Car Insurance, alternatively known as motor insurance or auto insurance is a specific policy that you buy for the protection of your vehicle against any sort of damages due to inescapable or unfortunate accident. Since India is a country mainly known for its vast population, car accidents have become a daily drama here. No matter how safely you drive your car or how responsibly you manage your vehicle, accidents can happen just as fast as we blink isn’t it? Imagine this: you parked your car outside a shopping mall and when you come back from shopping after a couple hours, with a bolt from the blue you discover a big dent on the back of your car. How do you deal with such situation? Well, fortunately, that’s when your online car insurance policy comes into its role play.
Types of Car Insurance Policies In India
In India, car owners can buy two types of car insurance policies. They are:
Comprehensive Car Insurance
A comprehensive car insurance policy provides complete protection to the insured car. It protects the car from all kinds of unforeseen risks resulting out of the fire, accidents, theft, vandalism, natural disasters and manmade disasters. It also covers any third party accidental liabilities that the policyholder is legally bound to pay. Moreover, this type of insurance also provides personal accident cover to the owner-driver of the insured car.
Third Party Liability Car Insurance
A third party liability car insurance policy provides protection against any third party liabilities of the policyholder arising out of causing accidental bodily injuries, death or property damages to a third party. This type of insurance does not cover any loss or damages suffered by the insured car or its driver.
Best Car Insurance Companies
Car insurance helps you mitigate financial obligations that may arise due to an unfortunate event involving your car such as a road accident, fire, theft, natural calamities, etc. As per the Indian Motor Tariff, every car/vehicle owner is legally required to have at least a third party car insurance cover for being able to drive their car legally on Indian roads.
Currently, there are 25 General Insurance Companies in India that offer car insurance plans.
Top Car Insurance Companies in India with OD Claim Settlement Ratio & Network Garages
Find below the best car insurance companies in India with claim settlement ratio (CSR) & network garages.
Car Insurance Company
OD Claim Settlement Ratio
|Bajaj Allianz Car Insurance||91.23%||4,000+|
|Royal Sundaram Car Insurance||94.07%||4,600+|
|Bharti AXA Car Insurance||88.49%||5,200+|
|Chola MS Car Insurance||85.86%||7,100+|
|Edelweiss Car Insurance||70.59%||1,000+|
|Future Generali Car Insurance||88.56%||2,500+|
|Digit Car Insurance||85.76%||1,400+|
|HDFC ERGO Car Insurance||89.48%||6,800+|
|ICICI Lombard Car Insurance||87.84%||5,600+|
|IFFCO Tokio Car Insurance||96.44%||4,300+|
|Kotak Car Insurance||81.70%||1,300+|
|Liberty Car Insurance||87.48%||4,300+|
|Magma HDI Car Insurance||75.66%||4,000+|
|National Car Insurance||80.50%||3,100+|
|Navi Car Insurance||53.10%||900+|
|Reliance Car Insurance||83.81%||3,800+|
|Oriental Car Insurance||93.16%||3100+|
|SBI Car Insurance||91.74%||16,000+|
|Shriram Car Insurance||62.84%||2,000+|
|Tata AIG Car Insurance||91.80%||5,000+|
|New India Car Insurance||92.23%||3,000+|
|Acko Car Insurance||72.68%||2,000+|
|United India Car Insurance||84.17%||3,100+|
|Universal Sompo Car Insurance||92.45%||3,500+|
(*Claim Settlement Ratio For FY 2018-2019 As Per IBAI’s General Insurance Claim Insights Handbook For Policyholders – 4th Edition)
Points to Consider While Selecting Car Insurance Policy
What is covered
Checkout the inclusions and exclusions of both third party insurance and comprehensive vehicle insurance policy. Only buy third party insurance if you can bear your own damage expenses.
Compare Car Insurance Online
Compare car insurance online and select the one that meets most of your financial expectations. You can easily get multiple four wheeler insurance quotes online from the best car insurance companies in India.
Incurred Claim Ratio
Higher ICR, indicate satisfied customers and more the chances of your claim being settled.
It is always recommended to buy a comprehensive car policy with additional benefits like roadside assistance, zero depreciation, flat tyre assistance, etc.
What’s Covered in Car Insurance Policy?
The four wheeler insurance policy covers the following:
- Loss or damage to the insured vehicle.
- Loss or damage to your vehicle caused by accident, theft, fire, explosion, self-ignition, lightning, riots, strikes or act of terrorism, natural calamities.
- Financial liability caused by the injury/death of a third party or damage to the property.
- Personal accidental insurance cover.
Add-On Covers in Car Insurance Policy
Add-on covers are the additional covers or protection that you include in your 4 wheeler insurance plan to keep your car safe from any damages or total loss. The add-on covers need to be purchased on payment of an extra premium amount. Following are some of the add-on covers – No Claim Bonus Protection cover, Zero Depreciation cover, Engine Protection cover, Key protection cover, etc.
No Claim Bonus Protection Cover
For every claim-free year, the insured is rewarded with a discount on the renewal premium. This discount is called – No Claim Bonus (NCB). It is cumulative and increases every year. It usually ranges from 10% to 50% and can save a substantial amount of money on the premium payable for your auto insurance.
Let’s take an example if a policyholder doesn’t make a claim during the tenure of his auto insurance policy, he becomes eligible for No Claim Bonus, on the basis of which, a certain rebate is offered on the payable premium. With No-claim-bonus protection cover you can retain your NCB even after registering a claim during the policy term. The terms and conditions vary from one insurer to another.
Engine Protection Cover
An engine is one of the most important parts of a car. And engine protection cover compensates the cost of fixing the indirect damages that are caused to the engine due to lubricating oil leakage and water ingression. It covers the Gear Box Parts, Engine Parts, and DifferentialParts.
Zero Depreciation Cover
This additional feature offers compensation even for the depreciating value of your car. With this feature, you will not have to pay for the depreciation value of your vehicle’s parts. It is mostly valid on private cars and is subjected to a specific number of claims during the policy period. Compulsory and voluntary deductibles (as per the case) will be applicable despite zero depreciation cover. You can check with the insurance company for any terms and conditions before making the purchase.
Sometimes, a bunch of unforeseen expenses can drain all your savings. Consumables Cover. Includes all the expenses incurred on consumable items for any perils that are covered under the policy. Consumable items include screws, nuts and bolts, washers, AC gas, grease, lubricants, bearings, clips, engine oil, distilled water, oil filter, brake oil, and fuel filter are mostly covered.
There are certain terms and conditions that are applicable to this add-on cover that varies from one insurance provider to another. It is mostly valid on private cars and is subjected to a particular number of claims during the policy period. You can check with the insurance company before making the purchase.
Key Protection Cover
Once in a lifetime everyone would have lost or misplaced their car keys. In such cases, the insurer can offer you the financial help by covering the costs incurred on replacement and repair of your car keys. Here’s was Key Protect Coverwill offers.
- You will be permitted for a fixed number of claims during your policy period
- Any case related to theft or burglary should be supported by a Police FIR
- The replaced keys will be of the same type as the ones that were lost or stolen
- Any broken or damaged keys will be replaced by the insurer
- In case of misplacement or theft of car keys, the insurer will replace the entire set of keys including h lockset, after submission of all the other keys to the insurer
Daily Allowance Benefit
In case of accidental damage, you might have to leave your car in the workshop and travel on your own. This add-on cover comes to your rescue when your vehicle is parked in the garage after an accident for repair. If you have this add-on cover the insurer will provide you daily travel allowance if the vehicle requires has to be in the garage for more than 3 days (varies from insurer to another).
Personal Accident Rider Benefit
Personal Accident Rider is an optional add-on benefit that can be added to the comprehensive auto insurance by paying an extra premium. This rider provides the policyholder with the coverage of medical expenses due to damage, personal injury or disability caused due to an accident.
Cover for Car Accessories
By simply opting for separate add-on policy, you can avail the coverage for your car accessories, which a normal 4 wheeler insurance policy may not cover. Such additions may increase the premium, but it is always beneficial and cost-effective rather fitting a new car accessory.
Save Through Paying High Deductibles
Deductibles are a certain percentage of the claim amount that the insured has to pay from this own pockets. A policyholder can save by paying higher deductibles. At the time of filing a claim, if you choose to pay higher deductibles against your claim, your auto insurance provider manages to give you some discount on premium later on.
Personal Accident Cover:
A comprehensive car policy not only provides third-party cover but as well as offers cover against personal accident. In personal accident cover, you get a pre-defined amount against death because of the accident and permanent total disability. In addition to this, one can purchase this cover for co-passengers as well even on an unnamed basis, which will be maximum as per the seating capacity of the vehicle. However, the amount of coverage is pre-determined even in this case.
Loss or Damage of the Insured Vehicle:
A comprehensive car policy provides coverage against damage or loss to your car. Reasons for damage like fire, accident, or self-ignition are covered in this plan. In addition to this, if the car faces losses because of theft, burglary, terrorism, riots, then also an insurance policy covers it. Moreover, it also covers loss or damage occurred due to transit via train, air, road, inland waterways, or lift.
Vast Network of Garages:
Most of the motor insurance providers have a wide range of network garages that are spread across the country. This feature ensures that you can get the service of your car anywhere in India.
Liabilities of Third-Party:
If your car meets with an accident and causes loss or damage to the property of a third-party, then do not worry as it is covered under four wheeler insurance policy. Moreover, if you come across any legal liabilities because of an accident by your car like death or injury to any person or property, then do not worry, your car policy provides you coverage for the same.
What’s Not Covered in Car Insurance Policy?
Following features are usually not covered in a 4 wheeler insurance policy:
- Loss or damage if a policy is not in force.
- Gradual wear and tear of car and its parts.
- Loss or damage to the vehicle when driven by a person without a valid driving license.
- Loss or damage to the vehicle as a result of intoxication due to drugs, alcohol etc.
- Loss or damage to the engine as a result of oil leakage.
- Loss or damage to the vehicle as a result of abuse of car manufacturer’s guidelines.
How to Calculate Car Insurance Premium?
Car insurance price is decided based on several factors. It is also easy to find out the four wheeler insurance premium using an online car insurance calculator. However, the insurance provider takes into consideration the following parameters before fixing the car insurance price:
- IDV (Insured Declared Value) of the vehicle
- Age and Type of Car
- Engine’s Cubic Capacity
- Geographical zone
Car’s IDV Calculation Formula:
IDV = Car’s Showroom price + Accessories cost – depreciation value
Thus, the formula to calculate OD premium amount is:
Own Damage premium calculation formula:
Insured Declared Value X [Car Premium as per the insurer)] + [ Optional Benefits] – [NCB/Discount etc.]
Last but not the least, before you sign the policy documents, you must take your time to read the terms and conditions carefully and check if the terms are favourable and meet your needs. This is a critical step to avoid any legal hassles at the time filing a claim.
Buying a car insurance policy is not as hard as it may seem. Following the tips mentioned above can immensely help you ..