Comprehensive Guide to Car Insurance: Claims, Terms, and Conditions

Many times, people are worried about thinking that they have insured the vehicle, but do not know if their insurance will provide protection in every situation? Please read this story for knowing the car insurance coverage.

Subas Tiwari

Know all about car insurance and its claim along with terms and conditions

In a natural disaster, violence, riots, etc., everyone is worried that the vehicle will not have to be repaid with its own money. Such concern can be overcome with On Damage (OD) and Add-on Cover Insurance. These insurance acts as the safety shield of the vehicle so that the owner of the vehicle remains carefree.

Important of these insurance

1st example: Ranjeet used to park his car with the help of a school wall built in front of the house. One night an earthquake struck the school wall on his car. The car suffered significant damage. It cost 15 thousand rupees to get the car right, which was raised by the insurance company. If Ranjeet did not have OD and add-on cover insurance, then the entire 15 thousand rupees would have gone from Ranjeet ‘s pocket.

2nd example: Reeta goes to office with her car. One day the parking lot filled with rain. His car was submerged in water. They started the car when the water came out but did not start. It was discovered that the engine was flooded. It cost about 20 thousand rupees to get the car right. Reeta had OD and add-on cover insurance. She did not have to spend even one rupee from her pocket.

Keep these things in mind

NCB: If you have taken any insurance for the car and have not made a claim, then you can avail the No Claim Bonus (NCB). Through the NCB, you can reduce the premium of vehicle insurance by 50%.

It is not necessary to take insurance from the dealer: If you are buying a new car, then the dealer says to give insurance. It is not necessary to take insurance from the dealer you are taking the vehicle from. First compare the insurance of other companies present in the market, which can give more and better facilities from the company.

Types of vehicle insurance

1- Third Party Insurance: Whether new or old, third-party insurance (TP) insurance is required. The vehicle owner is insuring, then the first party and the insuring company is the second party. At the same time, the third party is the one who suffers losses due to the insurer. If a person or someone’s property is damaged while driving, then it is compensated by third party insurance. Also, on the death of a person in the accident, third party insurance gets compensation. However, in such an accident, the damage caused to the vehicle or driver or other people in the car is not compensated by third party insurance. Keep in mind, the insurance claim is rejected if a minor or a person is driving under intoxication.

2- Personal Accident Insurance: If the driver is injured or dies in an accident while driving, the person gets compensation from personal accident insurance. It can also include all the passengers in the vehicle. In India, it is necessary for the owner / driver of a car with motor insurance and the person sitting together to take a personal accident insurance of minimum 15 lakhs. On the other hand, if someone is driving a minor and gets an accident, then insurance benefits are not available.

3- Own Damage Insurance: This (Own Damage) insurance is to compensate for the damage done to the vehicle. If there is a fire or breakage in the vehicle due to any reason or there is loss in any natural disaster like lightning, earthquake, land slide, rain, flood etc. Apart from this, if the vehicle is damaged in a riot, strike, terrorist attack or due to any other reason, the loss is compensated by On Damage (OD) Insurance. This is done by the insurance company.

4- Add-on cover insurance: There are many things in the car that are not covered in third party, personal accident or on damage insurance. For this, the owner of the vehicle can take add-on cover insurance. They do not necessarily have to be taken. These are optional. There is a separate premium for these. Like other insurance, they also have to be renewed every year. Some of the add-on covers are as follows:

Accessories Cover

If the vehicle has separate accessories like seat cover, music system, TV screen, head light, taillight etc. and if it gets stolen or damaged then it is compensated through the accessories cover.

Engine Protection: Do not overfill the engine of the vehicle due to flood or other reasons.

Roadside Assistance: This cover provides the facility of transporting the vehicle to the service centre and free of essential oil in case of damage to the vehicle or tire puncture on the way. If the vehicle is locked, the duplicate key is also sent by the executive of the insurance company from our home to us.

Zero Depreciation: The price of a vehicle decreases with time. If an accident causes damage to the vehicle and its parts are replaced, new parts are replaced or painted. Then the owner of the vehicle may have to pay up to 50% of the cost of new parts or paint when OD insurance is done. If there is zero depreciation add on cover, then nothing will have to be paid even if new parts are installed. Many companies offer this add on cover only on vehicles up to 5 years old.

Return to invoice: In this add-on cover, the entire cost of the vehicle is found when the vehicle is completely destroyed. The ex-showroom price of a car is Rs 5 lakh and after paying all taxes, the on-road costs Rs 6 lakh. Had bought that car three years ago, whose value is considered to be Rs 3 lakh today. If the same car is completely destroyed in a riot or natural disaster and does not even survive to be corrected or gets swept away in the water, then today the cost of the car will be 3 lakh rupees, ie on OD insurance. If the car owner has taken the return to invoice add on cover, then the full price of the car will be Rs 6 lakh.

How to Calculate Car Insurance Premium?

In India, car insurance premiums are calculated based on various factors that assess the risk associated with insuring your vehicle. While the exact formula for premium calculation may vary among insurance companies, the primary factors that influence car insurance premium calculation in India typically include:

  • Insured Declared Value (IDV):The IDV is the maximum amount the insurance company will pay in case of a total loss (e.g., due to theft or a severe accident) of your vehicle. It is calculated based on the current market value of your car. The higher the IDV, the higher your premium will be.
  • Type of Coverage:Car insurance in India offers two main types of coverage:
  • Third-Party Liability:This covers the financial liability towards third parties in case you cause injury or property damage while driving. Premiums for this type are regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and are based on the engine capacity of your vehicle.
  • Comprehensive: This includes third-party liability coverage and coverage for damage to your vehicle. Premiums for comprehensive coverage are influenced by a wider range of factors.
  • Cubic Capacity (CC) of the Vehicle:The engine’s cubic capacity, which is measured in cubic centimetres (CC), is a significant factor in premium calculation. Cars with larger engine capacities often have higher premiums due to their potentially higher speed and power.
  • Age of the Vehicle:Older vehicles typically have lower premiums because their market value is lower compared to newer cars.
  • Geographical Location:The location where you live and primarily use your car affects the premium. Areas with higher traffic density, accident rates, or theft rates may have higher premiums.
  • No Claim Bonus (NCB):If you have a history of not making claims, you can earn an NCB discount. This discount accumulates each claim-free year and can substantially reduce your premium.
  • Add-On Covers:Additional coverage options or add-ons, such as zero depreciation, engine protection, personal accident cover, and roadside assistance, can increase the premium. The selection of these add-ons also affects the premium.
  • Deductible:The deductible (also known as the “excess”) is the amount you agree to pay out of pocket before the insurance coverage kicks in. Choosing a higher deductible can lower your premium but increases your financial responsibility in case of a claim.

To calculate your car insurance premium in India, you can use online premium calculators provided by insurance companies on their websites. These calculators take into account the factors mentioned above and provide you with an estimated premium based on the information you input.

It’s important to compare quotes from multiple insurers to find the best coverage at a competitive price. Additionally, consider consulting with an insurance agent or broker who can provide personalized advice based on your specific circumstances and needs.

Premium Comparison for MARUTI WAGON R [DL1 | 2023 | Petrol | NCB 0%]

Company Name IDV Yearly Premium
Oriental Insurance 500000 15838
Kotak General Insurance 500000 16816
United India Insurance 500000 18336
Digit Insurance 500000 23208
National Insurance 476520 21395
Chola MS General Insurance 454860 17843
HDFC Ergo 428810 19033

Quotes taken from: on 15.09.2023.

Some rules have changed

Not necessarily Long Comprehensive Insurance: When TP Insurance and OD Insurance are taken together, it is called Comprehensive Insurance. Earlier, any customer was required to take 3 years of TP insurance while purchasing a four-wheeler and 5 years for a two-wheeler. It used to be quite expensive. Also, the customer had to buy OD insurance from the same insurance company from which TP Insurance was purchased. These rules have changed since 1 August 2020. Now, when purchasing a new car, the customer can take TP and OD insurance for 1 year only and after that it can be renewed by any company every year.

PUC required for insurance renewal: If you are going to get your insurance renewal, then a valid application control certificate (PUC) has to be kept with you. According to an IRDA order, if the PUC is not there, the insurance company can refuse to renew the insurance. Not only this, but accident cover can also be rejected if there is no PUC.

Taking car insurance in India is an essential step to protect yourself, your vehicle, and others on the road. Here are 20 tips to help you navigate the process of getting car insurance in India:

  1. Understand the Types of Coverage:Familiarize yourself with the various types of car insurance coverage available in India, including Third-party Liability and Comprehensive insurance.
  2. Evaluate Your Needs:Assess your specific insurance needs based on factors like your car’s age, value, and your budget.
  3. Compare Insurance Providers:Research and compare insurance companies, their reputation, customer service, and claim settlement record.
  4. Check for Discounts:Inquire about available discounts for factors like a good driving record, safety features in your car, and anti-theft devices.
  5. Online Research:Use online comparison tools and websites to compare policies and premiums.
  6. Check the IDV:Understand the Insured Declared Value (IDV) of your car, which is the maximum amount the insurer will pay in case of theft or a total loss.
  7. No Claim Bonus (NCB):Inquire about the No Claim Bonus, which offers a discount on premiums for every claim-free year.
  8. Add-On Coverage:Consider add-on covers like Zero Depreciation, Engine Protection, and Roadside Assistance for enhanced coverage.
  9. Policy Exclusions:Thoroughly read the policy document to understand what is not covered, such as consequential damages or mechanical breakdowns.
  10. Research the Claim Process:Know the steps involved in filing a claim and the documents required.
  11. Check Network Garages:Ensure that the insurance company has a network of garages in your area for cashless claim settlements.
  12. Claim Settlement Ratio: Review the insurance company’s claim settlement ratio to gauge its reliability.
  13. Policy Renewal:Stay on top of your policy renewal dates to avoid a lapse in coverage.
  14. Update Information:Inform your insurance provider about any changes in your personal information, address, or modifications to your vehicle.
  15. Maintain a Good Driving Record:Safe driving can lead to lower premiums and a higher NCB.
  16. Install Safety Features:Install safety devices in your car, such as anti-theft alarms, to reduce the risk of theft and potentially lower premiums.
  17. Document Everything:Keep records of all communication with the insurance company, including emails, phone calls, and documents submitted.
  18. Read Reviews:Read customer reviews and testimonials to gauge the insurance company’s customer service quality.
  19. Ask for Recommendations:Seek recommendations from friends, family, or acquaintances who have experience with car insurance in India.
  20. Understand the Policy’s Terms and Conditions:Carefully review the terms and conditions of your policy to avoid any surprises during a claim.

Remember that car insurance is not just a legal requirement but also provides financial protection in case of accidents, theft, or damage to your vehicle. Taking the time to choose the right policy and insurance provider can save you money and ensure peace of mind on the road.

How to claim Car Insurance?

Claiming car insurance in India involves a specific process that you should follow in the event of an accident, theft, or damage to your vehicle. Here are the general steps to file a car insurance claim in India:

  1. Contact the Police (If Applicable):In case of an accident, especially one involving third parties, contact the police immediately and file a First Information Report (FIR). This is essential for insurance claims.
  2. Inform Your Insurance Company:Contact your insurance company as soon as possible after the incident. You can typically find their contact information on your insurance policy documents or their website. Provide them with all the necessary details about the incident, including the date, time, location, and a description of what happened.
  3. Document the Incident:Take photographs of the accident scene, any damage to your vehicle, and the other party’s vehicle, if applicable. This visual evidence can be crucial for your claim.
  4. Fill Out the Claim Form:Your insurance company will provide you with a claim form to fill out. Complete this form accurately and submit it along with any other required documents.
  5. Provide Necessary Documents:Your insurer may ask for various documents to process your claim. These documents may include:
  • Copy of your insurance policy
  • Copy of your driving license
  • FIR (if applicable)
  • Vehicle registration certificate (RC)
  • Estimate for repairs from an authorized garage
  • Bills and receipts for repairs
  • Police report (if applicable)
  • Any other documents requested by the insurer
  1. Claim Survey:After you file a claim, an insurance surveyor may visit the accident site or the garage where your car is being repaired to assess the damage and verify the claim. Cooperate with the surveyor and provide any information or documentation they request.
  2. Cashless or Reimbursement Claim:If you are using a network garage, you may have the option of a cashless claim settlement, where the insurance company directly pays the garage for the repairs. If you choose a non-network garage, you’ll need to pay for the repairs initially and then claim reimbursement from your insurer.
  3. Follow-Up:Stay in touch with your insurance company for updates on your claim’s progress. Keep records of all communication, including names and contact details of the people you speak with.
  4. Settlement:Once the claim is approved and all necessary documentation is verified, your insurer will settle the claim. The settlement amount will depend on factors such as your policy coverage, the extent of damage, and your deductible (if applicable).
  5. Claim Closure:After the claim is settled, your insurance company will close the claim, and you can proceed with the necessary repairs to your vehicle.

Remember that it’s essential to report any incident to your insurance company promptly and provide accurate information and documentation. Failure to do so may result in claim delays or denials. Additionally, be aware of your policy’s terms and conditions, including deductibles and coverage limits, to understand what expenses may or may not be covered by your car insurance in India.

Enquire Now

    Enquire Now