive and third-party policies. It offers coverage for damage to the car caused by accidents, theft, fire, and natural calamities. Still, it does not offer coverage for personal injuries and medical expenses. This policy is ideal for people who want to ensure their car against accidental damage but are not interested in coverage for personal injuries and medical expenses.

  • Pay As You Drive Policy

    Pay as you drive policy is a type of car insurance policy becoming increasingly popular in India. This policy charges the policyholder based on the number of kilometers they drive. This policy is ideal for people who do not drive their cars often and want to save on their insurance premiums.
     

Types of Plans

  • Comprehensive Cover
  • Third-Party Liability
  • Limited Policy
  • Pay As You Drive Policy
     

Third-Party (TP) vs. Standalone Own-Damage (OD) vs. Comprehensive Car Insurance

The tabulation below shows how each of these policies differ –

Parameters

Third-Party Car Insurance

Standalone Own Damage Car Insurance

Comprehensive Car Insurance

Meaning

It provides coverage for damages caused to third parties and their properties.

It provides coverage for the damages caused to your own vehicle.

It provides coverage for both own and third-party damages.

Premium

Premiums are comparatively lesser.

Premiums are generally higher, but as the car ages, it decreases

Premiums are usually higher in comparison to the other two policies due to the comprehensive coverage it offers.

Add-ons

The only add-on that can be paired with this type of insurance is the personal accident cover.

There are multiple add-on options to choose from.

There are multiple add-on options to choose from.

Is it mandatory?

Yes

No

No

 

Why Should You Buy a Comprehensive Car Insurance Policy?

Purchasing a car insurance policy comes with numerous benefits, such as –

  • All-Round Protection

A comprehensive car insurance policy safeguards your vehicle from a diverse range of risks. It includes coverage for damages to your own vehicle and protection against third-party liabilities.

  • Offers Add-Ons

A comprehensive car insurance policy allows you to amplify your coverage with add-ons such as zero depreciation cover, consumable cover, roadside assistance covers, etc. These add-ons can be incorporated to tailor the policy according to your specific needs.

For instance, Sylvia lives in a place that is frequently hit by floods. So, she opts for an engine protector add-on under her car insurance policy to ensure maximum coverage for her car’s engine.

  • Compensation for Disability or Death

A comprehensive car insurance policy provides financial protection against accidental disability or death.

  • Third-Party Damage Protection

This policy extends protection against any damage or liability arising from a third-party involving your vehicle.
 

How to Choose the Right Car Insurance Policy?

Here is a step-by-step guide to help you select your ideal car insurance policy –

  • Understanding Your Needs

The first and foremost thing to do is identify your specific needs to choose a policy that perfectly aligns with your requirements. In India, there are different types of car insurance policies –

    • Third-Party Liability Cover:

By law, owning a third-party liability cover is mandatory. This type of car insurance policy protects you against any loss or damage caused to another person or their property due to your vehicle.

    • Standalone Own-Damage Policy:

Alongside third-party insurance, you can opt for a standalone own-damage policy if you want coverage for your own vehicle. This policy extends protection for losses or damages resulting from accidents, fire, natural calamities, and more.

    • Comprehensive Car Insurance Policy:

Offering coverage for losses and damages incurred by you and the third party in an accident, a comprehensive car insurance policy provides a broader scope of protection.

  • Discovering Your Ideal Policy

Once you have identified your requirements, you should then get on the quest for a car insurance policy that perfectly aligns with your needs. Numerous websites offer the convenience of comparing different car insurance policies. Take advantage of these platforms to assess features and select the policy that aligns best with your preferences. The key factors to consider when choosing a policy are –

    • Insured Declared Value (IDV):

Check the IDV of your vehicle. It is the estimated market value of your vehicle, and it is the maximum amount the insurance company will pay in the event of a claim.

    • Types of Add-Ons:

Explore the additional benefits, known as add-ons, available with the car insurance policy. These can be included in your existing car insurance policy for an extra cost, enhancing your coverage as per your specific needs.

    • Cashless Facility:

Assess whether the car insurance policy offers a cashless facility. This feature allows you to obtain repair services from the insurance company's network of garages without the need to pay for damages upfront. The repair costs are covered by the insurance company.

    • Exclusions:

Familiarise yourself with the exclusions of the car insurance policy. Exclusions refer to specific situations for which the insurance company will not provide coverage. Being well aware of these exclusions ensures clarity and helps you make an informed decision.

  • Tailoring Your Plan to Fit Your Needs:

Customising your insurance policy is essential to ensure it meets your specific requirements while staying within your budget. It offers various add-ons to enhance your protection. Some of the common add-ons available are –

    • Zero-Depreciation Add-On:

As a car ages, its market value decreases due to wear and tear. This is known as depreciation. Typically, the depreciated value is subtracted from the claim amount. However, a zero-depreciation add-on under a car insurance policy eliminates this deduction, ensuring you receive the full claim amount without factoring in depreciation.

    • Engine Protector Add-On:

Standard car insurance policies often exclude coverage for engine damages in accidents. The engine protector add-on provides financial protection specifically for damages caused to your car's engine.

    • No Claim Bonus Protector:

A No Claim Bonus (NCB) is a reward under a car insurance policy offered by the insurance company if you refrain from filing claims during a policy year. And with the NCB protector add-on, you can retain this bonus even if you happen to file a claim in the given policy year.

    • Roadside Assistance Cover:

In case of a breakdown or mechanical failure on the road, the roadside assistance cover under a car insurance policy comes to your aid. It ensures on-road assistance, helping you address the damage and continue your journey.

    • Personal Accident Cover:

In case of serious injuries from an accident, a personal accident cover under a car insurance policy provides financial security by providing coverage for your medical expenses.

    • Accessories Cover:

This add-on under a car insurance policy financially protects your car's accessories, such as the stereo set GPS device, etc., in the event of a mishap or accident.

    • Key and Lock Replacement Cover:

This add-on under a car insurance policy covers the cost of replacing lost, stolen, or damaged keys or lock-set.

    • Consumable Cover:

Consumables like nuts, bolts, etc., are parts that wear out and need frequent replacement. A comprehensive car insurance policy does not provide coverage for consumables. This is where consumable cover steps in. It takes care of the replacement costs for these parts.

Note: Add-ons are available exclusively with a comprehensive car insurance policy or a standalone own damage policy.

  • Securing Your Plan

After settling on your chosen policy, take a moment to meticulously review and verify all the details. Tailor the policy to align with your specific needs. Once these steps are completed, you are ready to proceed with the purchase process.
 

 

How to Calculate Car Insurance Premium?

There are a few factors that are being considered while calculating car insurance premiums. Insurance companies consider the make and model of your car, your driving record, and the amount of coverage you choose.

The best way to get an accurate estimate for your car insurance premium is to use a car insurance calculator. This will give you a rough estimate of what you can expect to pay each month. Following are the parameters that are taken into consideration before setting the car insurance price:

  • IDV or Insured Declared Value

    The insurance company calculates the premium amount based on the IDV of the car. The IDV is the current market value of your car at the time of taking the policy minus depreciation.

  • Age of Car

    If you own an old car, its premium would be lower than a new one. The insurance company considers the age of your car while calculating the premium.

  • Engine Capacity

    The engine capacity is also a deciding factor while calculating premiums. Cars with high engine capacity are charged more for insurance than those with low engine capacity.

  • Geographical Area

    The geographical area you reside in is also a parameter that the insurance company looks into while calculating premiums. Cars in congested areas are charged more for insurance than those in less populated areas.

  • Type of Car

    The type of car you own is also a parameter that the insurance company considers while calculating premiums. Some cars are more prone to thefts and accidents than others, and hence, the insurance company charges more for those cars.


Factors Affecting Car Insurance Policy Premium

Understanding the key factors that determine your car insurance policy premium is crucial, and here are some of them -

  • Make & Model

The type of car you own, including its make, model, and engine capacity, significantly influences your insurance premium. Vehicles with larger engine sizes, sports cars, etc., are more prone to accidents, so they generally carry higher premiums. For instance, insuring an Audi S5 will likely cost less than insuring a Maruti Swift due to its differing characteristics.

  • Vehicle’s Age

The age of your vehicle is a pivotal factor in calculating insurance premiums. As a car ages, its market value decreases due to wear and tear. This phenomenon is known as depreciation. Insuring an older vehicle often results in lower premiums, while covering a new vehicle comes with higher premium costs.

  • Location

If your car is registered in an area with heavy traffic and high crime rates, or if you reside in a location deemed accident-prone by the insurance company, you may face higher premiums.

  • Insured Declared Value (IDV)

The Insured Declared Value (IDV) is the estimated market value of your vehicle. It represents the maximum amount you can claim in case of theft or total damage. In comprehensive car insurance, the premium is directly proportional to the vehicle’s IDV. You should also know that only a comprehensive car insurance policy comes with the IDV component, and a higher IDV means higher premiums.

The formula for calculating IDV is –

IDV = Showroom price of the car + Cost of accessories (if any) - Depreciation value as per IRDAI.

  • Claim History

Your insurance company assesses your claim history, and if you have filed claims in the past, your policy will not qualify for a No Claim Bonus. So, you will have to pay higher premiums for your coverage.

  • Coverage Type

Premiums vary based on coverage and add-ons. Increasing coverage beyond the basic car insurance policy will raise your premiums. Consider your coverage needs carefully to strike a balance between protection and cost.

  • Voluntary Deductible

Insurance companies provide you the option to voluntarily choose a deductible. This is the amount you willingly agree to pay before your insurance kicks in. By opting for a voluntary deductible, you take on a share of the claim responsibility. In return, the insurance company rewards you with reduced premiums.

For example, Brinda selects a comprehensive car insurance policy with a voluntary deductible of Rs. 5000, earning her a discount of Rs. 1500 on the premium. She later meets with an accident, and her car sustains damages for Rs. 15,000. In such a case, Brinda pays Rs. 5000 out of pocket, along with the other charges, like consumable or depreciation charges, before the insurance company covers the rest.

Generally, choosing a higher deductible leads to a lower car insurance policy premium.

  • Place Of Purchase

You should also know that the place where you purchase your car also has an impact on your insurance premiums. Premiums can vary for the same coverage, value, and customisations based on the platform or agent. Some intermediaries or brokers might help you secure better deals, while others could charge more to boost their incentives.
 

Tips to Reduce Car Insurance Policy Premiums

To reduce your car insurance policy premium without compromising on essential coverage and benefits, you can consider the following tips –

  • Compare Policy Options

When searching for the right car insurance policy, take the time to compare available options in the market. Assess the premiums offered by different insurance companies before finalising your choice. Utilise online platforms that offer comparisons of premium rates and additional benefits.

  • Choose Deductibles Wisely

A deductible is a certain amount you must pay when filing a claim for vehicle loss or damage before your insurance company covers the rest. There are two types of deductibles – compulsory deductible and voluntary deductible. The compulsory deductible is a fixed amount mandated by IRDAI, and in contrast, the voluntary deductible is optional and can be chosen at your discretion.

You should be aware that opting for a higher deductible results in a lower premium. If you are confident in your safe driving habits, consider selecting a higher voluntary deductible during policy inception. However, keep in mind that in the event of damage, you will be responsible for a greater out-of-pocket expense compared to those who choose not to have a voluntary deductible. Therefore, assess your financial capacity and risk tolerance before deciding on the voluntary deductible amount.

  • Stay Focused on the Road

By driving responsibly and maintaining a clean driving record, you can significantly reduce the likelihood of accidents. Fewer accidents mean fewer claims, and if you manage to go claim-free throughout the policy year, your insurance company rewards you with a No Claim Bonus. This bonus translates to a discount ranging from 20% to 50%.

  • Think Twice Before Filing for Minor Damages

When your vehicle suffers minor scratches or a damaged headlight in a minor incident, covering the repair costs yourself might be more economical. Filing a claim for such minor damages may seem unnecessary. If you make a claim for those expenses during that year, you forfeit the opportunity to receive a No Claim Bonus at the time of policy renewal. To maximise savings, consider avoiding claims for small issues like dents and cracks.

  • Transfer Your No Claim Bonus (NCB) to the New Policy

If you are selling your car or upgrading to a new one, you will need a fresh insurance policy. If you are considering a switch in insurance providers, you should also transfer your accumulated No Claim Bonus to save on your premiums. Secure an NCB retention letter from your current insurance company to carry over the discount to your new policy. This simple step can help you enjoy reduced premiums on your fresh coverage.

  • Join an Automobile Association for Discounts

Many insurance companies offer discounts to drivers affiliated with specific automobile associations in India. By becoming a member of organisations like the Automobile Association of India (AAI) or Western India Automobile Association (WIAA), you unlock opportunities to save on your car insurance premiums.

  • Secure Your Vehicle with Certified Anti-Theft Devices

Protect your car from potential theft by installing certified anti-theft devices such as gear locks, anti-theft alarms, steering locks, etc., from reputable manufacturers. Not only will this enhance your vehicle's security, but it also makes you eligible for premium discounts.

  • Keep Your Policy Current and Avoid Lapses

Timely policy renewal is crucial to maintaining continuous coverage, as letting your policy lapse can result in higher premiums upon renewal. This is because insurance companies view non-payment as a risk. And. you should also keep in mind that your accumulated No Claim Bonus will not be accessible if your policy is not renewed within 90 days from the expiration date.

  • Choose Add-Ons Wisely to Reduce Premiums

While add-on covers enhance your car insurance coverage, not every option may be necessary for you. Instead of mindlessly opting for every available add-on, take the time to assess your requirements. By eliminating unnecessary add-ons and selecting only those essential to your situation, you can effectively lower your premium.

 

How to Calculate IDV in Car Insurance

IDV = Car's Showroom price + Accessories cost - depreciation value

The insurance company calculates the premium amount based on the IDV of the car. The IDV is the current market value of your car at the time of taking the policy minus depreciation.

Thus, the formula to calculate own damage premium amount is:

Insured Declared Value X [Car Premium as per the insurer)] + [Optional Benefits] - [NCB/Discount]

For example: a car with an IDV of Rs 1, 00,000 would have a car insurance premium amount of:

IDV X [(Car Premium as per the insurer)] + [(Optional Benefits)] - [(NCB/Discount])

= Rs 1, 00,000 X (Rs. 5,000) + (Rs. 5,000) - (Rs. 5,000/20)]

= Rs 1, 00,000 X Rs. 25,000 + Rs. 25,000 - Rs. 2,500

= Rs. 27,500

Thus, the own damage premium for this car would be Rs 27,500. It is always advisable to use a car insurance calculator to estimate how much you would be paying for car insurance every month.
 

What Factors Impact Insured Declared Value (IDV)?

The calculation of Insured Declared Value (IDV) is influenced by several key factors, including –

  • Make, Model, and Variant

The make, model, and variant of your car significantly impact its IDV. For example, a high-end car like a BMW will have a greater IDV compared to a more economical option like a Maruti Swift Dzire. The IDV varies not only between manufacturers but also among different types of cars, such as sedans, hatchbacks, and SUVs. Therefore, a Maruti Dzire will have a distinct IDV compared to a BMW, and even within the Maruti lineup, the IDVs differ between models like Dzire LXI and Dzire ZXI.

  • Ex-Showroom Price

The ex-showroom price of your vehicle is a crucial determinant of IDV. The ex-showroom price is the base cost before including the additional expenses like registration, insurance, and road tax. It varies across cities due to logistical and state government costs. Consequently, the IDV differs based on the ex-showroom prices in different locations. For example, Delhi and Maharashtra may have distinct ex-showroom prices.

  • Age of the Car

The age of your car is a pivotal factor in IDV calculation. As discussed earlier, as a vehicle ages, its market value diminishes due to wear and tear. This is known as depreciation. The older the car, the higher the depreciation, leading to a lower IDV. This depreciation factor extends to accessories as well.

  • Purchase Location

The price of a car can also vary based on the location of purchase. For instance, the ex-showroom price of the same model can vary between Chennai and Delhi.

  • Depreciation

Depreciation is the decrease in the value of a car over time - the older the car, the more the depreciation. For instance, two cars of the same model may have different Insured Declared Values (IDVs) because they were made in different years.

  • Accessories

When calculating the IDV, you should also consider the depreciation on accessories. So, the IDV is subject to change based on the age and working condition of the accessories.
 

 

How to Compare Car Insurance Online?

Now a days, it is very easy to compare car insurance online. All you need to do is visit a few websites that offer this service and enter some basic information about your vehicle and yourself. Within minutes, you will have a list of quotes from different providers. It is important to do your research from various websites before you choose your plan.

All automobiles must be insured against accidents in India as per the Motor Vehicles Act, 1988. Since then, many car companies have compensated for loss and damages incurred in accidents, fire, and theft.

Following are the factors that will help you to compare car insurances online:

  • Car Model & Variant

    First and foremost, you need to decide on the car model and variant you want to insure. Different models of cars will have different insurance rates. So, it is important to choose a car within your budget.

  • Year of Manufacture

    The year of manufacture also plays a role in the insurance rates. Older cars will have higher rates than those that are newer.

  • CNG

    If your car runs on CNG, you will have to pay a higher premium for insurance. This is because CNG cars are considered to be riskier to insure.

  • Location

    The location of your car also affects the insurance rates. If you live in a city with high crime rates, your rates will be higher than if you live in a rural area.
     

Car Insurance Covers

  • Accidents
  • Fire & Explosion
  • Theft
  • Natural Disaster
  • Third Party Losses
  • Personal Accident

Coverage under Car Insurance Policy

What is covered?

  • Injuries and property damage
  • Damages to your vehicle in the event of an accident.
  • Medical expenses for both the driver and passengers of your vehicle.
  • Liability for damages to other people or their property.

What is not covered?

  • Damage to your vehicle is considered wear and tear.
  • Damage caused by a natural disaster, such as a tornado or hurricane.
  • Vehicles are used for commercial purposes, such as delivery trucks or taxis.
  • Coverage for personal belongings that may be in your car.
  • Loss of damage to the car due to theft or vandalism.
     

Add-On Covers in Car Insurance Policy

When looking for car insurance, you will likely come across policies that offer add-on covers. These are additional benefits that you can purchase to enhance your policy. Typically, add-on covers provide extra protection in specific areas, such as collision damage or medical expenses. Covers such as no claim bonus, engine and zero depreciation cover, etc., are popular add-on covers. Let's discuss in more detail:

  • Road Side Assistance Rider

With this rider, you avail the benefit of round-the-clock assistance when your insured car suffers a mechanical breakdown. When your insured car breaks down at a place where you are unable to find a mechanic garage, this add-on will arrange for mechanic assistance. You just have to call your insurance company. Your car will get towed to the nearest garage.

  • Return to Invoice

Every car owner is scared of total loss of the car which can happen in case of severe accidents. In such a scenario, the insured car suffers complete damage that is beyond repairs. Total loss can also happen when the car is stolen. In both these cases, the general insurance company is legally responsible to compensate the Insured Declared Value (IDV) of your car.

  • Zero Depreciation Cover

A depreciation cover pays the full value of your car, even if it has decreased in value due to age or wear and tear. This is a valuable cover if you plan to keep your car for a long time.

  • Engine Protection Cover

This coverage pays for repairing or replacing your car's engine if it is damaged in an accident.

  • Key Replacement

There can be instances when you lose your car keys. Not only the clumsy ones but careful people can also misplace their car keys. And in this involves a cost. A car key is not something which your local key-maker or locksmith can make. In this technologically driven time, car keys are computerized and replacing them involves a significant cost. With a key-replacement add-on the insurance company bears this cost.

  • No Claim Bonus Protection Cover

No-claim bonus, or NCB, is a discount that you receive on your car insurance premium for not making any claims during the policy period. This cover ensures that you don't lose your NCB if you need to make a claim. If you make a claim, your NCB will be reduced or may even be lost altogether.
 

Best Car Insurance Companies in India 2022-23

Here is a compilation of some of the top car insurance companies in India for the year 2022-23 -

  • HDFC Ergo
  • ICICI Lombard
  • Royal Sundaram
  • Reliance
  • SBI
  • Future Generali
  • Liberty
  • Iffco Tokio
  • Go Digit
  • Bajaj Allianz
  • Kotak Mahindra
  • Zuno
  • Chola MS
  • Oriental
  • Magma HDI
  • Raheja QBE
  • TATA AIG
  • National
  • Acko
  • United India Insurance
     

Why Choose Car Insurance Policy?

A car insurance policy is mandatory in India for owning and driving a car. It protects you, your passengers and your vehicle in the event of an accident. Here are four reasons to choose a car insurance policy:

  • The peace of mind which ensures you the guarantee that you are protected in case of an accident.
  • The ability to get your car repaired or replaced if damaged in an accident.
  • The ability to recover costs if you are injured in an accident.
  • The ability to protect your loved ones if they are injured in an accident.

When choosing a car insurance policy, it is important to consider the right coverage for you. Make sure to ask your insurance agent about the coverage available and what each one covers.

Points To Consider While Choosing Car Insurance

When considering the purchase of a car insurance policy, it is essential to follow these guidelines –

  • Assess Your Needs

You can start choosing a car insurance policy by understanding your specific requirements. Determine the type of coverage you need and consider any additional features or add-ons that might be beneficial.

  • Third-party or Comprehensive?

Once you decide on your requirements, you can then choose between a third-party policy and a comprehensive policy. Opt for a third-party policy if you drive infrequently, are confident about avoiding car damage, or want lower insurance premiums. Otherwise, a comprehensive policy would be a better choice.

  • Evaluate Coverage

The Insured Declared Value (IDV) represents your vehicle's estimated market value. It determines the maximum amount the insurance company will pay in the event of a claim. Hence, choose a policy with an appropriate IDV to ensure sufficient coverage. You should not opt for a lower IDV just for the sake of reducing premiums, as it may lead to complications during claims. This is especially true if the loss or damage exceeds the chosen IDV, such as in the case of vehicle theft.

  • Tailoring Your Coverage

You can customise your car insurance policy by selecting features and benefits that align perfectly with your needs. By tailoring your coverage, you can enhance your protection by choosing from a range of add-ons such as NCB protector cover, zero depreciation cover, roadside assistance cover, personal accident cover, etc.

  • Network Garages for Claims

When it comes to making a claim under a car insurance policy, you have two options –  cashless or reimbursement. The cashless claim is applicable only for the insurance company's network garages - they are specific garages affiliated with the insurance provider. When purchasing a car insurance policy, ensure the insurance company's list of network garages includes preferred options near your home and workplace.

  • Policy Details

Before finalising your decision, thoroughly review the terms and conditions of the policy you intend to buy. This step is crucial to understand both the inclusions and exclusions in the policy.

  • Essential Personal Accident Cover

According to government regulations, possessing a personal accident cover for the owner-driver is mandatory. This is why you should ensure that you include this cover in your policy if it is not already present. Failing to have a personal accident cover for the owner-driver may result in claim rejections.
 

 

How to Buy Car Insurance Online?

To buy insurance online, the following are the steps you should follow:

  • Surf the internet and gather information about car insurance companies.
  • Compare the rates and benefits of different policies offered by these companies.
  • Choose a policy that best suits your needs and budget.
  • Fill out an online application form and provide your personal and vehicle details.
  • Pay the premium using online mode of payment.
  • Receive your policy document and certificate of insurance online.
     

How to Download Your Car Insurance Policy Copy Online?

The process of downloading your car insurance online may vary based on the insurance company and their specific procedures. However, here are general steps to guide you through the process –

  • Log into Your Account

Head to the official website of your insurance provider and locate the “login” option. Provide your credentials, such as the policy number or registered mobile number.

  • Navigate to Policy Information

After successfully logging in, navigate to the section that contains your car insurance policy details and documents.

  • Locate Your Car Insurance Policy

Scan through the list of documents or policies linked to your account to find your car insurance policy.

  • Access Download Feature

Look for the download or view option for your policy document. This could be labelled as "Download Policy" or "View Policy."

  • Choose File Format

Select the desired file format for downloading the document (common options include PDF).

  • Download

You can now confirm and proceed to download the file.

  • Save to Your Device

Save the downloaded document to a location on your computer or device for easy accessibility in the future.
 

Why Should You Renew an Expired Car Insurance Policy Now?

Here are some key reasons why it is important to renew your expired car insurance policy –

  • Legal Compliance

The Motor Vehicles Act of 1988 mandates every vehicle to have a valid motor insurance policy. This means that driving with a lapsed policy can lead to legal penalties, highlighting the necessity of timely renewal.

  • Continuous Financial Protection

Timely renewal of your insurance policy guarantees financial protection in the event of accidents, theft, or damages to your car.

  • Cost-Efficiency and Convenience

Opting for renewal over purchasing a new policy is not only cost-effective but also a more convenient option.

  • Preserve Your No Claim Bonus

Renewing your policy on time is crucial to safeguard your No Claim Bonus (NCB). If you maintain a claim-free record in your previous policy year, you can enjoy a discount on your own damage premium during renewal. It is important to note that the grace period for policy renewal after expiration is 90 days. Failing to renew within this timeframe results in the loss of your NCB.

  • Prevent Policy Lapses

Missing a renewal causes your policy to lapse, and the period between the expiry date and renewal is referred to as the break-in period. Operating your vehicle during this period may lead to both legal consequences and financial implications.

  • Avoid Inspection Hassles

Delaying policy renewal often triggers the need for a vehicle inspection, even if it is just a day overdue. During this inspection, the insurance company may exclude any existing damages or deny insurance altogether, requiring you to repair the vehicle before applying for renewal.
 

How to Renew Car Insurance Online?

Renewing your car insurance policy online is a very simple process. Make sure to ask your insurance agent about the coverage available what each add-on will cover. All you need to do is follow these simple steps:

  • Go to the car insurance renewal section.
  • Enter your policy number and click on the submit button.
  • Enter your date of birth and click on the submit button.
  • Review the details of your policy and make any changes if necessary.
  • Enter your contact information and credit card details.
  • Click on the renew button and wait for your policy to be renewed.
  • You will receive an email notification once your policy has been renewed.

You'll get a new car insurance policy document sent to the email address you specified when you renewed your policy. You can always obtain a copy of the policy document by downloading it and printing it out. Renewing your car insurance policy online is a quick and easy process that comes with many benefits. Make sure to take advantage of it and renew your policy today!
 

Benefits of Renewing Car Insurance Policy Online

Every car insurance policy has a validity period. After its expiry, you need to renew it for keeping your car insured. You can renew your car insurance policy either offline or online. Even though many of us still follow the traditional method of offline renewal of the policy but opting for online car policy renewal is better.

  • Simple Customization of Policy

You can easily customize the policy to suit your specific needs while renewing it online. All you need to do is mention the exact requirements. The insurance company will provide a policy that fulfills all your needs.

  • Secure Renewal/Purchase Process

The entire renewal or purchase process is very secure, and all your personal information is safe. You don't need to worry about data theft or hacking while renewing your car insurance policy online.

  • Flexible Payment Options

You can choose to pay for your car insurance policy in installments, making it easier for you to manage the expenses. You can also pay through other modes such as net banking, credit/debit cards, etc.

  • Instant Policy Issuance and Delivery

Once the payment is made, the policy is immediately issued and delivered to your email address. You don't have to wait for long periods to get your policy document.

  • Online Tracking of Renewal Status

You can keep track of your car insurance policy renewal status online. This way, you will always know when your policy is set to expire and when it needs to be renewed.

  • Easy No Claim Bonus Transfer Process

If you have any no claim bonus accumulated on your previous policy, the process of transferring it to the new policy is very easy. You can do it all online without any hassle.
 

How to File a Car Insurance Claim Online?

The first step is to contact your car insurance company as soon as possible after the accident. You will need to provide details such as the policy number, name of the driver, date and location of the accident, and a description of the damages. When you are in an accident, the most important thing is to make sure that everyone is safe. After that, you need to call the police and file an FIR (First Investigation Report). . Here is what you need to do in order to file a car insurance claim:

Here is what you need to do in order to file a car insurance claim:

Step 1 : Gather your documents

In order to file a car insurance claim, you will need to provide your policy number, the name of the driver, the date and location of the accident, and a description of the damages. You should also have your driver's license, registration, and proof of insurance available.

Step 2 : Describe what happened

In your claim, you will need to provide a description of what happened in the accident. This should include the date, time, and location of the accident, as well as a description of the damages to your car.

Step 3 : Contact your insurance company

Contact your car insurance company as soon as possible after the accident. You will need to provide details such as the policy number, name of the driver, date and location of the accident, and a description of the damages.

Step 4 : Follow your insurance company's instructions

Once you have filed your claim, your insurance company will provide you with instructions on what to do next. Generally, you will need to take your car to an authorized repair shop and provide a copy of the repair bill to your insurance company.

Step 5 : Wait for your claim to be processed

It can take some time for your insurance company to process your claim. Be patient and stay in communication with them as they work to resolve the situation.
 

Documents Required for Filing a Car Insurance Claim

When you are in an accident, the first thing you need to do is contact your car insurance company. In order to process your claim, they will need certain information and documents from you. Here is a list of the documents that are typically required:

  • Proof of ownership: This can be a copy of your registration certificate (RC).
  • Copy of police FIR
  • Proof of insurance: This can be a copy of your car insurance policy or your insurance card.
  • Fitness certificate for commercial vehicles
  • Proof of accident: This can be a police report, photos of the accident scene, or witness statements.
  • Car Registration Certificate (RC)
  • Repair estimate: This is a document from a qualified repair shop that estimates the cost of repairs.
  • Vehicle inspection report: This is a document from a qualified mechanic that states the condition of your car after the accident.
  • Vehicle registration: This is a copy of your car's registration card.
  • Driver's license: This is a copy of your driver's license or state ID card.
     

Tips to Avoid Car Insurance Claim Rejections

There are many reasons why your car insurance claim may get rejected. Here are a few tips to help avoid such rejections –

  • Avoid Fraudulent Claims

If you intentionally damage your car and file a fraudulent claim, your insurance company has the authority to reject it. Insurance is designed to provide genuine assistance in times of need, not as a tool for illicit gains. The insurance company will not entertain intentional manipulation for financial benefit.

  • Say No to Drunk Driving

Driving under the influence of alcohol is not only a legal offence but can also result in claim rejections. After an accident, If the insurance company finds out that you were driving under the influence of alcohol during the inspection, your claim will be denied.

  • Keep Your Licence Valid

Driving without a valid licence is a violation of the law as it is a basic requirement for operating a vehicle on public roads. If you are caught driving without a valid licence, your insurance company is not obligated to cover damages, leading to claim rejection.

  • Notify Modifications Promptly

When you purchase an insurance policy, it is essential to disclose all details about your car, such as engine capacity, car conditions, etc.. If modifications are made during the policy period without informing the insurance company, and an accident occurs, there is a risk that either the altered parts will not be covered or the entire claim might be rejected.

  • Ensure Timely Claim Intimation

Insurers typically set a specific timeframe for filing claims, and failure to adhere to this duration or neglecting to report losses or damages promptly can result in claim rejection. It is vital to register a claim within 24-48 hours or as soon as possible after an incident. Any delay should be accompanied by a valid reason to avoid rejection.

  • Notify Before Starting Repairs

Before undertaking any post-accident repairs, it is crucial to have your car inspected by the surveyor appointed by the insurance company. Failing to inform the insurance company about repairs conducted independently may lead to claim rejection.

  • Don’t Misuse Old Damages

Insurers do not cover pre-existing damages resulting from previous accidents. Claims for such damages are likely to be rejected. It is imperative to promptly inform the insurance company about any damages to your car and understand that coverage is limited to recent incidents.

  • Consequential Loss Awareness

If your car incurs additional damage while being used after an accident, it is known as consequential loss. For instance, if your car's tires are damaged while being towed post-accident, such losses will not be covered by the insurance company.

  • Timely Policy Renewal

It is essential to ensure that you do not let your car insurance policy lapse. Every policy has an expiry date, and renewing it on time is crucial to stay covered. If you miss the renewal and encounter an accident, the insurance company is not obligated to cover your claim.

  • Ownership Confirmation

Ensure proper ownership details, especially when buying a used car. It is vital to transfer the Registration Certificate (RC) to your name before purchasing the car insurance policy in your name. The claim will be processed only if the name on both the car insurance policy and the RC is the same.

  • Ensure Full Disclosure

Failure to disclose information may result in the rejection of the claim. If you omit any details about your car during the policy purchase or claim application process, your claim may not be considered. Examples of non-disclosure include failing to inform the insurance company about hypothecation, modifications made to the vehicle contributing to the accident, etc.

  • Negligence and Claim Denial

Damages resulting from negligence, such as driving in a flooded area, leaving car keys unattended, etc., may result in claim rejection under a car insurance policy.

  • Accurate NCB Declaration

You must declare the correct No Claim Bonus (NCB) when purchasing the policy. Insurers verify NCB with the previous insurance company post-purchase. And, any discrepancies found during a claim due to inaccurate NCB declaration may lead to rejection. Therefore, it is crucial to declare such information accurately to ensure a smooth claims process under a car insurance policy.
 

 

Why Should You Buy A Car Insurance Policy From SMC?

When it comes to purchasing car insurance, having the right partner makes all the difference. SMC stands out as an excellent platform for securing a car insurance policy tailored to your needs, and here's why –

  • 100% Advocacy for You

At SMC, our allegiance is to you. When we suggest plans, your needs and interests are our sole focus.

  • 0% Unwanted Communication

We respect your privacy, and you will only hear from us when you specifically request contact. No unnecessary calls or spam.

  • Comprehensive 360° Claims Support

We understand that insurance truly matters when claims are at play. We, at SMC, are dedicated to providing you with complete support and expert assistance throughout the claims process. Because, for us, insurance is more than just a piece of paper – it is your assurance of unwavering support.
 

Partner Car Insurance Companies

Listed below are some of the partner car insurance companies that you should be aware of –

Name of the insurance company

Founded in

List of cashless garages

Go Digit

2016

6000+

HDFC Ergo

2002

9000+

ICICI Lombard

2001

12000+

Iffco Tokio

2000

4300+

Kotak General Insurance

2015

4000+

Bajaj Allianz

2001

6500+

Future Generali

2006

6500+

Liberty General Insurance

2013

5500+

The New India Assurance

1919

3000+

Reliance General Insurance

2000

8500+

Royal Sundaram

2000

3300+

Shriram General Insurance

2012

5200+

Tata AIG

2001

5400+

Universal Sompo

2007

3500+

SBI General Insurance

2009

7200+

Zuno

1995

3640+

United India Insurance

1938

3100+

National Insurance

1906

3100+

Raheja QBE

1990

1300+


FAQs

  1. Which type of car insurance is the best?

The best car insurance depends on your specific needs and circumstances. Comprehensive coverage is widely regarded as the most inclusive, protecting your car and others. On the other hand, third-party-only insurance satisfies the minimum legal requirements by covering damages to others. Consider your priorities and budget to determine the most suitable coverage for you.

  1. Why is the initial car insurance so expensive?

The insured declared value (IDV) of the vehicle is one of the primary factors influencing the premium. For new cars, the IDV is naturally higher, directly impacting the premium. The relationship is straightforward: higher IDV results in a higher premium. Additionally, the depreciation on new vehicles is lower compared to older cars, contributing to the overall premium cost.

  1. How do you lower your car insurance premium?

To reduce your car insurance premiums, consider these effective strategies –

  • Opt for a third-party (TP) policy for older cars.
  • Avoid unnecessary modifications.
  • Install a certified anti-theft device,
  • Add a voluntary deductible only if you are sure that you will not make frequent claims.
  • Purchase add-ons only if needed.
  • Refrain from claiming for minor damages.
  • Ensure timely policy renewals and avoid lapses.
  1. How quickly can you buy or renew car insurance online?

Buying or renewing insurance online is a simple process. Simply input your vehicle details, choose the quote that fits your needs, and proceed with the payment. You will receive the policy instantly at the email address registered with the insurance company.

  1. Where can I check my car insurance policy details?

Visit your insurance company's website, enter your details, and review your policy information online at any time.

  1. What is an endorsement in car insurance?

In car insurance, an endorsement signifies a modification to an insurance policy initiated by the insurance company at your request. If there are any errors in your policy, you can rectify them by submitting a request to the insurance company.

  1. Are theft and fire covered by third-party insurance?

No, third-party insurance specifically addresses damages caused to others due to your vehicle.

  1. Is the engine covered in zero depreciation insurance?

The zero depreciation add-on is designed to waive depreciation during a claim, and it does not extend to covering engine damages. To protect your engine, consider purchasing a separate engine protector add-on.

  1. Can we make unlimited claims under zero depreciation cover?

The limit for claims under zero depreciation cover varies among insurance companies. Typically, you can avail up to 2 claims with zero depreciation. However, certain insurance companies may provide flexibility for more than 2 claims, so it is essential to check with your specific insurance provider for precise details.

  1. How frequently can we file claims under car insurance in a year?

Generally, there is no restriction on the number of times you can file a car insurance claim in a year. While these restrictions are uncommon, it's crucial to note that frequent claims may have potential drawbacks. 

 

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