As per the Motor Vehicles Act of India 1988, every car owner should have car insurance. Car owners must have third party insurance at least. And when it comes to purchasing one, an individual will look out for the best car insurance plan in India.
Best car insurance policy will not only financially protect vehicles from the loss or damage caused due to accidents but also from natural or manmade disasters. The policyholder also gets add on riders that promise to make the coverage more efficient.
Types of Car Insurance
- Comprehensive car insurance
Comprehensive car insurance is said to be one of the best car insurance in terms of the coverage it provides. It not only protects the policyholder against the expenses incurred due to loss or damages to a third party’s property but also offers benefits against damages to their own vehicle in case of an accident. It also provides coverage against fire, vandalism, theft, extreme weather conditions, and natural disasters. Damage caused by falling objects like tree branches is also covered.
- Third-party liability car insurance
Every car owner must have third-party car insurance, which shields the policyholder against legal liabilities to a third party in case of an accident. If the third party suffers injuries or damages because of the policyholder’s fault in an accident or if their property is damaged, it is the third-party car insurance policy that comes to the rescue.
Why is car insurance important?
It is important to have car insurance due to the following reasons:
- Compulsory under law
Under the Motor Vehicles Act of India, all vehicles should have third-party liability car insurance. However, one can go for a comprehensive car insurance policy too.
- Worthwhile investment
Some of the top car insurance covers the cost of repairs due to accidents as well as the policyholder for any bodily injuries inflicted thereon in exchange for a small premium amount.
- Saves time
Meeting with an accident can leave anyone stressed. From running to garages to repair the vehicle, paying for the cost incurred on repairing the vehicle of a third party, or paying for the treatment of any injuries to the policyholder or a third party can exhaust him or her. Still, with the best car policy, everything is handled by the insurance provider.
Things to consider before buying car insurance
- Affordable Premium with the best cover
The policyholder should look for an insurance plan that gives the best coverage on low premiums. The insurance provider that qualifies the criteria is best for the long run.
The policyholder should opt for an insurance plan that provides the best discount against deductibles.
- No-Claim bonus
No-Claim bonus is an amount which is accumulated over regular claim-free years. It helps in saving some amount of money on the premium payable at the time of the renewal of the policy.
- Cashless Garages
Having an insurance plan ensures cashless service for the policyholder’s car. The policyholder should choose an insurance provider that has a good network of cashless garages in the nearby area where the car can be repaired.
Best car insurance plans in India
|Name of the plan||Claim Ratio (2018-19)|
|Bajaj Allianz Car Insurance||62%|
|Bharti AXA car insurance||75%|
|Edelweiss car insurance||145%|
|Future Generali Car Insurance||69%|
|ICICI Lombard Car Insurance||74%|
|IFFCO Tokio car insurance||87%|
|National car insurance||127.50%|
|New India Car Insurance||87.54%|
|Oriental car Insurance||112.62%|
|SBI car Insurance||87%|
|United India Car insurance||120.79%|
*InvestmentCage does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
*The claim ratio has been taken from IRDAI report 2018-19
Car Insurance plans explained
- Bajaj Allianz Car Insurance
Bajaj Allianz Motor Insurance financially secures the policyholder against physical damage to the car, bodily injury, or death of the policyholder along with third-party liability cover. It has a network of more than 4000 cashless garages and instant claim assistance. A person can purchase and renew the policy online. It also provides 24×7 roadside assistance.
- Bharti AXA car insurance
Apart from cover for costs incurred due to loss/damage to the car due to theft or accident of vehicle, malicious act, housebreaking, burglary, flood, fire, earthquake, explosion, etc. plans of this insurance provider gives compulsory personal accident cover for the owner/driver at a specific premium for which they will get a sum assured of Rs 15 lakhs. It also offers a standalone damage policy.
- Edelweiss car insurance
This insurance provider offers two types of car insurance plans – Edelweiss Private Car Liability Only Insurance and Edelweiss Private Car Package Insurance (which is third party + own damage). It has a network of 1500+ cashless garages and promises to give priority service at their preferred workshops.
- Future Generali Car Insurance
This insurance provider has a network of 2500+ cashless garages. Apart from third party liability expenses, Future Generali Car insurance plan also provides cover against legal expenses that policyholders might incur to defend the claim. The following liabilities can also be covered under the car insurance plan on paying some extra premium.
- Paid driver/conductor/cleaner employed in the operation of the car
- Employees travelling in/driving the car other than paid drivers.
- Non-fare paying passengers.
- HDFC Ergo Car insurance
This insurance provider offers three types of car insurance plans – Third Party Liability, Standalone Car Insurance Plan, and Comprehensive Car Insurance Plan – at competitive rates. It boasts of a network of 8400+ cashless garages and quick claim settlement. The premium amount of HDFC Ergo car insurance plans start from Rs 2072. *Standard T&C Apply.
- ICICI Lombard Car Insurance
ICICI Lombard provides three types of car insurance plans – Private car package policy, Stand-alone own-damage car insurance, and Third-party car insurance. It offers affordable premiums, easy renewals and quick claim settlement.
- IFFCO Tokio Car Insurance
IFFCO Tokio car insurance offers extensive coverage for car protection. It has a network of 4300+ cashless garages and provides coverage for CNG/PNG fuel kit. It also promises 24×7 roadside assistance. It provides two types of car insurance plans – Comprehensive and Third Party liability.
- National Car Insurance
National Insurance has a network of 3200+ cashless garages. With this plan, the policyholder can get third party liability cover of a maximum of Rs 7.5 lakhs. It covers vehicles used for social, domestic, and professional purposes.
- New India Car Insurance
New India Car Insurance has a network of 1100 cashless garages and provides special add-on covers with Nil depreciation, no claim bonus protection, etc. It also covers towing charges of up to Rs 1500. New India Assurance offers two types of plans – Own damage and third-party liability.
- Oriental car insurance
Oriental car insurance provides customised plans as per the policyholder’s requirements. It offers coverage for long as well as short duration, add-on riders at affordable premiums, free emergency services through TVS along with quick claim settlement.
- SBI car insurance
It has a cashless network of over 1500+ garages and provides third party cover for upto Rs 7.5 lakh and personal accident cover for upto Rs 15 lakh.
- United India Car insurance
United India Insurance car policy is available in two variants – Package Plan and Liability only plan. It provides comprehensive motor insurance plans for private cars and commercial vehicles. It promises a simple and hassle-free claim settlement process.
Add on covers
Some of the best car insurance policies in India provide add-on riders or covers after paying a nominal amount of extra premium.
- Zero Depreciation
It is a well-known fact that a car’s value depreciates over a period of time. That’s why the insurance provider cuts the depreciated value of the car from the claim amount at the time of settlement. If the policyholder chooses zero depreciation cover, he or she will get the claim amount without any deduction.
- No Claim Bonus Cover
With this cover, the policyholder will get a No Claim Bonus discount in the premium amount by the insurance provider for not making a claim during the policy term of the four-wheeler insurance plan.
- Engine Protection Cover
None of the car insurance plans provides engine cover in comprehensive or a standalone own-damage car policy. But, if the policyholder chooses add-on Engine Cover, he or she can get their car’s engine protected too.
- Loss of Belongings
Loss of belongings cover helps in reimbursing the loss that the policyholder might suffer due to theft of personal stuff like a laptop or any other expensive item in the locked car if the car gets stolen.
- Daily Cash Allowance
Daily cash allowance cover helps in covering the transportation costs incurred when the policyholder’s car is in the garage for repair for three to four days.
- Key Replacement
Key replacement cover helps in reimbursing the cost of replacing the key, in case the policyholder misplaces his or her original keys.
Inclusions and Exclusions in Car Insurance:
- Financial cover for damages to the policyholder’s vehicle
- Cover for damages caused to the vehicle due to natural calamities
- Personal accident cover
- Cover for damages due to man-made disasters
- Covers damage to property due to accident
- Damage to the vehicle if it was used for illegal activities.
- Fraudulent Accidents
- Damages incurred due to accidents under the influence of alcohol or drugs.
- Damages incurred if someone drives the car without a valid driving license or someone who is below the legal age of driving.
- Damages incurred if the driver breaks traffic rules.
- Damages incurred when the policy has expired.
*Standard terms and conditions apply
Documents Required for Claim settlement:
Given below is the list of documents that the policyholder has to submit while making a claim request:
- Name of the policyholder
- Policy number
- Contact number
- Date and time of the accident
- Number of the vehicle
- Make and model of the car
- Location and extent of loss
- Name of the garage and its contact information
- Details of the accident
In case of accidental damages:
- Proof of insurance
- Registration book copy and original tax receipt
- Driving license copy along with the original of the individual who was driving the car at the time of the accident
- The estimated cost of repair
- Payment receipts and repair bills after the repairing are complete.
In case of theft of the car:
- Original policy document or certificate
- Registration book along with theft endorsement from the concerned Regional Transport Office plus tax payment receipt
- Details of the insurance policy, such as policy number, the period of insurance, and the insurance company
- Service booklets, keys, and warranty cards
- FIR or police panchanama along with JMFC report or final investigation report
- Acknowledged copy of a letter addressed to the Regional Transport Office intimating theft.
FAQs [People Also Ask]
- Is it compulsory to have car insurance?
Yes. As per the Motor Vehicles Act of India, vehicles plying on the road must have at least third-party liability insurance.
- What documents are needed in the vehicles for ready inspection?
Following documents should always be kept in the car:
- Copy of the Driving Licence of the driver
- Insurance Certificate
- Copy of the vehicle’s Registration Certificate.
- ‘Pollution Under Control’ Certificate
- How can policyholders transfer their car insurance from one insurance provider to another?
At first, the policyholder will have to inform his or her existing car insurance provider and then submit the list of the documents given below:
- Transfer of Policy (Sale of Vehicle)
- New RC duplicate copy /form 29-30
- Old policy document
- NOC from the last insurance provider
- Transfer Charge of Rs 50
- Duly filled new application form, collected from the insurance provider.
- How can the third party premium be calculated?
IRDAI decides the amount of third party premium for every financial year. It depends upon the engine capacity of the vehicle.
- Does the policyholder have to inform the insurance provider if they change their fuel kit?
Yes, the insured person will have to inform the insurance provider about changing the fuel kit from CNG to LPG as it affects the premium amount of the car insurance policy.